Simply Wall St
Garrett Motion earnings beat puts guidance in focus
Garrett Motion (GTX) caught investor attention after reporting quarterly revenue of US$976 million, up 6.9% year on year, along with EBITDA results and full-year guidance that topped analyst expectations.
The share price reaction has been strong around the update, with Garrett Motion up 3.1% over the last day and 5.3% over the past week. However, the 90-day share price return is down 18.4% after a softer 30-day patch, while the 1-year total shareholder return of 103.8% and 3-year total shareholder return of about 2.8x point to momentum that has built over a longer window.
Compare Garrett Motion’s momentum and guidance beat with other potential breakouts on our hand picked list of 31 high quality undervalued stocks.
Garrett Motion has paired a strong guidance beat with a sharp pullback over 90 days, which leaves a different question on the table: Does the current valuation still skew the risk reward toward buyers after this rebound?
Most Popular Narrative: 27% Undervalued
Garrett Motion’s most followed narrative pegs fair value around $37.17, comfortably above the last close at $27.07. This puts the recent earnings beat and guidance upgrade into a different light for anyone weighing upside against the 90 day pullback.
Ongoing innovation and proof of concept awards in zero emission technologies (E Powertrain, E Cooling, and fuel cell compressors) and expansion in industrial/non automotive end markets are positioning Garrett to capture higher margin business opportunities and diversified growth, supporting both revenue and future margin expansion.
See why 14 investors see Garrett Motion as 27% undervalued.
Result: Fair Value of $37.17 (UNDERVALUED)
Still, Garrett Motion’s reliance on internal combustion engine turbochargers and exposure to tariff and currency swings could challenge the undervalued narrative if these pressures intensify.
Find out about the key risks to this Garrett Motion narrative.
Next Steps
Mixed messages on Garrett Motion so far. If the blend of concerns and potential upside feels finely balanced, it is worth reviewing the 4 key rewards and 3 important warning signs.
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