Core Insights - The article emphasizes the importance of a proven ranking system that focuses on earnings estimates and revisions to identify winning stocks [1] - Value investing is highlighted as a popular and successful strategy across various market conditions, relying on traditional analysis of key valuation metrics [2] - The Style Scores system is introduced, particularly the "Value" category, which helps investors identify stocks with high value grades and strong Zacks Ranks [3] Company Analysis: GARRETT MOTION (GTX) - GARRETT MOTION currently holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong potential for value investors [4] - The stock has a Forward P/E ratio of 9.45, significantly lower than the industry average of 19.53, suggesting it may be undervalued [4] - Over the past year, GTX's Forward P/E has fluctuated between 5.83 and 9.56, with a median of 7.57, further indicating its valuation dynamics [4] - The P/S ratio for GTX is 0.73, which is slightly below the industry average of 0.75, reinforcing the notion of potential undervaluation [5] - Overall, the metrics suggest that GARRETT MOTION is likely undervalued, making it an attractive option for value investors [6]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $902 million, up 6% at constant currency, reflecting strong performance in light vehicle turbo sales for both gasoline and diesel applications [5][9] - Adjusted EBIT was $133 million, with an adjusted EBIT margin of 14.7%, which includes a 20 basis point dilution from tariff recoveries [5][11] - Adjusted free cash flow for the quarter was $107 million, contributing to a year-to-date total of $264 million [16][18] - The company raised its 2025 outlook midpoint, now expecting net sales of $3.55 billion, net income of $280 million, and adjusted EBIT of $510 million [15] Business Line Data and Key Metrics Changes - Gasoline sales grew by 10% in the quarter, driven by demand gains and new product launches [5][10] - Diesel performance was strong in Europe and North America, although there was continued weakness in aftermarket applications, particularly in North America [10][41] - The company secured over $40 million in awards for commercial vehicles and industrial turbochargers, with expectations for sales exceeding $100 million in 2025 from these products [7][17] Market Data and Key Metrics Changes - The company experienced favorable foreign currency impacts, contributing to the overall sales growth [9][10] - There was a noted recovery in diesel sales year-over-year, particularly in Europe and North America, although the overall trend for diesel remains slowly declining [41] Company Strategy and Development Direction - The strategic priorities focus on developing differentiated, high-speed, and highly efficient technologies to meet customer needs and generate robust returns for shareholders [16] - The company is seeing increased interest in turbochargers for hybrids and range-extended electric vehicles, as well as in zero-emission technologies [6][7] - The company aims to achieve $1 billion in revenue from zero-emission technologies by 2030, with significant contributions expected from e-power trains and eco-link compressors [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the automotive industry's improved forecast for the second half of the year, which has influenced the raised outlook for 2025 [6][15] - The company is monitoring the developments in the penetration of zero-emission technologies closely, with positive signs of customer interest and project wins [33][34] - Management acknowledged cyclical effects impacting the aftermarket and commercial vehicle segments but remains optimistic about future recovery [22][24] Other Important Information - The board approved a 33% increase in the quarterly dividend, raising it to $0.08 per share for Q4 2025 [6][14] - The company repurchased $84 million worth of shares during the quarter, targeting a distribution of 75% of adjusted free cash flow to shareholders over time [14][50] Q&A Session Summary Question: Insights on volume mix and geographic performance - Management clarified that the mix impact is primarily due to the growth in gasoline versus commercial vehicles and ongoing weakness in the aftermarket, particularly in the commercial vehicle off-highway segment [20][21] Question: Details on commercial vehicle market stabilization - Management noted some signs of stabilization in the commercial vehicle market, particularly in China, although the overall outlook remains soft [23][24] Question: Progress on zero-emission technologies and revenue targets - Management discussed three key technologies