AXL gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 42 industry peers in the Automobile Components industry. There are concerns on the financial health of AXL while its profitability can be described as average. AXL has a valuation in line with the averages, but on the other hand it scores bad on growth.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

AXL had positive earnings in the past year.
AXL had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: AXL reported negative net income in multiple years.
AXL had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With a Return On Assets value of 0.75%, AXL perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
The Return On Equity of AXL (5.58%) is better than 71.43% of its industry peers.
AXL has a Return On Invested Capital (4.97%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for AXL is below the industry average of 9.10%.
The last Return On Invested Capital (4.97%) for AXL is above the 3 year average (4.62%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	0.75%
ROE	5.58%
ROIC	4.97%

ROA(3y)0.39%

ROA(5y)-1.64%

ROE(3y)3.42%

ROE(5y)-28%

ROIC(3y)4.62%

ROIC(5y)4.36%

1.3 Margins

AXL has a Profit Margin of 0.69%. This is comparable to the rest of the industry: AXL outperforms 52.38% of its industry peers.
AXL's Profit Margin has improved in the last couple of years.
AXL has a Operating Margin (4.39%) which is in line with its industry peers.
AXL's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 12.31%, AXL is doing worse than 73.81% of the companies in the same industry.
In the last couple of years the Gross Margin of AXL has declined.

		Industry Rank	Sector Rank
OM	4.39%
PM (TTM)	0.69%
GM	12.31%

OM growth 3Y-7.92%

OM growth 5Y-8.14%

PM growth 3Y70.91%

PM growth 5YN/A

GM growth 3Y-4.77%

GM growth 5Y-2.62%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AXL is destroying value.
The number of shares outstanding for AXL has been increased compared to 1 year ago.
Compared to 5 years ago, AXL has more shares outstanding
Compared to 1 year ago, AXL has about the same debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 1.55, we must say that AXL is in the distress zone and has some risk of bankruptcy.
AXL has a worse Altman-Z score (1.55) than 64.29% of its industry peers.
AXL has a debt to FCF ratio of 16.22. This is a negative value and a sign of low solvency as AXL would need 16.22 years to pay back of all of its debts.
The Debt to FCF ratio of AXL (16.22) is comparable to the rest of the industry.
A Debt/Equity ratio of 3.61 is on the high side and indicates that AXL has dependencies on debt financing.
The Debt to Equity ratio of AXL (3.61) is worse than 85.71% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	3.61
Debt/FCF	16.22
Altman-Z	1.55

ROIC/WACC0.62

WACC8%

2.3 Liquidity

A Current Ratio of 1.77 indicates that AXL should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.77, AXL is in line with its industry, outperforming 47.62% of the companies in the same industry.
A Quick Ratio of 1.43 indicates that AXL should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.43, AXL is in the better half of the industry, outperforming 71.43% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.77
Quick Ratio	1.43

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for AXL have decreased strongly by -16.67% in the last year.
The earnings per share for AXL have been decreasing by -20.64% on average. This is quite bad
Looking at the last year, AXL shows a decrease in Revenue. The Revenue has decreased by -6.02% in the last year.
Measured over the past years, AXL shows a decrease in Revenue. The Revenue has been decreasing by -1.28% on average per year.

EPS 1Y (TTM)-16.67%

EPS 3Y-17.85%

EPS 5Y-20.64%

EPS Q2Q%-20%

Revenue 1Y (TTM)-6.02%

Revenue growth 3Y5.9%

Revenue growth 5Y-1.28%

Sales Q2Q%0.03%

3.2 Future

Based on estimates for the next years, AXL will show a very strong growth in Earnings Per Share. The EPS will grow by 30.48% on average per year.
AXL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.46% yearly.

EPS Next Y-15.93%

EPS Next 2Y14.08%

EPS Next 3Y20.6%

EPS Next 5Y30.48%

Revenue Next Year-4.53%

Revenue Next 2Y-1.97%

Revenue Next 3Y-0.43%

Revenue Next 5Y1.46%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 20.70 indicates a rather expensive valuation of AXL.
AXL's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of AXL to the average of the S&P500 Index (27.21), we can say AXL is valued slightly cheaper.
With a Price/Forward Earnings ratio of 12.48, AXL is valued correctly.
AXL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. AXL is cheaper than 64.29% of the companies in the same industry.
AXL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.

		Industry Rank	Sector Rank
PE	20.7
Fwd PE	12.48

4.2 Price Multiples

92.86% of the companies in the same industry are more expensive than AXL, based on the Enterprise Value to EBITDA ratio.
95.24% of the companies in the same industry are more expensive than AXL, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	6.09
EV/EBITDA	4.02

4.3 Compensation for Growth

AXL's earnings are expected to grow with 20.60% in the coming years. This may justify a more expensive valuation.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y14.08%

EPS Next 3Y20.6%

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5. Dividend

5.1 Amount

No dividends for AXL!.

		Industry Rank	Sector Rank
Dividend Yield	0%

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AMERICAN AXLE & MFG HOLDINGS / AXL FAQ

Can you provide the ChartMill fundamental rating for AMERICAN AXLE & MFG HOLDINGS?

ChartMill assigns a fundamental rating of 3 / 10 to AXL.

What is the valuation status for AXL stock?

ChartMill assigns a valuation rating of 5 / 10 to AMERICAN AXLE & MFG HOLDINGS (AXL). This can be considered as Fairly Valued.

What is the profitability of AXL stock?

AMERICAN AXLE & MFG HOLDINGS (AXL) has a profitability rating of 4 / 10.

What is the valuation of AMERICAN AXLE & MFG HOLDINGS based on its PE and PB ratios?

The Price/Earnings (PE) ratio for AMERICAN AXLE & MFG HOLDINGS (AXL) is 20.7 and the Price/Book (PB) ratio is 1.37.

How financially healthy is AMERICAN AXLE & MFG HOLDINGS?

The financial health rating of AMERICAN AXLE & MFG HOLDINGS (AXL) is 2 / 10.