Aptiv PLC: AI Stock Remains Bullish, Tops Q3 Earnings & Revenue Estimates

Aptiv Stock Up 237% Since March

Aptiv PLC (NYSE:APTV), is an artificial intelligence (AI) company that has been bullish since the stock market bottomed on coronavirus fears back in March, advancing 237% since then.

While many tech stocks have seen their prices trend sideways over the last few months, Aptiv stock continues to trend steadily higher, hitting a 52-week high of $102.18 on October 20.

Thanks to strong third-quarter results that topped earnings and revenue estimates, APTV stock has managed to hold onto its gains.

Thanks to the company’s strong financial results, a strategic acquisition strategy, and strong outlook, Aptiv continues to be an excellent AI stock that investors should keep on their radar.

Chart courtesy of StockCharts.com

APTV Stock Overview

Aptiv PLC AI makes driving safer and greener. The Dublin, Ireland-based company designs, manufactures, and sells vehicle components around the world. With a presence in 44 countries, APTV’s software and systems addresses the toughest challenges facing the auto industry. (Source: “UniCredit Automotive Credit Conference 2020,” Aptiv PLC, June 25, 2020.)

Safety is the first challenge that Aptiv has been addressing.

Each year, about 1.4 million people die in road-related accidents. A whopping 94% of all motor vehicle accidents are caused by human error. Two percent of crashes are a result of vehicle component failure. (Source: “Critical Reasons for Crashes Investigated in the National Motor Vehicle Crash Causation Survey,” U.S. Department of Transportation, last accessed October 29, 2002.)

Aptiv hopes its AI technology will make human-caused vehicle crashes a thing of the past.

Emissions is another challenge that Aptiv has been tackling.

Emissions regulations around the world are becoming increasingly stringent. Aptiv’s zero-emissions goal includes minimizing a vehicle’s total lifecycle environmental impact. the company’s green technologies include high-voltage wiring and electrical centers, aluminum wire harnesses for light weighting, architecture optimization for mass and weight reduction, and driver assistance systems.

Moreover, with its seamless integration between cars, passengers, and the world around them, Aptiv is a leader in connectivity technology.

The company’s connected technology includes secure connected gateways (cellular, satellite, dedicated short-range communications [DSRC], and Global Positioning System [GPS]), vehicle-to-vehicle/infrastructure, wireless (Wi-Fi and BT), media modules, consumer ports, over-the-air for software and firmware, edge processing, cloud analytics, and cybersecurity.

Strong Q3 Results

On October 29, Aptiv announced that its third-quarter revenue increased three percent year-over-year to $3.7 billion. This growth came in spite of global vehicle production declining four percent. (Source: “Aptiv Reports Third Quarter 2020 Financial Results,” Aptiv PLC, October 29, 2020.)

The company’s third-quarter net income was $283.0 million ($1.05 per share), a 15% increase over the $246.0 million ($0.96 per share) in the same period last year. Adjusted net income was $320.0 million, or $1.13 per share, compared to $325.0 million, or $1.27 per diluted share, in the prior-year period.

Third-quarter adjusted operating income was $389.0 million, compared to $410.0 million in the prior-year period. Aptiv generated $559.0 million of cash flow from operations in the third quarter, compared to $325.0 million in the third quarter of 2019.

For fiscal 2020, Aptiv PLC expects to report:

• Total revenue between $12.5 and $12.7 billion
• Adjusted earnings per share between $1.65 and $1.80
• Adjusted operating income between $775.0 and $825.0 million

Analyst Take

Despite the tough economic climate, AI automotive parts manufacturer Aptiv PLC continues to do well. In the third quarter, the company reported better-than-expected revenue and earnings.

The auto industry will invariably experience periods of growth and volatility, but Aptiv’s flexible business model and strong balance sheet should position it for recovery outperformance and sustainable long-term growth.