GTX

Garrett Motion is a leading maker of turbochargers and related technologies for combustion and hybrid vehicles. The business throws off strong cash: FY2025 revenue grew 3.1% to $3.58B, net income rose 9.9% to $310M (an 8.6% net margin), and operating cash flow was $413M against a light $72M of capex (down 20.9%), implying robust free cash flow. Diluted EPS jumped 20.6% to $1.52 — faster than net income — because the company is aggressively shrinking its share count, buying back $208M of stock and reducing shares outstanding 7.3%, while also paying a new $52M dividend.

The balance sheet headline looks alarming but needs context. Stockholders' equity is negative at -$802M (with -$1.38B of retained earnings), which makes ROE (-38.7%) and liabilities/equity (-3.95x) mathematically meaningless. This negative book equity stems from Garrett's post-bankruptcy/spin capital structure and the large buybacks that have returned capital to shareholders, not from operating losses — the company is solidly profitable and cash-generative, with long-term debt of $1.41B (down 3.6%) and growing cash of $177M. Still, negative equity means there is no book-value cushion, so capital returns must be financed by ongoing cash flow.