Fact based stock research
Garrett Motion (NasdaqGS:GTX)

US3665051054

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Garrett Motion stock research in summary

garrettmotion.com

ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), Garrett Motion (Auto Parts & Equipment, Switzerland) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Garrett Motion are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives), show above-average growth (Growth Rank of 61) but are riskily financed (Safety Rank of 10), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on Garrett Motion's financial characteristics. As the company Garrett Motion's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 67) and above-average growth (Obermatt Growth Rank of 61), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 10) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	67
Growth Rank	61
Safety Rank	10
Combined Rank	34

Country	Switzerland
Industry	Auto Parts & Equipment
Index	NASDAQ
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Garrett Motion

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	86	55	67
GROWTH
GROWTH	n/a	61	25	61
SAFETY
SAFETY	n/a	52	16	10
SENTIMENT
SENTIMENT	n/a	16	63	^new
360° VIEW
360° VIEW	n/a	65	32	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Garrett Motion is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	86	55	67
GROWTH
GROWTH	n/a	61	25	61
SAFETY
SAFETY	n/a	52	16	10
COMBINED
COMBINED	n/a	83	6	34

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Garrett Motion the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), Garrett Motion shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Garrett Motion. Price-to-Profit (also referred to as price-earnings, P/E) is 64 which means that the stock price compared with what market professionals expect for future profits is lower than for 64% of comparable companies, indicating a good value concerning Garrett Motion's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 100, which means that the stock price is lower as regards to invested capital than for 100% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 63% of alternatives (only 37% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 63% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on Garrett Motion's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	n/a	95	47	37
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	n/a	95	75	64
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	n/a	97	100	100
DIVIDEND YIELD
DIVIDEND YIELD	n/a	1	1	37
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	n/a	86	55	67

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Garrett Motion; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Garrett Motion shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Garrett Motion. Profit Growth has a rank of 100, which means that currently professionals expect the company to grow its profits more than 100% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has a below the median rank of 39, which means that, currently, professionals expect the company to grow less than 61% of its competitors, and Capital Growth also has a lower rank of 6. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Garrett Motion. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	n/a	30	19	39
PROFIT GROWTH
PROFIT GROWTH	n/a	39	39	100
CAPITAL GROWTH
CAPITAL GROWTH	n/a	86	58	6
STOCK RETURNS
STOCK RETURNS	n/a	62	51	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	n/a	61	25	61

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Garrett Motion.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 10 (better than 10% compared with alternatives), the company Garrett Motion has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Garrett Motion is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Garrett Motion. Liquidity is at 41, meaning that the company generates less profit to service its debt than 59% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 1, meaning the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. Finally, Refinancing is at a rank of 16 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 84% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 10 (worse than 90% compared with alternatives), Garrett Motion has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Garrett Motion because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	n/a	7	1	1
REFINANCING
REFINANCING	n/a	100	20	16
LIQUIDITY
LIQUIDITY	n/a	43	43	41
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	n/a	52	16	10

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Garrett Motion and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	71	73	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	19	99	^new
MARKET PULSE
MARKET PULSE	n/a	1	4	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	16	63	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Garrett Motion.
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