Howmet Aerospace Inc.
Howmet Aerospace Inc. Fundamental Analysis
Howmet Aerospace Inc. (HWM) shows moderate financial fundamentals with a PE ratio of 63.44, profit margin of 18.27%, and ROE of 29.67%. The company generates $8.3B in annual revenue with strong year-over-year growth of 11.90%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 74.4/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze HWM's fundamental strength across five key dimensions:
Efficiency Score
ExcellentHWM demonstrates superior asset utilization.
Valuation Score
WeakHWM trades at a premium to fair value.
Growth Score
ExcellentHWM delivers strong and consistent growth momentum.
Financial Health Score
ExcellentHWM maintains a strong and stable balance sheet.
Profitability Score
ExcellentHWM achieves industry-leading margins.
Key Financial Metrics
Is HWM Expensive or Cheap?
P/E Ratio
HWM trades at 63.44 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HWM's PEG of 14.23 indicates potential overvaluation.
Price to Book
The market values Howmet Aerospace Inc. at 17.87 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 39.21 times EBITDA. This signals the market has high growth expectations.
How Well Does HWM Make Money?
Net Profit Margin
For every $100 in sales, Howmet Aerospace Inc. keeps $18.27 as profit after all expenses.
Operating Margin
Core operations generate 25.81 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $29.67 in profit for every $100 of shareholder equity.
ROA
Howmet Aerospace Inc. generates $13.49 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Howmet Aerospace Inc. produces operating cash flow of $1.89B, showing steady but balanced cash generation.
Free Cash Flow
Howmet Aerospace Inc. generates strong free cash flow of $1.21B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.01 in free cash annually.
FCF Yield
HWM converts 1.27% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
63.44
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
14.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
17.87
vs 25 benchmark
P/S Ratio
Price to sales ratio
11.61
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.57
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.13
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.30
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How HWM Stacks Against Its Sector Peers
| Metric | HWM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 63.44 | 25.84 | Worse (Expensive) |
| ROE | 29.67% | 1279.00% | Weak |
| Net Margin | 18.27% | -43714.00% (disorted) | Strong |
| Debt/Equity | 0.57 | 0.80 | Strong (Low Leverage) |
| Current Ratio | 2.13 | 10.62 | Strong Liquidity |
| ROA | 13.49% | -1537441.00% (disorted) | Strong |
HWM outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Howmet Aerospace Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
11.45%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
161.65%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
240.39%
Industry Style: Cyclical, Value, Infrastructure
High Growth