Long-established in the Aerospace & Defense industry, Howmet Aerospace Inc (HWM, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 1.31%, juxtaposed with a three-month change of -0.65%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Howmet Aerospace Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 6/10
- Growth rank: 2/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Based on the above method, GuruFocus assigned Howmet Aerospace Inc the GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding Howmet Aerospace Inc Business
Howmet Aerospace Inc, with a market cap of $19.8 billion, is a major player in the Aerospace & Defense industry. The company generates sales of $6.42 billion with an operating margin of 17.86%. Howmet Aerospace Inc produces products that are primarily used in aerospace, commercial transportation, and industrial markets. The company offers innovative solutions through differentiated products such as airfoils with advanced cooling and coatings for extreme temperature applications, specially designed fasteners for lightweight composite airframe construction, reduced assembly costs, and lightning strike protection and lightweight aluminum commercial wheels. It operates through four reportable segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels.
Financial Strength Breakdown
Howmet Aerospace Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The company's low cash-to-debt ratio at 0.11 indicates a struggle in handling existing debt levels.
Growth Prospects
A lack of significant growth is another area where Howmet Aerospace Inc seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -4.3 per year over the past three years, which underperforms worse than 70.19% of 265 companies in the Aerospace & Defense industry. Stagnating revenues may pose concerns in a fast-evolving market.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While Howmet Aerospace Inc has a strong reputation in the Aerospace & Defense industry, its current financial indicators and growth prospects suggest that it may struggle to maintain its historical performance. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
