Numbers

The Numbers

Aptiv is priced like a cyclical wiring-harness vendor and reports like one too: $20B of revenue, mid-single-digit operating margins, and a stock that has lost more than half its 2021 peak. The 20-year valuation history shows the multiple has already fully de-rated to its post-spin floor (P/E around 8x on FY2024 GAAP earnings, EV/EBITDA roughly 10x), but the FY2025 print broke that simple framing — a Q3 charge collapsed reported net income to $165M and pushed the headline P/E above 100x. The single metric most likely to re-rate or de-rate this stock is EBITDA margin: a snap-back to the FY2024 17.5% level closes most of the gap to a $95-100 consensus target; another year stuck near the FY2025 11% trough validates the market's "structurally lower-margin Tier-1 supplier" view.

Price (24-Apr-26)

$60.10

Market Cap ($M)

$12,815

Quality Score (0-100)

Fair Value ($)

$102.00

Revenue FY2025 ($M)

$20,398

Quality Score blends 5y profitability, leverage, growth, and cash conversion (0-100, higher is better). Fair Value blends sell-side consensus mean (~$97) with an EV/EBITDA reversion to the 10-year median 13x multiple.

A. Quality scorecard — is this a well-run business that will still be around in 10 years?

Altman Z (partial)

1.78

Net Debt / EBITDA (FY2025)

2.8

Current Ratio (FY2025)

1.74

FCF / NI (5-yr avg)

1.10

Aptiv passes the survival test — Altman Z near 1.8 puts it in the grey zone but the business throws off real cash (5-yr FCF/NI above 1) and the current ratio is healthy. The vulnerability is leverage: Net Debt re-grew to $6.2B in FY2025 after a deleveraging window in FY2024, and that is what caps the Quality Score in the mid-40s.

B. Revenue and operating earnings — 20-year view

The pre-2017 spin-off years inflate revenue (the legacy Delphi book included Powertrain). The cleaner story is post-2017: operating margin held a tight 7-12% band until FY2024 marked the local high (10.5%), then FY2025 dropped to 5.8% on a Q3 impairment-style charge. Net-income margin spikes in FY2020 (tax benefit) and FY2023 (Motional-related re-measurement gain) are non-cash, not operating recoveries.

C. Recent direction — last 16 quarters

A textbook auto-cycle pattern: post-COVID restock through 2022-2023, OEM destocking through 2024 (four straight negative quarters), and a return to mid-single-digit growth in 2H 2025. The volume cycle is bottoming, but margin recovery has lagged.

D. Cash generation — are the earnings real?

Cash conversion is the bull-case anchor. FY2025 generated $1.53B of free cash flow against just $165M of GAAP earnings — operating cash flow held above $2.1B even with the headline-margin air pocket. The 5-year average FCF/NI ratio is comfortably above 1.0. The earnings are real; the GAAP profile is just noisy.

E. Capital allocation — what does management do with the cash?

The dividend was effectively suspended in 2020 and never resumed. Cash returns since have come through buybacks (not separately disclosed in the cash-flow file but visible in the share count: shares outstanding fell from 282.9M at end-FY2023 to 213.1M today, a 25% reduction in two years — the dominant capital-return mechanism).

F. Balance sheet — leverage cycles

The FY2024 dip to net-cash is misleading (timing of debt issuance and the Q4 Motional spin proceeds). Through-cycle leverage is best read as 2-3x EBITDA, and FY2025's 2.8x sits at the upper end of management's working range. The Wind River acquisition in FY2022 was the cycle's gear-up; FY2024 was a temporary reset; FY2025 is back to baseline.

G. Valuation — now vs its own 20-year history

This is the chart that matters most. Aptiv's P/E has compressed to a post-spin low; EV/EBITDA tells the same story.

P/E (TTM, GAAP)

80.1

EV/EBITDA (FY2025)

10.3

EV/EBITDA 15y median

13.0

Blended Fair Value ($)

$102.00

Two reads of the same data. The TTM P/E is meaningless this year (denominator is impaired). On a normalized FY2024 EPS basis, the P/E is 8.7x, well under one standard deviation below the 15-year mean of 26x. EV/EBITDA at 10.3x sits below the 15-year median of about 13x. The market is pricing FY2025 margins as the new normal, not the FY2024 print.

H. 14-year price chart — the de-rating context

Peak-to-trough drawdown from late-2021 is roughly 64%. The stock is back at 2014 levels in nominal terms, well below the post-COVID rally and a long way from the $165 EV-supplier euphoria peak.

I. Peer comparison — auto-tech / Tier-1 supplier set

No Results

Aptiv carries the heaviest leverage in the peer set on a TTM basis (2.8x) while sitting at the bottom of the EBITDA-margin distribution (10.9% vs BorgWarner 14.6%, Visteon 11.8%). The trade-off is scale and software/electrification mix that, in theory, justifies a multiple closer to MBLY than to MGA. The market currently disagrees and trades it closer to MGA on EV/EBITDA.

J. Fair value & scenarios

No Results

The valuation gap is real but conditional. The base case requires only a partial margin recovery — not heroics. The single binary risk is whether FY2025's Q3 charge represented one-off restructuring or the start of structurally lower auto-electronics economics. Sell-side consensus is on the recovery side; the price action is not.

What the numbers say

The numbers confirm that Aptiv is a real cash-generating business — $1.5B-plus of free cash flow even in the worst margin year of the post-spin era — and that the balance sheet, while levered at 2.8x, is not stressed. They contradict the framing of Aptiv as a software-defined-vehicle compounder: the post-2017 operating-margin range is 6-12%, identical to old-line Tier-1 suppliers, and revenue CAGR over a decade is barely 3%. The thing to watch is the Q1-Q2 FY2026 EBITDA margin trajectory: a return to a mid-teens print supports the base case toward $100; a second consecutive year stuck in the low-double-digits validates the bear case and likely keeps the multiple compressed.