contributing to the $1 billion revenue target, emphasizing the e-power train and eco-link compressors as significant growth areas [29][30][33] Question: Recovery in diesel sales - Management indicated a year-over-year recovery in diesel sales, particularly in Europe and North America, while acknowledging the overall trend of declining diesel demand [41] Question: Future expectations for stationary power revenue - Management highlighted the growth potential in stationary power applications, with current sales expected to exceed $100 million this year [43][48] Question: Capital allocation strategy moving forward - Management reiterated the commitment to returning capital to shareholders, with variability in share buybacks depending on market conditions [50][59]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $902 million, representing a 6% increase at constant currency and a 9% increase on a reported basis compared to the previous year [5][10] - Adjusted EBIT was $133 million with an adjusted EBIT margin of 14.7%, reflecting a 50 basis point improvement year-over-year [10][12] - Adjusted free cash flow for the quarter was $107 million, contributing to a year-to-date total of $264 million [16][18] - The company raised its 2025 outlook midpoint, now projecting net sales of $3.55 billion and adjusted EBIT of $510 million [15] Business Line Data and Key Metrics Changes - Gasoline sales grew by 10% in Q3, driven by demand gains and new product launches [5][11] - Diesel performance was strong in Europe and North America, although overall diesel trends are slowly declining [36][37] - The aftermarket experienced weakness, particularly in the commercial vehicle off-highway segment [20][21] Market Data and Key Metrics Changes - The company noted strong growth in light vehicle turbo sales, outperforming the industry [5][11] - Demand for stationary power generation products is expected to exceed $100 million in 2025, driven by the expansion of data centers [7][17] - The company secured several awards for zero-emission technologies, indicating strong customer interest [8][31] Company Strategy and Development Direction - The strategic focus remains on developing differentiated, high-speed, and highly efficient technologies to meet customer needs [16] - The company is investing in turbo and zero-emission technologies, with a goal of achieving $1 billion in revenue from zero-emission technologies by 2030 [28][30] - The company aims to return 75% of adjusted free cash flow to shareholders through dividends and share repurchases [14][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the automotive industry's improved forecast for the second half of 2025 [6][15] - The company is optimistic about the growth potential in zero-emission technologies and stationary power applications [8][32] - Management acknowledged cyclical effects impacting the aftermarket and commercial vehicle segments but expects recovery over time [21][22] Other Important Information - The board approved a 33% increase in the quarterly dividend, raising it to $0.08 per share for Q4 2025 [6][14] - The company repurchased $84 million of common stock during the quarter [6][14] - Both Fitch and S&P upgraded the company's ratings, reflecting reduced net leverage and decreased private equity ownership [13] Q&A Session Summary Question: Can you elaborate on the volume mix and its geographic impact? - Management clarified that the mix impact is primarily due to the growth in gasoline versus commercial vehicles and ongoing weakness in the aftermarket, particularly in the commercial vehicle off-highway segment [20][21] Question: What is the outlook for commercial vehicle strength? - Management noted that while the outlook is generally soft, there are signs of stabilization in China, particularly in off-highway applications [23][24] Question: Can you discuss the progress on zero-emission technologies? - Management highlighted three key technologies contributing to the $1 billion revenue goal, with significant potential from e-power trains and eco-link compressors [28][30][31] Question: What is the recovery seen in diesel? - Diesel remains a strong business, particularly in light commercial vehicles, despite a general trend of decline in passenger vehicle diesel applications [36][37] Question: What are the expectations for stationary power revenue? - Management indicated that stationary power applications are growing rapidly, with $100 million expected this year, primarily from gensets for data centers [38][42] Question: What should be expected regarding capital allocation and share repurchases? - Management reaffirmed the commitment to