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Booz Allen Hamilton Holding Corporation (BAH) - free report >>
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Booz Allen Hamilton Holding Corporation (BAH) - free report >>
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Here's Why Investors Should Hold Aptiv (APTV) Stock Now
Aptiv PLC (APTV - Free Report) is benefiting from its lucrative connected cars market as well as solid liquidity.
APTV’s earnings and revenues for 2023 are expected to improve 46.5% and 11.8%, respectively, from the corresponding year-ago reported figures.
Factors That Augur Well
Aptiv has a sound liquidity position. Its current ratio (a measure of liquidity) was at 2.66 at the end of third-quarter 2022, higher than 2.63 recorded at the end of second-quarter and the prior-year quarter's 2.11. A current ratio greater than 1.5, is usually considered good for a company. This may imply that the risk of default is less.
Aptiv is exposed to the lucrative connected cars market. With safety becoming a key selling point for connected cars, automakers are increasingly seeking related technologies. This is one of the reasons behind quick advancement of the driver-assistance system market.
Demand for personalization, infotainment connectivity and convenience are also increasing rapidly. Furthermore, added features require more wiring inside vehicles.
A Key Risk
Aptiv is witnessing escalation in costs as it continues to invest in organic as well as inorganic growth and remains embroiled in legal matters. Investments in products like autonomous driving software are expected to make meaningful contributions to the company’s growth after 2022, indicating that acceptance and integration of technology will take longer time.
Zacks Rank and Stocks to Consider
Aptiv currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corp. (BAH - Free Report) and DocuSign, Inc. (DOCU - Free Report) .
Booz Allen carries a Zacks Rank #2 (Buy) at present. BAH has a long-term earnings growth expectation of 8.9%.
Booz Allen delivered a trailing four-quarter earnings surprise of 8.8%, on average.
DocuSign is currently Zacks #1 Ranked. DOCU has a long-term earnings growth expectation of 13.7%.
DOCU delivered a trailing four-quarter earnings surprise of 6.6%, on average.