• Investors may be wondering whether Autoliv stock now reflects its underlying value, or if the recent attention has left some mispricing on the table.
• The share price recently closed at US$121.25, with returns of 7.0% over 7 days, 15.2% over 30 days, 33.2% over 1 year, 49.8% over 3 years, 44.3% over 5 years and a small year to date loss of 0.7%.
• Recent coverage has focused on Autoliv as a key player in vehicle safety systems. This helps frame how investors are thinking about its earnings power and resilience. Broader discussions around auto demand and safety regulation are also shaping how the stock is being priced.
• Autoliv currently has a valuation score of 5 out of 6. The next sections will compare different valuation approaches to that score and then provide a framework that aims to give you an even clearer picture of what the stock could be worth.

Approach 1: Autoliv Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today’s value to estimate what the entire business could be worth right now.

For Autoliv, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $476.2 million, and analysts have provided detailed estimates out to 2030, with Simply Wall St extrapolating beyond the initial analyst window. For example, projected Free Cash Flow for 2030 is $771.8 million, with intermediate yearly projections between 2026 and 2035 ranging from about $732.6 million to $859.7 million before discounting.

When these projected cash flows are discounted back to today, the resulting intrinsic value for Autoliv is estimated at about $173.80 per share. Compared with the recent share price of $121.25, the DCF output suggests the stock is 30.2% undervalued based on these assumptions and projections.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Autoliv is undervalued by 30.2%. Track this in your watchlist or portfolio, or discover 44 more high quality undervalued stocks.

Approach 2: Autoliv Price vs Earnings

For profitable companies, the P/E ratio is a useful way to link what you pay for the stock to the earnings the business is currently generating. It gives a quick sense of how many dollars investors are willing to pay for each dollar of earnings.

What counts as a “normal” or “fair” P/E depends on expectations for future earnings and the perceived risk. Higher growth and lower risk usually justify a higher multiple, while slower growth or higher risk tend to pull it down.

Autoliv currently trades on a P/E of 12.80x. That sits below the Auto Components industry average of 19.92x and the selected peer group average of 23.23x. Simply Wall St also calculates a Fair Ratio of 14.85x for Autoliv, which is the P/E level suggested by factors such as its earnings growth profile, profit margins, market value, risk characteristics and industry.

This Fair Ratio is more tailored than a simple comparison with industry or peers, because it adjusts for company specific traits rather than assuming all stocks in the group deserve similar pricing.

With Autoliv’s current P/E of 12.80x below the Fair Ratio of 14.85x, the multiple-based view points to the stock being undervalued on earnings.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Autoliv Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives take the story you believe about Autoliv, link it to your assumptions for revenue, earnings and margins, translate that into a financial forecast and fair value, then compare that fair value with the current share price to help you decide whether to act. This is all done within an easy to use tool on Simply Wall St’s Community page that updates as fresh information comes in, such as the analyst consensus fair value of US$132.18, the highest target of US$150.00 or the lowest target of US$110.00. Two investors can look at the same company, one focusing on motorcycle airbag products and emerging market growth and leaning toward the higher fair value, the other focusing on tariffs, vehicle production risks and pricing pressure and leaning toward the lower fair value. Each can see instantly how their chosen Narrative lines up against the live market price.

Do you think there's more to the story for Autoliv? Head over to our Community to see what others are saying!

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.