Autoliv Inc (ALV) stock analysis

P/E below its 5-year median

Autoliv's P/E of 14.5 is below its own 5-year median of 15.5.

P/E below the industry

Autoliv's P/E of 14.5 is below the Motor Vehicles and Motor Vehicle Equipment median of 18.7.

EV/EBITDA below its 5-year median

Autoliv's EV/EBITDA of 7.3 is below its 5-year median of 8.0.

P/B above the industry

Autoliv's price-to-book of 3.55 is above the Motor Vehicles and Motor Vehicle Equipment median of 1.56.

Trading below fair value

The share price of $121.37 is below our fair value estimate of $129.15.

Margin of safety under 20%

The price is 6.0% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 6.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 25.3% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -17.3% over the last twelve months, against a 5-year average of 31.5% a year.

Growing slower than the industry

Revenue grew 4.3% over the last twelve months; the Motor Vehicles and Motor Vehicle Equipment median is 5.5%.

Guidance issued

The latest outlook (Full year 2026 Organic sales growth, Oct 23, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 19.0% over the last twelve months, against 19.3% a year earlier.

Return on equity over 15%

Return on equity was 24.8% over the last twelve months and averaged 21.9% over five years.

Return on capital over 10%

Return on invested capital was 16.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Autoliv's return on equity of 24.8% is above the Motor Vehicles and Motor Vehicle Equipment median of 3.5%.

Earnings grew over 5 years

Net income grew 31.5% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 5.6% over the last twelve months, against a 5-year average of 5.5%.

Net margin above the industry

Autoliv's net margin of 5.6% is above the Motor Vehicles and Motor Vehicle Equipment median of 1.9%.

High debt

Debt is 78.6% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 100% five years ago to 78.6%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 59.0% of total debt.

Interest well covered

Operating income covers interest expense 9.9 times.

Short-term assets cover short-term debts

Current assets are 1.02 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.97; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Autoliv paid dividends worth 2.2% of the share price over the last twelve months.

Yield below Treasuries

The 2.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Autoliv yields 2.2%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 41.3% of net income.

Covered by free cash flow

Dividends take 35.3% of free cash flow.