Autoliv (NYSE:ALV) has just posted its FY 2025 third quarter results, with revenue of about US$2.7 billion and basic EPS of US$2.29, set against trailing twelve month revenue of roughly US$10.6 billion and EPS of US$9.71 that reflect a 19.4% earnings growth rate over the past year. Over recent quarters the company has reported revenue between US$2.58 billion and US$2.71 billion with quarterly EPS in a range of roughly US$1.71 to US$3.10, while trailing net margins have moved from 6.0% to 7.1%, giving this set of results a cleaner margin story for investors to weigh.

See our full analysis for Autoliv.

With the numbers on the table, the next step is to see how this earnings run rate lines up with the prevailing narratives around Autoliv’s growth, risks, and profit quality, and where the data starts to challenge those stories.

7.1% net margin steadies profit picture

• On a trailing basis, Autoliv generated US$10.6b of revenue and US$752 million of net income, which works out to a 7.1% net margin compared with 6.0% a year ago.
• What stands out for the bullish view is that this higher margin is paired with trailing EPS of US$9.71, up from US$7.56 a year earlier, while quarterly EPS through FY 2025 has stayed in a relatively tight band between US$2.15 and US$3.10, suggesting profits are not purely driven by a one off spike.
  • Supporters of the bullish case on quality argue that a 19.4% earnings growth rate over the past year alongside a 7.1% margin shows the business can translate revenue into profit, rather than relying only on top line expansion.
  • At the same time, the move from a 6.0% to 7.1% margin gives bulls a data point that profitability has improved on the reported numbers, even though future earnings growth forecasts of 14.2% per year are below the broader US market forecast of 16.1%.

Earnings growth outpaces revenue forecasts

• Over the last 12 months, earnings grew 19.4% while revenue on a trailing basis sits at US$10.6b, and analysts expect earnings to grow about 14.2% per year compared with a 3.8% annual revenue growth forecast.
• Bears point out that revenue growth expectations of 3.8% a year, below the US market benchmark of 10.6%, leave less room for error if costs rise, yet the recent pattern shows EPS moving from US$7.56 to US$9.71 over the last year even without rapid sales growth.
  • Critics highlight that slower revenue forecasts could limit how far earnings can grow, but the trailing 12 month net income of US$752 million, up from US$626 million a year ago, indicates profitability has kept pace with past growth rates of about 17.7% per year over five years.
  • What challenges the bearish worry is that quarterly net income has held between US$138 million and US$243 million across the last six reported quarters, which shows earnings have been present in each period even with only modest changes in quarterly revenue around the US$2.6b mark.

To see how this earnings run rate lines up with longer term forecasts, valuation work, and risk checks, take a closer look at the full narrative range for Autoliv. 📊 Read the full Autoliv Consensus Narrative.

P/E of 12x versus higher peers

• Autoliv trades on a trailing P/E of 12x, compared with a peer average of 39.3x and an industry average of 23.9x, while the share price of US$121.24 also sits below both an analyst price target reference of US$138.73 and a DCF fair value estimate of about US$171.19.
• For investors leaning bullish, this valuation gap heavily supports the idea that the current price does not fully reflect the 19.4% trailing earnings growth and the 7.1% margin, although the presence of high debt and an unstable dividend record means the discount may also be factoring in balance sheet and income reliability risks.
  • Supporters of a bullish angle point to the roughly 29.2% difference between the DCF fair value and the market price as a sign that the market is applying a lower multiple than both peers and modelled cash flows would suggest.
  • On the other hand, the high level of debt and the description of the dividend track record as unstable give cautious investors specific reasons why the valuation might stay below the peer P/E of 39.3x even with current profitability metrics.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Autoliv's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Autoliv’s higher net margin sits alongside high debt, an unstable dividend record, and relatively modest revenue growth expectations compared with broader market benchmarks.

If that mix of leverage and income uncertainty makes you cautious, check out solid balance sheet and fundamentals stocks screener (390 results) to focus on companies with stronger financial cushions and more resilient balance sheets right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.