return capital to shareholders, targeting 75% of adjusted free cash flow over time, with variability based on market conditions [44][53]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $902 million, up 6% at constant currency, reflecting outperformance in light vehicle turbo sales for both gasoline and diesel applications [7][14] - Adjusted EBIT was $133 million with an adjusted EBIT margin of 14.7%, which includes a 20 basis point dilution from tariff recoveries [8][17] - Adjusted free cash flow for the quarter was $107 million, contributing to a year-to-date total of $264 million [23] Business Line Data and Key Metrics Changes - Gasoline sales grew by 10% in the quarter, driven by demand gains and new product launches [8][16] - Diesel performance was strong in Europe and North America, although there was continued weakness in aftermarket applications, particularly in North America [16][51] - The company secured over $40 million in awards for commercial vehicles and industrial turbochargers, with expectations for sales exceeding $100 million in 2025 from these products [11] Market Data and Key Metrics Changes - The company experienced favorable foreign currency impacts, contributing to a 9% increase in net sales compared to the prior year [15] - There was a noted recovery of $12 million from tariffs within the quarter, which positively impacted financial results [16] Company Strategy and Development Direction - The company aims to leverage its capabilities to develop differentiated, high-speed, and highly efficient technologies to generate robust returns for shareholders [22] - There is a growing interest in developing turbochargers for hybrids and range-extended electric vehicles, with several awards secured for these technologies [10] - The company is focusing on zero-emission products, with significant progress in developing high-speed e Powertrain and oil-free centrifugal compressors [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the automotive industry's improved forecast for the second half of the year, leading to a raised 2025 outlook midpoint [8][21] - The company noted that while diesel is trending down slowly, it remains a strong business, particularly in light commercial vehicle applications [50][51] - Management highlighted the importance of capital allocation, committing to return 75% of adjusted free cash flow to shareholders over time through dividends and share repurchases [20][60] Other Important Information - The Board approved a 33% increase in the quarterly dividend to $0.08 per share for Q4 2025 [9][20] - The company repurchased $84 million worth of shares during the quarter, including shares from its largest shareholder [20] Q&A Session Summary Question: Can you elaborate on the volume mix and its geographic impact? - Management clarified that the mix impact is primarily due to strong growth in gasoline turbos and some weakness in the aftermarket, particularly in commercial vehicle applications [27][28] Question: What is the outlook for commercial vehicle performance? - Management indicated that while the outlook is generally soft, there are signs of stabilization in China, particularly in agricultural and construction equipment [31][32] Question: What is the path to achieving $1 billion in zero-emission technology revenue by 2030? - Management outlined three technologies contributing to this goal, emphasizing the growth potential in e Powertrain and e cooling compressors, with production expected to ramp up starting in 2027 [36][39] Question: Can you discuss the recovery seen in diesel? - Management noted a year-over-year recovery in diesel, particularly in North America, but acknowledged a long-term trend of declining diesel penetration in passenger vehicles [50][51] Question: What are the performance attributes of the e cooling technologies? - Management highlighted the efficiency, low noise, and weight advantages of their e cooling technologies, which leverage high-speed electric motors and airfoil bearing systems [66][68] Question: What should be expected regarding capital allocation moving forward? - Management reiterated their commitment to returning capital to shareholders while remaining flexible based on macroeconomic conditions [71][72]

