Axalta Coating Systems Ltd.
Axalta Coating Systems Ltd. Fundamental Analysis
Axalta Coating Systems Ltd. (AXTA) shows weak financial fundamentals with a PE ratio of 19.24, profit margin of 7.39%, and ROE of 16.86%. The company generates $5.1B in annual revenue with weak year-over-year growth of 1.77%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 42.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze AXTA's fundamental strength across five key dimensions:
Efficiency Score
WeakAXTA struggles to generate sufficient returns from assets.
Valuation Score
ExcellentAXTA trades at attractive valuation levels.
Growth Score
ModerateAXTA shows steady but slowing expansion.
Financial Health Score
ModerateAXTA shows balanced financial health with some risks.
Profitability Score
ModerateAXTA maintains healthy but balanced margins.
Key Financial Metrics
Is AXTA Expensive or Cheap?
P/E Ratio
AXTA trades at 19.24 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, AXTA's PEG of -1.15 indicates potential undervaluation.
Price to Book
The market values Axalta Coating Systems Ltd. at 3.10 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 4.45 times EBITDA. This is generally considered low.
How Well Does AXTA Make Money?
Net Profit Margin
For every $100 in sales, Axalta Coating Systems Ltd. keeps $7.39 as profit after all expenses.
Operating Margin
Core operations generate 14.36 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.86 in profit for every $100 of shareholder equity.
ROA
Axalta Coating Systems Ltd. generates $4.97 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Axalta Coating Systems Ltd. produces operating cash flow of $648.92M, showing steady but balanced cash generation.
Free Cash Flow
Axalta Coating Systems Ltd. produces free cash flow of $452.94M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $2.12 in free cash annually.
FCF Yield
AXTA converts 6.25% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.24
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.15
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.10
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.45
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How AXTA Stacks Against Its Sector Peers
| Metric | AXTA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.24 | 27.01 | Better (Cheaper) |
| ROE | 16.86% | 949.00% | Weak |
| Net Margin | 7.39% | -16159.00% (disorted) | Weak |
| Debt/Equity | 1.45 | 0.48 | Weak (High Leverage) |
| Current Ratio | 2.06 | 4.42 | Strong Liquidity |
| ROA | 4.97% | -6411.00% (disorted) | Weak |
AXTA outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Axalta Coating Systems Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
25.55%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
67.48%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
7.20%
Industry Style: Cyclical, Commodity, Value
Growing