Stock Analysis · Autoliv Inc (ALV)
Overview
Autoliv is a global automotive safety supplier focused on products designed to protect vehicle occupants in a crash and help reduce injuries. The company sells mainly to large vehicle manufacturers and operates across the Americas, Europe, and Asia. Its business is tied to global light vehicle production, but it also benefits from the steady increase in safety requirements per vehicle as regulators and carmakers add more protection systems.
Its revenue is largely concentrated in passive safety, the category that includes products that act during or immediately before a collision. Based on company reporting, the business mix is approximately:
- Airbags and related inflators/cushions: about 65% to 70% of revenue. This is the company’s largest activity and includes frontal, side, curtain, knee, and pedestrian protection airbags.
- Seatbelts and restraint systems: about 30% to 35% of revenue. This includes seatbelt webbing, retractors, pretensioners, and buckles.
- Other safety solutions: a small portion of revenue. This includes selected electronics and safety-related components, but the company is much less diversified here than some broader auto suppliers.
Autoliv’s customer base is diversified across major automakers, which reduces dependence on one manufacturer, but the company remains exposed to the overall health of the auto industry. The business model is manufacturing-heavy, so scale, engineering capability, quality control, and long-term relationships with automakers matter a great deal.
The long-term picture is shaped by two simple forces: more vehicles globally over time, and more safety content installed in each vehicle. That second point is especially important because it allows Autoliv to grow even when vehicle volumes are not moving quickly.
The long-term financial flow shows a business that has improved its earnings quality since 2022. Revenue has moved above the $10 billion level, gross profit has recovered, and operating income has risen faster than sales, suggesting better pricing, mix, and cost control after a difficult inflationary period.
Key Figures
| Metric | Value | Sector ⓘ |
|---|---|---|
| Date | Sep 12, 2026 | |
| Context | ||
| Sector | Consumer Cyclical | |
| Industry | Auto Parts | |
| Market Cap ⓘ | $8.87B | |
| Beta ⓘ | 1.37 | |
Value (Cheapness) | ||
| P/E Ratio ⓘ | 14.28 | 17.10 |
| FCF Yield ⓘ | 8.52% | 8.53% |
| EBIT / EV ⓘ | 9.73% | 6.46% |
| PEG ⓘ | 0.85 | |
Growth (Business expansion) | ||
| Revenue Growth ⓘ | 3.30% | 5.75% |
| RPS Growth (5Y CAGR) ⓘ | 10.64% | 9.14% |
| EPS Growth (5Y CAGR) ⓘ | 0.45% | -18.21% |
| Margin Growth (5Y Trend) ⓘ | 1.88% | -0.23% |
| FCF Growth (5Y CAGR) ⓘ | 24.67% | 4.91% |
Quality (Business durability) | ||
| ROIC (Latest) ⓘ | 17.02% | 12.61% |
| ROIC (5Y Median) ⓘ | 12.81% | 10.72% |
| Net Debt / EBIT (Latest) ⓘ | 1.80 | 2.10 |
| Net Debt / EBIT (5Y Median) ⓘ | 1.77 | 2.32 |
| Operating Margin (Latest) ⓘ | 9.67% | 9.25% |
| Operating Margin (5Y Median) ⓘ | 8.19% | 9.64% |
| Debt to Equity (Latest) ⓘ | 87.91% | 75.78% |
| Profit Margin (Latest) ⓘ | 5.80% | 5.33% |
| Free Cash Flow (Latest) ⓘ | $756.00M | |
Momentum (Price trend) | ||
| 3Y Return ⓘ | +33.10% | +14.53% |
| 12M Return (excl. last month) ⓘ | +7.32% | +3.08% |
| 6M Return ⓘ | +18.51% | +0.55% |
| Price vs. 200-Day MA ⓘ | +3.01% | -0.54% |
Autoliv is a mid-sized company in public market terms, with share-price volatility above the broader market as shown by a beta around 1.36. The overall profile is balanced: valuation looks less demanding than the sector median, profitability and returns on capital are solid, and cash generation has strengthened meaningfully. Growth is not spectacular on a one-year basis, but the longer trend in revenue per share, margins, and free cash flow is stronger than many peers in the auto parts space.
Growth
The automotive safety market is a structurally relevant segment because safety content tends to rise over time. Governments continue to tighten crash standards, consumers increasingly expect advanced protection, and automakers use safety ratings as part of their brand positioning. Even in a mature vehicle market, that creates room for content growth per car.
Autoliv’s strategy fits that environment reasonably well. The company is centered on categories where scale and reliability matter, and where automakers are unlikely to compromise on quality. It continues to invest in engineering and product development while staying focused on its core safety niches instead of spreading into many unrelated components. That focus can help preserve returns and technical depth.
Revenue growth has been uneven, which is normal for a company tied to vehicle production. After strong rebounds in 2022 and 2023, growth cooled and turned negative for parts of 2024 before returning to low single-digit and then mid-single-digit expansion through much of 2025 and into 2026. The latest pace, around 3%, is below the sector median, so the growth case currently rests more on content gains and execution than on rapid top-line acceleration.
Cash generation is one of the more encouraging features. Free cash flow moved from weak or negative territory in the earlier period to several hundred million dollars more recently, and its five-year growth rate is far ahead of the sector median. For a manufacturing company, that matters because cash funds product programs, plant efficiency, debt management, and shareholder distributions without relying as heavily on external financing.
A practical catalyst is the continued rise in safety requirements and the spread of higher-value restraint systems across more vehicle models, including electric vehicles. Autoliv has also highlighted operational discipline and footprint optimization in recent company communications, which can support earnings growth even if global auto production stays moderate rather than strong.
Risks
This article is for informational purposes only and does not constitute financial advice. Some content is AI-generated. See Disclaimer
