On the four Ms, Aptiv earns 68 for management and 57 for moat. The management score rests on a return on invested capital of 1.3% and a gross margin of 19.1% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.88x equity. A moderate moat alongside strong management is a combination worth understanding before the price matters at all.
The valuation runs on assumptions chosen to understate rather than flatter. Growth is modelled at 9.3% a year, the rate measured from the filings. The exit multiple assumed is 18.6x. That produces an intrinsic value of $11.79, a 10-CAP price of $44.29 and a payback time price of $54.01, with the value zone set at the highest of the three, $54.01. Today's price of $43.97 sits inside that zone.
The price sits inside the value zone, but the business scores 57 for moat and 68 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $43.97 |
| Market cap | $9.3B |
| P/E ratio | 41.9x |
| Return on invested capital | 1.3% |
| Gross margin | 19.1% |
| Debt to equity | 0.88x |
| Free cash flow yield | 9.1% |
| Growth rate used | 9.3% |
| Growth rate measured | 9.0% |
| Exit multiple assumed | 18.6x |
| Company | Moat | Buy price |
| Allison Transmission Holding (ALSN) | 67 | $106.60 |
| Autoliv Inc (ALV) | 79 | $134.26 |
| Borgwarner Inc (BWA) | 48 | $73.74 |
| Lear Corp (LEA) | 50 | $216.77 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Aptiv rather than accepting ours.