Core Insights - Garrett Motion reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, and up from $0.24 per share a year ago [1] - The company achieved revenues of $902 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.24% and increasing from $826 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +15.15%, following a previous surprise of +13.51% when actual earnings were $0.42 compared to an expected $0.37 [2] - Over the last four quarters, Garrett Motion has consistently surpassed consensus EPS estimates [2] Stock Performance - Garrett Motion shares have increased approximately 38.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 13.9% [4] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating expectations for continued outperformance in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $879.59 million, and for the current fiscal year, it is $1.39 on revenues of $3.54 billion [8] - The industry outlook is favorable, with the Automotive - Original Equipment sector ranking in the top 32% of Zacks industries, suggesting potential for strong performance [9]

Financial Performance - Net Sales reached $902 million, a 9% increase compared to Q3 2024, or 6% at constant currency[5, 9, 21] - Adjusted EBIT was $133 million with a 14.7% margin, up $16 million from Q3 2024[6, 9, 24] - Adjusted Free Cash Flow was $107 million[7, 16] Business Highlights - Light vehicle gasoline sales grew by 10%, outperforming the industry due to increased market share[9] - The company repurchased $84 million of common stock in Q3, bringing the year-to-date total to $136 million[10] - The Q4 dividend was increased by $0.02 per share to $0.08 per share[10] Outlook and Strategy - The midpoint outlook for 2025 has been raised, with Net Sales projected between $3.5 billion and $3.6 billion[7, 35] - The company is targeting to return 75% of Adjusted Free Cash Flow to shareholders over time[29] - The company expects over $100 million in sales from the industrial portfolio in 2025[41]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - Ventyx Biosciences, Inc. (VTYX) increased by 108% to $8.05 - Brera Holdings PLC (SLMT) rose by 49% to $12.50 - Safe & Green Holdings Corp. (SGBX) gained 39% to $3.18 - American Rebel Holdings, Inc. (AREB) up by 26% to $2.71 - Tango Therapeutics, Inc. (TNGX) increased by 18% to $10.25 - Garrett Motion Inc. (GTX) rose by 14% to $14.30 - ETHZilla Corporation (ETHZ) gained 12% to $17.61 - D-Wave Quantum Inc. (QBTS) increased by 11% to $30.40 - IonQ, Inc. (IONQ) rose by 10% to $61.04 - Megan Holdings Limited (MGN) up by 7% to $2.31 [3] Premarket Losers - Splash Beverage Group, Inc. (SBEV) decreased by 21% to $2.06 - Molina Healthcare, Inc. (MOH) down by 18% to $158.44 - SCHMID Group N.V. (SHMD) fell by 18% to $3.18 - Beyond Meat, Inc. (BYND) decreased by 18% to $2.91 - Agencia Comercial Spirits Ltd (AGCC) down by 16% to $5.07 - Super League Enterprise, Inc. (SLE) fell by 13% to $2.25 - Armata Pharmaceuticals, Inc. (ARMP) decreased by 12% to $5.99 - Applied DNA Sciences, Inc. (BNBX) down by 12% to $4.19 - Ribbon Communications Inc. (RBBN) fell by 12% to $3.49 - Tamboran Resources Corporation (TBN) decreased by 11% to $21.81 [4]

Financial Performance - In Q3 2025, Garrett Motion Inc. reported a net income of $77 million and adjusted EBIT of $133 million, driven by sustainable cost initiatives and favorable foreign exchange conditions [113]. - Net sales for the three months ended September 30, 2025, increased by $76 million or 9% compared to the prior period, including a $26 million favorable impact from foreign currency translation [122]. - Gasoline product sales rose by $45 million or 13%, primarily due to new application launches in Europe, China, India, and North America [123]. - Diesel product sales increased by $21 million or 12%, supported by strong light commercial vehicle performance in Europe and sustained demand for pickup trucks in North America [124]. - For the nine months ended September 30, 2025, net sales increased by $62 million or 2%, including a $28 million favorable impact from foreign currency translation [128]. - Net income for the three months ended September 30, 2025, increased by $25 million to $77 million, driven by a $20 million increase in gross profit [154]. - Adjusted EBIT for the three months ended September 30, 2025, increased by $16 million to $133 million, driven by higher sales volumes and productivity [163]. - Adjusted EBIT increased by $27 million year-over-year, driven by $40 million in productivity gains and $22 million from higher sales volumes in gasoline and commercial vehicles [169]. Expenses and Costs - Cost of goods sold for Q3 2025 was $716 million, an increase of 8.5% compared to the prior period, while gross profit margin improved to 20.6% [133]. - Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2025, increased by $4 million to $57 million, representing 6.3% of sales [139]. - For the nine months ended September 30, 2025, SG&A expenses decreased by $3 million to $175 million, primarily due to a $5 million reduction in personnel