Lear Corporation

LEA

Auto - Parts · Consumer Cyclical

Price

$141.72

-1.94 (-1.35%)

Market Cap

$7.10B

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−11.3% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 60.4M (2021) → 53.6M (2025)

Lear Corporation makes parts that go inside cars and trucks. Its two main businesses are seating — the seats you sit in — and electrical systems, which are the wiring and connectors that carry power and data throughout a vehicle. Lear sells to major automakers like Ford, General Motors, BMW, and Stellantis, making it one of the largest automotive suppliers in the world.

Lear earns revenue by selling these components directly to automakers, typically under long-term supply contracts tied to specific vehicle programs. The company operates in over 38 countries, with major manufacturing in North America, Europe, and Asia, and generates roughly $23 billion in annual revenue. Its deep relationships with automakers and the complexity of its products create some switching costs, but thin margins leave little room for error. The biggest risk is that slower electric vehicle adoption could delay demand for Lear's newer high-voltage electrical systems, which the company is counting on for long-term growth.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+4.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+125.3% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$386M/ year

→ Flat (-3% vs prior year)

1.7% of revenue

Below sector average (4%)

Steady R&D investment year-over-year

Insider Activity

0.5%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

~8 years

$884M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

$884M cash & investments at current burn rate

Growth context

Lear Corporation is growing revenue at 5% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

7.6%

Thin — 7.6% gross margin

Operating Margin

4.5%

Thin — 4.5% operating margin

ROCE

3.2%

Weak — 3.2% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+2.9%

Nearly flat sales (2.9% YoY)

EPS YoY

+17.3%

Earnings growing fast (17.3% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

249%

Turns 249% of profit into real cash

FCF Margin

3.1%

Thin free cash flow (3.1%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.57

Conservative — low debt load (0.57)

Interest Cover

10.24x

Comfortably covers interest (10.2x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

14.0x

Attractive valuation — P/E 14.0

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+6.9

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (14.0 → 7.2)

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Dividends

Dividend Yield

2.23%

Moderate income — 2.23% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+0.0%

Dividend flat

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