XPEL INC (NASDAQ:XPEL) – A GARP Candidate with Strong Fundamentals

XPEL INC (NASDAQ:XPEL) surfaced in our Peter Lynch-inspired screen, which identifies companies with sustainable growth and reasonable valuations. XPEL, a manufacturer of automotive paint protection films and window tints, demonstrates solid financial health, profitability, and growth potential—key traits for long-term investors.

Why XPEL Fits the GARP Approach

• Earnings Growth: XPEL’s 5-year EPS growth stands at 26.4%, well above the 15% minimum threshold in our screen. While recent earnings dipped slightly (-7.57% YoY), long-term trends remain strong.
• Profitability: The company’s Return on Equity (ROE) of 20.14% and Return on Invested Capital (ROIC) of 19.29% place it in the top tier of its industry, indicating efficient capital use.
• Financial Health: With a Debt/Equity ratio near zero and a Current Ratio of 4.29, XPEL has a sturdy balance sheet, reducing risk for long-term holders.
• Valuation: The stock trades at a P/E of 21.95, slightly below the S&P 500 average, though its PEG ratio of 4.11 suggests growth expectations are priced in.

Fundamental Snapshot

Our fundamental analysis report rates XPEL a 7 out of 10, with high marks for profitability and financial health. Key strengths include:

• Industry-leading margins (Gross Margin: 42.24%, Operating Margin: 14.06%).
• Strong revenue growth (26.48% CAGR over 5 years).
• Positive cash flow and no significant debt burden.

While valuation appears stretched relative to peers, XPEL’s growth trajectory and operational efficiency may justify the premium for patient investors.

For more stocks matching the Peter Lynch strategy, explore our screener results.

Disclaimer

This is not investment advice. Always conduct your own research before making financial decisions.