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what it is
BorgWarner sells the parts that make gas, hybrid, and electric vehicles move, breathe, and waste less energy.
how it gets paid
Last year Borgwarner made $14.3B in revenue. turbochargers was the main engine at $4.1B, or 29% of sales.
why it's growing
Revenue grew 1.6% last year. Fourth-quarter 2025 revenue was $3.572B, up 4% vs. prior year and more than $115M above the internal estimate.
what just happened
BorgWarner's latest quarter was a clean beat, with EPS at $1.35 versus a $1.14 estimate.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
75/100 earnings predictability — reasonably predictable
11.8x trailing p/e — the market's not buying it — or you found a deal
1.2% dividend yield — cash in your pocket every quarter
15.0% return on capital — nothing to write home about
xvary composite: 61/100 — average
What they do
BorgWarner sells the parts that make gas, hybrid, and electric vehicles move, breathe, and waste less energy.
BorgWarner wins because carmakers need parts that already work at scale, not science projects. Volkswagen was 13% of 2025 sales and Ford was 12%, which tells you the company is embedded deep inside global vehicle programs. Return on capital was 15.0% in the base data, which means each dollar put into the business produced $0.15 in operating returns.
How they make money
$14.3B
annual revenue · their business grew +1.6% last year
turbochargers
$4.1B
+1.0%
drivetrain and morse systems
$3.4B
+3.0%
friction and clutch products
$2.9B
0.0%
powerdrive systems
$2.3B
+6.0%
battery modules and eboosters
$1.6B
+8.0%
The products that matter
turbo and emissions hardware
Combustion systems
part of a $14.3B revenue base
this is the legacy cash engine. The snapshot does not break out exact segment dollars, which matters because you need to know how much of today's profit still rides on combustion vehicle volumes.
legacy profit pool
motors, inverters, and electronics
Electric drive components
the transition bet
BorgWarner is trying to sell into both the old drivetrain world and the next one. With revenue up only 1.6% last year, you still need cleaner proof that EV content is big enough to move the whole company.
where the rerating lives
transmission, drivetrain, and thermal parts
Vehicle systems
margin support
This broad hardware set helps BorgWarner stay relevant across hybrid and conventional platforms. That matters when you are defending a 16.0% operating margin in a business the market still values at 11.8x earnings.
platform exposure
Key numbers
11.8x
earnings multiple
Price-to-earnings ratio → stock price divided by yearly profit → you are paying $11.80 for each $1 of annual earnings.
15.0%
return on capital
Return on capital → profit generated from money invested in the business → 15 cents back for each dollar employed is solid for an auto supplier.
$3.9B
long-term debt
Long-term debt → money owed beyond one year → it is real but sits at 24% of capital, which is manageable if auto demand holds.
1.2%
dividend yield
Dividend yield → cash paid to shareholders as a percentage of the stock price → this is a bonus, not the main reason you own it.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 60 / 100
- long-term debt $3.9B (24% of capital)
- net profit margin 8.6% — keeps 9 cents of every dollar in revenue
- return on equity 23% — $0.23 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in BWA 3 years ago → it's now worth $13,850.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
BorgWarner's latest quarter was a clean beat, with EPS at $1.35 versus a $1.14 estimate.
Fourth-quarter 2025 revenue was $3.572B, up 4% vs. prior year and more than $115M above the internal estimate. Management said gains came from PowerDrive Systems and Drivetrain & Morse Systems, while organic sales rose 1% excluding currency moves.
$3.57B
revenue
$1.35
eps
18.1%
gross margin
the number that mattered
The key number was the 18.42% earnings beat, because a cheap stock only rerates when management proves estimates were too low.
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borgwarner finished 2025 with stronger-than-expected results.
-
fourth-quarter revenues of $3.572 billion were more than $115 million higher than our estimate and increased 4% compared to the previous-year tally.
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excluding the impact of foreign exchange rates, organic sales rose 1%.
-
the advance was driven by gains at the powerdrive systems and drivetrain & morse systems divisions.
-
gains there more than offset lower volumes at the turbos & thermal technologies and battery & charging systems segments.
source: company earnings report, 2026
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What could go wrong
the #1 risk is China exposure during an uneven vehicle transition.
high
roughly 20% of sales are tied to China
That is the cleanest hard number in the risk set. On a $14.3B revenue base, it implies about $2.9B sits in one market facing policy, trade, and demand swings.
If China weakens or trade friction rises, the revenue hit is large enough to matter immediately.
med
the product mix can move faster than supplier planning
BorgWarner serves combustion, hybrid, and electric platforms. That helps coverage. It also raises the odds that capital gets spread across too many futures at once.
The page does not break out how much profit comes from legacy versus EV lines. That missing detail is a risk, not a footnote.
med
1.6% revenue growth does not leave much room for a vehicle production slump
This is still an auto supplier. When build rates soften, fixed costs do not volunteer to leave. BorgWarner's 16.0% operating margin is good, but it also gives you something to lose.
If volumes stall and margin slips, the cheap multiple will not protect you as much as it looks like it should.
med
tax and legal disputes are part of the industrial package
The post-spin-off tax disagreement flagged in October 2025 is a reminder that multinational supplier structures create non-operating headaches too.
Not thesis-breaking on its own. Still, it is the kind of issue that drains management attention and cash at the wrong time.
roughly 20% of sales implies about $2.9B of the $14.3B revenue base sits in one geopolitical bucket before you even get to product-transition and auto-cycle risk.
source: institutional data · regulatory filings · risk analysis
Pay attention to
margin
16.0% operating margin
This is the number that lets 11.8x earnings look cheap instead of deserved. If margin fades while revenue stays near +1.6%, the rerating case gets thin fast.
china
roughly 20% of sales tied to one market
You do not need a full-blown crisis for this to matter. A softer China production backdrop alone would be enough to pressure sentiment.
earnings
next earnings report
You are listening for two things: whether revenue growth improves from 1.6% and whether management defends margin without using vague transition language.
targets
the gap between today's $14.3B and the $18B 2029 revenue view
That is the promised slope of the story. If the climb does not start showing up in reported numbers, the long-range target becomes decoration.
Analyst rankings
earnings predictability
75 / 100
management tends to land close to expectations. in human-speak, this usually is not a chaos stock.
balance sheet grade
B++
above average balance-sheet quality. Good enough to handle a slowdown, not strong enough to ignore one.
risk rank
3
safer than about half the market. That is middle-lane risk, which fits an auto supplier more than a defensive compounder.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 252 buyers vs. 224 sellers in 4q2025. total institutional holdings: 0.2B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$30
$71
$58
current price
$51
target midpoint · 12% from current · 3-5yr high: $95 (+65% · 14% ann'l return)
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