One-glance verdict
Undervalued
$114.68 our estimate vs market $55.12
Wall Street consensus: $81.27 (-29.1% lower than our fair-value estimate)
52% below our estimate, below the bear case
Fundamentals snapshot
BorgWarner Inc.
BWA · NYQ · Consumer Cyclical · Auto Parts
Current price
$55.12
52-week range
$40.73 - $78.82
Market cap
$11.23B
Balance sheet
Healthy
13.36x Strong cushion
Net debt $1.62B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 0.2% last year.
- Reward Returns 8.1% on equity, ahead of 50% of its peers.
- Risk Stock trades 40.1% above its 5-year average P/E.
- Risk Insider ownership is only 0.6% (peer median: 0.8%).
What this company does
BorgWarner Inc.
BorgWarner sells parts for all kinds of cars, from ones that burn gas to electric ones, and their money mostly comes from making these parts. This is important because as cars change, BorgWarner's ability to supply parts for both old and new technologies will determine how successful they are.
How the company got here
BorgWarner's origins trace back to 1928 when several automotive parts manufacturers merged to form the Borg-Warner Corporation. [3] Over the decades, the company evolved, increasingly specializing in powertrain technology. A pivotal moment came in 1993 when BorgWarner relisted on the NYSE, sharpening its focus on automotive powertrain components like turbochargers and transmission systems. [3] More recently, BorgWarner has strategically acquired companies to enhance its capabilities in electric vehicle (EV) technology, including Delphi Technologies in 2020 and AKASOL in 2021. [1, 8] In a significant move in July 2023, BorgWarner spun off its fuel systems and aftermarket businesses into a new, independent company called PHINIA, allowing BorgWarner to concentrate more intensely on propulsion and electrification technologies. [1, 2]
What it actually does
BorgWarner designs and manufactures technology solutions that are integral to a vehicle's performance and efficiency. [7] These components are engineered for vehicles powered by traditional combustion engines, hybrid systems, and fully electric powertrains. [7] The company serves as a supplier to virtually all major global automakers, providing parts for passenger cars, light trucks, and commercial vehicles. [2, 7]
Air Management
This segment is dedicated to technologies that optimize a vehicle's air intake and exhaust systems. [1] The goal is to enhance fuel combustion efficiency and reduce harmful emissions. [1] Key products include turbochargers, which boost engine power by forcing more air into the engine, and emissions systems designed to clean exhaust gases. [1, 8] This area has historically been a significant revenue generator for BorgWarner and is adapting to include electrified components, such as eTurbos. [1, 5]
ePropulsion & Drivetrain
This segment is central to BorgWarner's strategic shift towards electric and hybrid vehicles. [1] It encompasses a broad array of products crucial for electric powertrains, including electric motors, power electronics like inverters (which manage electrical current), and integrated drive modules that combine several components into a single unit. [1, 8] This segment also includes components for hybrid vehicles and advanced drivetrain systems, representing a substantial and growing part of BorgWarner's business as the automotive industry increasingly embraces electrification. [1, 2]
What management is betting on now
BorgWarner's primary strategic objective is to accelerate growth in its electrification business while maintaining strong profitability. [1, 9] This is being pursued through its 'Charging Forward' strategy, which focuses on expanding its portfolio of electric vehicle products, such as eMotors and power electronics. [1] Management also aims to leverage its established expertise in combustion engine technologies to support the development of hybrid vehicles, viewing them as a vital step towards a fully electric future. [12, 16] Additionally, BorgWarner is investing in manufacturing process improvements, including the adoption of artificial intelligence (AI), and is actively acquiring companies to strengthen its capabilities in the EV sector. [12]
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$201.00M
FY2024 Q4
$521.00M
FY2025 Q1
$-37.00M
FY2025 Q2
$502.00M
FY2025 Q3
$257.00M
FY2025 Q4
$457.00M
FY2026 Q1
$9.00M
FY2026 Q2
$490.00M
Revenue
$3.65B
Net income
$277.00M
Diluted EPS
1.34
Operating cash flow
$586.00M
Free cash flow
$490.00M
Fetching…
Sources
Revenue
$3.53B
Net income
$242.00M
Diluted EPS
1.16
Operating cash flow
$152.00M
Free cash flow
$9.00M
Fetching…
Sources
Revenue
$3.57B
Net income
$-262.00M
Diluted EPS
-1.20
Operating cash flow
$619.00M
Free cash flow
$457.00M
Fetching…
Sources
Revenue
$3.59B
Net income
$158.00M
Diluted EPS
0.73
Operating cash flow
$368.00M
Free cash flow
$257.00M
Fetching…
Sources
Revenue
$3.64B
Net income
$224.00M
Diluted EPS
1.03
Operating cash flow
$579.00M
Free cash flow
$502.00M
Fetching…
Sources
Revenue
$3.52B
Net income
$157.00M
Diluted EPS
0.72
Operating cash flow
$82.00M
Free cash flow
$-37.00M
Fetching…
Sources
Revenue
$3.44B
Net income
$-405.00M
Diluted EPS
-1.78
Operating cash flow
$682.00M
Free cash flow
$521.00M
Fetching…
Sources
Revenue
$3.45B
Net income
$234.00M
Diluted EPS
1.04
Operating cash flow
$356.00M
Free cash flow
$201.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $114.68 vs current price $55.12
Wall Street consensus is the average analyst price target: $81.27 (-29.1% lower than our fair-value estimate).
Our most-likely fair value is $114.68 a share — about 108.1% above today's price of $55.12, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $1.6B. Interest coverage 13.4x.
Net debt
$1.62B
Interest coverage
13.36x
BorgWarner Inc.'s profit covers its interest bill about 13.4 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
BWA
BASELINE
BorgWarner Inc.
Total debt $4.06B Interest coverage 13.36x This is the baseline the peer rows are being compared against.
Total debt $6.47B Interest coverage 7.67x -43% vs BWA Carries about 1.7x less debt cushion than BWA.
Total debt $5.68B Interest coverage 5.59x -58% vs BWA Carries about 2.4x less debt cushion than BWA.
Total debt $3.52B Interest coverage 7.71x -42% vs BWA Carries about 1.7x less debt cushion than BWA.
Total debt $4.19B Interest coverage 9.88x -26% vs BWA Carries about 1.4x less debt cushion than BWA.
Total debt $1.50B Interest coverage 1.18x -91% vs BWA Carries about 11.4x less debt cushion than BWA.
What you should know
The case for and against BWA
3 Rewards
2 Risks
Rewards
-
Revenue grew 0.2% last year.
-
Returns 8.1% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 40.1% above its 5-year average P/E.
-
Insider ownership is only 0.6% (peer median: 0.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
27.56x
Forward P/E
9.33x
P/B
2.00x
P/S
0.78x
EV/EBITDA
6.39x
PEG ratio
0.25x
Profitability
How much profit each dollar creates
Gross margin
19.3%
Operating margin
10.6%
Net margin
2.9%
ROE
8.1%
ROA
6.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.70x
Current ratio
2.13x
Quick ratio
1.66x
Total debt
$4.06B
Total cash
$2.45B
Growth
How the business has been compounding
Revenue TTM
$14.34B
Revenue 5Y CAGR
4.9%
EPS TTM
2.00
EPS 5Y CAGR
-31.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.73B
Free CF TTM
$1.18B
FCF margin
8.2%
Dividend
Shareholder payout
Yield
1.2%
Payout ratio
34.0%
Last ex-div date
2026-09-01