Axalta Coating Systems Ltd. (AXTA) stock analysis

P/E below its 5-year median

Axalta Coating Systems's P/E of 23.9 is below its own 5-year median of 24.9.

P/E below the industry

Axalta Coating Systems's P/E of 23.9 is below the Chemicals and Allied Products median of 25.2.

EV/EBITDA below its 5-year median

Axalta Coating Systems's EV/EBITDA of 10.9 is below its 5-year median of 11.6.

P/B above the industry

Axalta Coating Systems's price-to-book of 3.03 is above the Chemicals and Allied Products median of 2.25.

Trading below fair value

The share price of $37.07 is below our fair value estimate of $40.51.

Margin of safety under 20%

The price is 8.5% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 1.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 26.5% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -26.6% over the last twelve months, against a 5-year average of 25.5% a year.

Growing slower than the industry

Revenue grew 0.1% over the last twelve months; the Chemicals and Allied Products median is 6.4%.

Guidance lowered

Axalta Coating Systems lowered its FY 2026 Interest Expense outlook on Oct 29, 2026.

Gross margin slipping

Gross margin was 33.6% over the last twelve months, against 34.6% a year earlier.

Return on equity under 15%

Return on equity was 13.6% over the last twelve months and averaged 17.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 8.8%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Axalta Coating Systems's return on equity of 13.6% is above the Chemicals and Allied Products median of -50.3%.

Earnings grew over 5 years

Net income grew 25.5% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 6.5% over the last twelve months, against a 5-year average of 6.0%.

Net margin above the industry

Axalta Coating Systems's net margin of 6.5% is above the Chemicals and Allied Products median of -31.1%.

High debt

Debt is 114% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 272% five years ago to 114%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 23.3% of total debt.

Interest not well covered

Operating income covers interest expense 4.2 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.53 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.46; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Axalta Coating Systems has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.