Aptiv PLC (APTV)

Conclusion

Aptiv PLC supplies automotive safety and user-experience hardware and software, compute platforms, and electrical distribution systems. At a price of 39.91 USD on 2026-11-09, the market capitalisation is 8.08 billion USD and the enterprise value is 13.10 billion USD.

The verdict is undervalued. The P/E of 10.5 compares with a ten-year median of 20.9, and EV/EBITDA of 5.5 with a ten-year median of 13.7. The fair value band runs from 64.40 to 96.60 USD with a midpoint of 80.50 USD, a margin of safety of 101.7% at the current price. The DCF gives 37.21 USD per share, while the fair value from historical multiples is 123.78 USD. The reverse DCF implies growth of 8.3% a year, against revenue growth of 9.3% a year over five years and free cash flow per share growth of 17.7% a year over the same period.

What holds the case up is earnings quality: a Piotroski score of 7 out of 9, a Beneish M-score of -2.70, and free cash flow conversion of 85.4% over five years. The share count has fallen 4.0% a year over five years. What weakens it is returns: ROIC of 7.1% sits below WACC of 8.1%. Net debt to EBITDA is 2.10, and EPS has fallen 35.4% a year over five years.

Financial health

Financial strength is yellow. The current ratio of 1.97 is assessed good, while net debt to EBITDA of 2.10 and interest coverage of 5.08 are assessed neutral. At 2026-09-30 the quick ratio is 1.14 and debt to equity is 0.65. The Altman Z-score is 2.35, in the grey zone; the model was designed for manufacturers, and Aptiv is one. Insolvency risk: low, about 0.9% by the estimate of the Ohlson model over one to two years, based on statements dated 2025-12-31. Debt is modest relative to equity, but the net debt multiple leaves little room if earnings fall.

Earnings quality

Earnings quality is green. Free cash flow conversion is 67.1% on a trailing basis and 85.4% over five years, and the accrual ratio of -8.6% shows cash earnings running ahead of reported profit. Stock-based compensation is 0.3% of revenue, and free cash flow after it is 468 million USD. The Piotroski score of 7 out of 9 and the Beneish M-score of -2.70, which the model reads as unlikely to signal manipulation, both support the reported figures. Aptiv beat estimates in 7 of the last 8 quarters, with an average surprise of 10.1%. Estimate revisions are negative: the current year is down 1.8% over 90 days, with seven downgrades and no upgrades in the last 30 days.

Profitability

Profitability is yellow. Gross margin of 20.4% is above its ten-year median of 17.3%, while operating margin of 8.9% is slightly below its median of 9.3%, and net margin of 4.6% is below its median of 7.5%. Operating margin stability is 17.6%. ROIC of 7.1% is below WACC of 8.1%, giving a ROIC minus WACC of -1.0%, so the business does not yet earn its cost of capital. The 2025 DuPont split shows a net margin of 0.81%, asset turnover of 0.87 and an equity multiplier of 2.54. Return on equity of 8.8% on a trailing basis therefore relies partly on leverage.

Growth

Growth is yellow. Revenue compound growth is 5.3% over three years, 9.3% over five years and 3.0% over ten years, and revenue grew in 6 of the last 10 years. EPS compound growth is -30.1% over three years, -35.4% over five years and -17.4% over ten years. Free cash flow per share compound growth is 64.9% over three years, 17.7% over five years and 7.1% over ten years. The next-year EPS estimate implies growth of 8.8%, but estimates have been cut over the last 90 days, so that figure is less secure than it looks.

Valuation

Valuation is green. Against their ten-year medians, the current P/E of 10.5 carries a premium of -49.8%, EV/EBITDA of 5.5 a premium of -60.1%, price to free cash flow of 15.7 a premium of -41.1%, and price to book of 0.92 a premium of -80.3%. The DCF gives 37.21 USD per share at a discount rate of 11.4%, with the terminal value making up 47.3% of it. The fair value band of 64.40 to 96.60 USD rests on fixed assumptions, including a 5% equity risk premium and capped growth. It is an order of magnitude, not a price target. The reverse DCF implies 8.3% growth, which is below the 17.7% free cash flow per share growth delivered over five years. The dividend yield is 0.07%, with a payout of 1.2% of free cash flow and no forward yield.

Risks

The weakest number is returns: ROIC of 7.1% against WACC of 8.1% means the company currently earns less than its cost of capital, and a further fall in margins would widen that gap. Net debt to EBITDA of 2.10 would become a harder constraint if free cash flow conversion dropped from its five-year level of 85.4%. The earnings decline is the third concern, with EPS down 35.4% a year over five years and next-year estimates falling 5.9% over 90 days. The share price has also fallen from 172.89 USD in October 2021 to 39.91 USD. Forward dividend yield is not paid. This analysis has no debt maturity schedule and no revenue by segment, so refinancing risk and the mix of profit across businesses cannot be assessed.