costs [140]. - Interest expense for the three months ended September 30, 2025, decreased by $8 million to $29 million, attributed to lower interest expense from the Amendment and Restatement of the Credit Agreement [143]. - The company experienced a $60 million impact from unfavorable product mix on gross profit for the nine months ended September 30, 2025 [137]. Shareholder Returns - The company repurchased $84 million of common stock during the quarter, with $114 million remaining under the share repurchase program as of September 30, 2025 [115]. - The Board of Directors declared a cash dividend of $0.06 per share, totaling $11 million paid on September 16, 2025 [116]. - The company declared a cash dividend of $0.08 per share, payable on December 15, 2025, to shareholders of record as of December 1, 2025 [174]. - The company repurchased $136 million of Common Stock during the nine months ended September 30, 2025, with $114 million remaining under the share repurchase program [176]. Cash Flow and Financing - Cash provided by operating activities rose by $37 million to $314 million for the nine months ended September 30, 2025, primarily due to a $44 million increase in net income [178]. - Cash used for financing activities decreased significantly to $187 million from $439 million in the prior year, reflecting lower debt repayments and stock repurchases [180]. - As of September 30, 2025, cash and cash equivalents increased to $230 million from $125 million at the end of 2024 [172]. - Cash flow used for investing activities decreased by $28 million to $(27) million for the nine months ended September 30, 2025, compared to the prior year [179]. - The company refinanced its $692 million 2021 Dollar Term Facility with a new 2025 Dollar Term Facility, maturing on January 30, 2032 [172]. Strategic Initiatives - Garrett Motion Inc. deepened strategic collaborations with OEMs for zero-emission technologies, laying the foundation for future business growth [114]. - The company expects to continue investing in manufacturing capacity and new technologies, particularly in zero-emission technologies [175]. - The company revised its non-GAAP reporting metric from Adjusted EBITDA to Adjusted EBIT to better reflect core operating performance [157]. Other Financial Metrics - The effective tax rate for the three months ended September 30, 2025, was 24.5%, down from 31.6% in the prior year [148]. - Non-operating income for the nine months ended September 30, 2025, increased by $3 million to $10 million, primarily due to higher foreign exchange transactional gains [147]. - Other expense, net for the nine months ended September 30, 2025, increased by $4 million to $9 million, mainly due to third-party costs related to the Restatement Agreement [142]. - The net fair value of financial instruments with currency risk was $164 million, with a potential loss or gain of $271 million and $(268) million from a hypothetical 10% change in exchange rates [187]. - The company experienced growth in gasoline volumes from new application launches and program ramp-ups in multiple regions, including Europe and North America [164].

Financial Performance - Net sales for Q3 2025 reached $902 million, a 9% increase from $826 million in Q3 2024, with a 3% contribution from favorable foreign currency translation[3] - Adjusted EBIT for Q3 2025 was $133 million, reflecting a margin of 14.7%, up from $117 million and a margin of 14.2% in Q3 2024[3] - Net income for Q3 2025 was $77 million, compared to $52 million in Q3 2024, resulting in a net income margin of 8.5%[3] - Gross profit for Q3 2025 was $186 million, up from $166 million in Q3 2024, reflecting a gross margin of 20.6%[27] - Net income for the nine months ended September 30, 2025, was $226 million, compared to $182 million for the same period in 2024, representing a 24.2% increase[30] - Adjusted EBITDA for the nine months ended September 30, 2025, was $477 million, an increase from $445 million in 2024, with an adjusted EBITDA margin of 17.7%[31] - The net income margin for Q3 2025 was 8.5%, compared to 6.3% in Q3 2024, indicating improved profitability[31] Cash Flow and Liquidity - Adjusted free cash flow for Q3 2025 totaled $107 million, an increase from $71 million in Q3 2024[15] - The company reported a net cash provided by operating activities of $314 million for the nine months ended September 30, 2025, compared to $277 million in 2024[30] - The company reported a cash flow from operations of $100 million for the three months ended September 30, 2025, compared to $67 million for the same period in 2024[35] - Cash and cash equivalents increased to $230 million