One-glance verdict
Undervalued
$81.63 our estimate vs market $66.13
Wall Street consensus: $73.39 (-10.1% lower than our fair-value estimate)
19% below our estimate, below the bear case
Fundamentals snapshot
Magna International Inc.
MGA · NYQ · Consumer Cyclical · Auto Parts
Current price
$66.13
52-week range
$43.11 - $73.22
Market cap
$17.69B
Balance sheet
Watch
7.67x Adequate
Net debt $5.04B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 6.5% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 33.7% above its 5-year average P/E.
- Risk Net debt grew 32.2% over 3 years.
What this company does
Magna International Inc.
Magna International is a major auto parts supplier that makes nearly every component of a car, from seats and mirrors to complex systems for electric vehicles. The company makes money by selling these parts directly to major automakers, so its business does well when lots of new cars are being sold globally. Because Magna supplies parts for both traditional gas-powered and new electric cars, it is a key player in the automotive supply chain (the network of companies that create and distribute a product).
How the company got here
Founded in a garage in 1957 by Frank Stronach, Magna started as a small tool-and-die shop in Toronto, Canada. Through a focus on the automotive industry and a series of acquisitions, it expanded its capabilities and geographic reach, particularly in the 1990s. A key turning point was the 1998 acquisition of Steyr-Daimler-Puch's automotive operations, which established Magna's unique ability to engineer and assemble complete vehicles for other carmakers. Over the last two decades, Magna has grown into one of the world's largest auto suppliers through both internal growth and strategic purchases, such as acquiring a transmission supplier to expand in China and an active safety company to bolster its technology for self-driving features.
What it actually does
Magna International is a major parts manufacturer for the world's biggest car brands, including General Motors, Ford, BMW, and Tesla. Think of them as a giant, high-tech workshop that car companies hire to design and build crucial parts of a vehicle. These parts range from the metal body and frame of the car to the seats you sit on and the electronic systems that help you drive. In some cases, Magna even engineers and assembles the entire car for an automaker, a rare capability for a parts supplier.
Body Exteriors & Structures
This is Magna's largest segment by revenue and it produces the foundational parts of a car. It manufactures the car's main frame (the chassis), body panels, doors, and even specialized enclosures for electric vehicle batteries. Automakers pay this division to supply these large, structural components which are essential for the vehicle's safety and performance. The products are designed to be lightweight to help improve fuel efficiency and the driving range of electric cars.
Power & Vision
This division focuses on the technology that powers a vehicle and helps the driver see. It produces a wide range of parts for both traditional gasoline-powered cars and electric vehicles (EVs), such as transmissions, electric motors, and inverters (a key component for controlling an EV's motor). This segment also makes advanced driver-assistance systems (ADAS) — the technology behind features like automatic emergency braking and lane-keeping assist — which includes cameras, radar, and control units. As cars become more electric and automated, this part of Magna's business is positioned for significant growth.
Seating Systems
Just as the name suggests, this segment is all about the seats inside a vehicle. Magna designs and manufactures everything from the complete seat to the internal structures, adjustment mechanisms, and foam cushions for cars, trucks, and buses. They focus on making seats that are comfortable, safe, and increasingly flexible, with features that allow for easy reconfiguration to create more cargo space. Automakers and truck companies pay this division for innovative and high-quality seating solutions for their vehicles.
Complete Vehicles
This is a unique part of Magna's business where they act as a contract manufacturer, assembling entire vehicles for automakers. Instead of just supplying parts, car companies like Mercedes-Benz, BMW, and Tata Motors hire Magna to build certain models from start to finish. This segment handles the entire process, from engineering and integrating all the systems to the final assembly and painting of the car. It's a specialized service for automakers that need extra manufacturing capacity or expertise for lower-volume or niche vehicles.
What management is betting on now
Magna's leadership is heavily focused on the auto industry's shift to electric vehicles (EVs) and more automated driving. They are investing in developing and producing key components for EVs, such as battery enclosures and electric drive systems, to capture a larger share of this growing market. Another major priority is expanding their expertise in advanced driver-assistance systems (ADAS), the technologies that are the building blocks for self-driving cars. The company is also focused on improving its operational excellence (running its factories more efficiently) to restore margins (the profit made on each dollar of sales).
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$1.46B
FY2025 Q4
$2.29B
Revenue
$42.01B
Net income
$829.00M
Diluted EPS
2.93
Operating cash flow
$3.60B
Free cash flow
$2.29B
Fetching…
Sources
Revenue
$42.84B
Net income
$1.01B
Diluted EPS
3.52
Operating cash flow
$3.63B
Free cash flow
$1.46B
Fetching…
Sources
Is it cheap or expensive?
Fair value $81.63 vs current price $66.13
Wall Street consensus is the average analyst price target: $73.39 (-10.1% lower than our fair-value estimate).
Our most-likely fair value is $81.63 a share — about 23.4% above today's price of $66.13, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $5.0B. Interest coverage 7.7x.
Net debt
$5.04B
Interest coverage
7.67x
Magna International Inc.'s profit covers its interest bill about 7.7 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
MGA
BASELINE
Magna International Inc.
Total debt $6.47B Interest coverage 7.67x This is the baseline the peer rows are being compared against.
Total debt $6.65B Interest coverage 7.43x -3% vs MGA Has roughly the same debt cushion as MGA.
Total debt $4.06B Interest coverage 13.36x +74% vs MGA Carries about 1.7x more debt cushion than MGA.
Total debt $5.68B Interest coverage 5.59x -27% vs MGA Carries about 1.4x less debt cushion than MGA.
Total debt $2.19B Interest coverage 10.58x +38% vs MGA Carries about 1.4x more debt cushion than MGA.
Total debt $3.52B Interest coverage 7.71x +1% vs MGA Has roughly the same debt cushion as MGA.
What you should know
The case for and against MGA
3 Rewards
2 Risks
Rewards
-
Returns 6.5% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 10/10 years.
-
Dividend yield is 3.0% with 35-year payout history.
Risks
-
Stock trades 33.7% above its 5-year average P/E.
-
Net debt grew 32.2% over 3 years.
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)
23.96x
Forward P/E
8.50x
P/B
1.50x
P/S
0.41x
EV/EBITDA
5.33x
PEG ratio
0.36x
Profitability
How much profit each dollar creates
Gross margin
14.7%
Operating margin
5.6%
Net margin
1.8%
ROE
6.5%
ROA
4.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.53x
Current ratio
1.22x
Quick ratio
0.82x
Total debt
$6.47B
Total cash
$1.43B
Growth
How the business has been compounding
Revenue TTM
$165.48B
Revenue 5Y CAGR
3.8%
EPS TTM
2.76
EPS 5Y CAGR
13.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$12.48B
Free CF TTM
$2.29B
FCF margin
1.4%
Dividend
Shareholder payout
Yield
3.0%
Payout ratio
72.1%
Last ex-div date
2026-08-14