Taking everything into account, AXTA scores 5 out of 10 in our fundamental rating. AXTA was compared to 83 industry peers in the Chemicals industry. AXTA has an excellent profitability rating, but there are some minor concerns on its financial health. AXTA has a decent growth rate and is not valued too expensively.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

AXTA had positive earnings in the past year.
In the past year AXTA had a positive cash flow from operations.
In the past 5 years AXTA has always been profitable.
Each year in the past 5 years AXTA had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 5.86%, AXTA belongs to the top of the industry, outperforming 84.34% of the companies in the same industry.
The Return On Equity of AXTA (19.96%) is better than 90.36% of its industry peers.
With an excellent Return On Invested Capital value of 9.96%, AXTA belongs to the best of the industry, outperforming 81.93% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AXTA is in line with the industry average of 6.11%.
The last Return On Invested Capital (9.96%) for AXTA is above the 3 year average (7.99%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	5.86%
ROE	19.96%
ROIC	9.96%

ROA(3y)3.93%

ROA(5y)3.43%

ROE(3y)16.37%

ROE(5y)15.06%

ROIC(3y)7.99%

ROIC(5y)7.07%

1.3 Margins

AXTA has a better Profit Margin (8.81%) than 83.13% of its industry peers.
In the last couple of years the Profit Margin of AXTA has grown nicely.
With a decent Operating Margin value of 15.97%, AXTA is doing good in the industry, outperforming 79.52% of the companies in the same industry.
In the last couple of years the Operating Margin of AXTA has grown nicely.
Looking at the Gross Margin, with a value of 34.59%, AXTA is in the better half of the industry, outperforming 68.67% of the companies in the same industry.
AXTA's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	15.97%
PM (TTM)	8.81%
GM	34.59%

OM growth 3Y8.8%

OM growth 5Y3.79%

PM growth 3Y7.44%

PM growth 5Y5.93%

GM growth 3Y1.74%

GM growth 5Y-0.48%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AXTA is destroying value.
The number of shares outstanding for AXTA has been reduced compared to 1 year ago.
AXTA has less shares outstanding than it did 5 years ago.
AXTA has a better debt/assets ratio than last year.

2.2 Solvency

AXTA has an Altman-Z score of 2.42. This is not the best score and indicates that AXTA is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.42, AXTA is in the better half of the industry, outperforming 62.65% of the companies in the same industry.
The Debt to FCF ratio of AXTA is 10.04, which is on the high side as it means it would take AXTA, 10.04 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 10.04, AXTA is doing good in the industry, outperforming 65.06% of the companies in the same industry.
A Debt/Equity ratio of 1.49 is on the high side and indicates that AXTA has dependencies on debt financing.
AXTA has a worse Debt to Equity ratio (1.49) than 74.70% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.49
Debt/FCF	10.04
Altman-Z	2.42

ROIC/WACC0.82

WACC12.15%

2.3 Liquidity

AXTA has a Current Ratio of 2.20. This indicates that AXTA is financially healthy and has no problem in meeting its short term obligations.
With a Current ratio value of 2.20, AXTA perfoms like the industry average, outperforming 57.83% of the companies in the same industry.
A Quick Ratio of 1.59 indicates that AXTA should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.59, AXTA is doing good in the industry, outperforming 65.06% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.2
Quick Ratio	1.59

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 20.77% over the past year.
The Earnings Per Share has been growing slightly by 4.47% on average over the past years.
AXTA shows a decrease in Revenue. In the last year, the revenue decreased by -1.83%.
The Revenue has been growing slightly by 3.31% on average over the past years.

EPS 1Y (TTM)20.77%

EPS 3Y10.28%

EPS 5Y4.47%

EPS Q2Q%13.56%

Revenue 1Y (TTM)-1.83%

Revenue growth 3Y6.11%

Revenue growth 5Y3.31%

Sales Q2Q%-2.42%

3.2 Future

The Earnings Per Share is expected to grow by 10.08% on average over the next years. This is quite good.
Based on estimates for the next years, AXTA will show a small growth in Revenue. The Revenue will grow by 0.68% on average per year.

EPS Next Y13.79%

EPS Next 2Y11.19%

EPS Next 3Y10.61%

EPS Next 5Y10.08%

Revenue Next Year-2.77%

Revenue Next 2Y-0.41%

Revenue Next 3Y0.68%

Revenue Next 5Y0.68%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

AXTA is valuated correctly with a Price/Earnings ratio of 13.64.
Based on the Price/Earnings ratio, AXTA is valued a bit cheaper than the industry average as 78.31% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of AXTA to the average of the S&P500 Index (28.60), we can say AXTA is valued rather cheaply.
AXTA is valuated correctly with a Price/Forward Earnings ratio of 12.31.
Based on the Price/Forward Earnings ratio, AXTA is valued a bit cheaper than 78.31% of the companies in the same industry.
AXTA is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	13.64
Fwd PE	12.31

4.2 Price Multiples

69.88% of the companies in the same industry are more expensive than AXTA, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AXTA is valued a bit cheaper than 69.88% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	21.46
EV/EBITDA	9.01

4.3 Compensation for Growth

AXTA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of AXTA may justify a higher PE ratio.