We assign a fundamental rating of 5 out of 10 to GTES. GTES was compared to 132 industry peers in the Machinery industry. GTES has only an average score on both its financial health and profitability. GTES is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

GTES had positive earnings in the past year.
In the past year GTES had a positive cash flow from operations.
GTES had positive earnings in each of the past 5 years.
Each year in the past 5 years GTES had a positive operating cash flow.

1.2 Ratios

GTES has a Return On Assets (3.31%) which is in line with its industry peers.
The Return On Equity of GTES (7.02%) is comparable to the rest of the industry.
GTES has a Return On Invested Capital (6.29%) which is comparable to the rest of the industry.
GTES had an Average Return On Invested Capital over the past 3 years of 5.94%. This is below the industry average of 10.24%.
The 3 year average ROIC (5.94%) for GTES is below the current ROIC(6.29%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	3.31%
ROE	7.02%
ROIC	6.29%

ROA(3y)3.05%

ROA(5y)2.83%

ROE(3y)6.93%

ROE(5y)6.64%

ROIC(3y)5.94%

ROIC(5y)5.37%

1.3 Margins

With a decent Profit Margin value of 6.93%, GTES is doing good in the industry, outperforming 60.61% of the companies in the same industry.
GTES's Profit Margin has declined in the last couple of years.
The Operating Margin of GTES (15.08%) is better than 70.45% of its industry peers.
GTES's Operating Margin has improved in the last couple of years.
GTES's Gross Margin of 40.78% is fine compared to the rest of the industry. GTES outperforms 75.76% of its industry peers.
GTES's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	15.08%
PM (TTM)	6.93%
GM	40.78%

OM growth 3Y1.81%

OM growth 5Y5.56%

PM growth 3Y-12.55%

PM growth 5Y-23.86%

GM growth 3Y1.68%

GM growth 5Y1.85%

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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 GTES is destroying value.
Compared to 1 year ago, GTES has less shares outstanding
Compared to 5 years ago, GTES has less shares outstanding
Compared to 1 year ago, GTES has a worse debt to assets ratio.

2.2 Solvency

An Altman-Z score of 2.30 indicates that GTES is not a great score, but indicates only limited risk for bankruptcy at the moment.
GTES's Altman-Z score of 2.30 is in line compared to the rest of the industry. GTES outperforms 42.42% of its industry peers.
GTES has a debt to FCF ratio of 7.83. This is a slightly negative value and a sign of low solvency as GTES would need 7.83 years to pay back of all of its debts.
The Debt to FCF ratio of GTES (7.83) is comparable to the rest of the industry.
GTES has a Debt/Equity ratio of 0.65. This is a neutral value indicating GTES is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.65, GTES is not doing good in the industry: 64.39% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Debt/Equity	0.65
Debt/FCF	7.83
Altman-Z	2.3

ROIC/WACC0.67

WACC9.34%

2.3 Liquidity

A Current Ratio of 3.52 indicates that GTES has no problem at all paying its short term obligations.
GTES has a better Current ratio (3.52) than 84.09% of its industry peers.
GTES has a Quick Ratio of 2.50. This indicates that GTES is financially healthy and has no problem in meeting its short term obligations.
GTES has a Quick ratio of 2.50. This is amongst the best in the industry. GTES outperforms 84.09% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.52
Quick Ratio	2.5

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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 been growing slightly by 7.91% over the past year.
The Earnings Per Share has been growing slightly by 7.44% on average over the past years.
GTES shows a decrease in Revenue. In the last year, the revenue decreased by -0.75%.
The Revenue has been growing slightly by 2.00% on average over the past years.

EPS 1Y (TTM)7.91%

EPS 3Y-0.24%

EPS 5Y7.44%

EPS Q2Q%18.18%

Revenue 1Y (TTM)-0.75%

Revenue growth 3Y-0.64%

Revenue growth 5Y2%

Sales Q2Q%3.01%

3.2 Future

Based on estimates for the next years, GTES will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.97% on average per year.
The Revenue is expected to grow by 2.63% on average over the next years.

EPS Next Y12.31%

EPS Next 2Y9.27%

EPS Next 3Y11.1%

EPS Next 5Y9.97%

Revenue Next Year1.01%

Revenue Next 2Y2.04%

Revenue Next 3Y2.48%

Revenue Next 5Y2.63%

3.3 Evolution

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

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4. Valuation

4.1 Price/Earnings Ratio

GTES is valuated correctly with a Price/Earnings ratio of 15.65.
86.36% of the companies in the same industry are more expensive than GTES, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.39. GTES is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 14.46 indicates a correct valuation of GTES.
87.12% of the companies in the same industry are more expensive than GTES, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 25.72. GTES is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	15.65
Fwd PE	14.46

4.2 Price Multiples

GTES's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GTES is cheaper than 82.58% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GTES indicates a somewhat cheap valuation: GTES is cheaper than 68.94% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	21.25
EV/EBITDA	10.45

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GTES may justify a higher PE ratio.