as of September 30, 2025, from $125 million at the end of 2024[29] - The company reported $860 million in available liquidity as of September 30, 2025, including $230 million in unrestricted cash[16] Debt and Repurchase Activities - The company executed a $50 million voluntary early debt repayment during Q3 2025[1] - Garrett repurchased $84 million of common stock in Q3 2025, with a remaining repurchase capacity of $114 million[17] Outlook and Projections - Garrett raised its full-year 2025 net sales outlook to between $3.5 billion and $3.6 billion, up from the previous range of $3.4 billion to $3.6 billion[19] - Adjusted EBIT for the full year 2025 is projected to be between $490 million and $530 million, with a net income range of $265 million to $295 million[37] - Adjusted EBITDA for the full year 2025 is expected to be between $610 million and $650 million, including depreciation of $95 million and stock compensation expense of $25 million[37] - Reported net sales for 2025 are anticipated to grow by 1% to 4%, with constant currency sales growth projected to be between (1)% and 2%[36] - Garrett's outlook for 2025 includes expectations of flat to 2% growth in light vehicle industry production compared to 2024[23] Operational Insights - Adjusted EBIT margin and Adjusted EBITDA margin are calculated as a percentage of net sales, providing insights into operational performance[6] - The company incurred repositioning costs of $18 million and acquisition expenses of $6 million in the full year 2025 outlook[37] - Constant currency sales growth for gasoline was 10% for the three months ended September 30, 2025, while diesel saw a constant currency sales decline of 4%[34] Assets and Liabilities - Total assets as of September 30, 2025, were $2,436 million, compared to $2,276 million as of December 31, 2024, indicating a 7.0% increase[29] - The company’s total liabilities increased to $3,249 million as of September 30, 2025, from $2,949 million at the end of 2024[29] Interest and Other Income - Interest expense decreased to $29 million in Q3 2025 from $37 million in Q3 2024, contributing to improved net income[27] - The company reported interest income of $1 million for the three months ended September 30, 2025, compared to $0 million in the same period of 2024[2]

Core Insights - Garrett Motion Inc. reported strong financial results for Q3 2025, with net sales of $902 million, a 9% increase year-over-year, and a net income of $77 million, up from $52 million in Q3 2024 [3][5][14] - The company declared a cash dividend of $0.08 per share, reflecting a $0.02 increase, and executed a $50 million voluntary early debt repayment [3][4] - Garrett's Adjusted EBIT margin expanded to 14.7%, and the company generated $107 million in adjusted free cash flow, enabling significant share repurchases and a dividend increase [4][5][18] Financial Performance - **Net Sales**: Q3 2025 net sales reached $902 million, up from $826 million in Q3 2024, with a constant currency growth of 6% [5][7] - **Net Income**: The net income for Q3 2025 was $77 million, resulting in a net income margin of 8.5%, compared to 6.3% in Q3 2024 [14][17] - **Adjusted EBIT**: Adjusted EBIT for Q3 2025 was $133 million, with an adjusted EBIT margin of 14.7%, an increase from 14.2% in Q3 2024 [17][33] - **Adjusted Free Cash Flow**: Adjusted free cash flow was $107 million, up from $71 million in Q3 2024, driven by higher adjusted EBIT and lower capital expenditures [18][39] Operational Highlights - The company secured several new light vehicle turbo programs, including awards for range-extended electric vehicles, contributing to over $40 million in expected lifetime revenue from turbochargers for data center backup power generation [4][5] - Garrett continues to strengthen its leadership in turbocharging and is advancing its zero-emission technologies, with increased interest from OEMs and industrial customers [4][5] Liquidity and Capital Resources - As of September 30, 2025, Garrett had $860 million in available liquidity, including $230 million in unrestricted cash and $630 million in undrawn commitments under its revolving credit facility [19][20] - The total principal amount of debt outstanding was $1,490 million, with a share repurchase of $84 million executed during Q3 2025 [20][19] Full Year 2025 Outlook - The company revised its full-year 2025 outlook, projecting net sales between $3.5 billion and $3.6 billion, with a net income range of $265 million to $295 million [21][22] - The outlook reflects expectations of flat to 2% growth in light vehicle industry production and commercial vehicle industry production for 2025 [23][22]