The EV Stock Nobody’s Talking About

For years, investors have treated the auto sector like a binary bet: EV winners or ICE losers.

But what if the real money is in the middle?

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That’s where Garrett Motion (NASDAQ: GTX) comes in.

GTX doesn’t make cars. It makes the critical components that help them run more efficiently: turbochargers, electric compressors, and high-speed electric motors. And right now, the sweet spot in autos isn’t full EVs.

It’s hybrids.

Here’s the story — and why GTX could see double-digit upside in the coming year.

The Hybrid Bridge Is Real

With U.S. EV tax credits rolling off and consumers cooling slightly on fully electric vehicles, hybrids are quietly surging.

Hybrids still rely on:

• Turbocharged internal combustion engines
• Electric compressors for thermal management
• High-efficiency air and fluid systems

That’s GTX’s wheelhouse.

Roughly 50% of vehicles sold globally are expected to have turbochargers, and that penetration continues to climb as emissions standards tighten and automakers downsize engines for fuel efficiency.

Meanwhile, hybrid registrations have been growing at a much faster clip than EVs recently … and hybrids use both electric and combustion components. That means double content opportunity per vehicle for suppliers like Garrett.

This isn’t a bet against EVs. It’s just a bet that the transition will take time … and hybrids are the bridge.

It’s Not Just Turbochargers

GTX has expanded into:

• Electric compressors (used in hybrids, EVs, and even data centers)
• High-speed electric motors
• Thermal management systems

Those adjacent markets are expected to grow at double-digit rates over the next decade.

So instead of being “the old turbo company,” GTX is becoming a broader electrified efficiency supplier.

That’s a big narrative shift.

The Numbers Actually Back It Up

Here’s what makes this interesting:

• Expected 2026 EPS growth: ~18%
• 3–5 year EPS CAGR estimates: ~20%+
• Forward P/E: ~12x

That’s well below most auto suppliers … and well below the broader market.

Margins are improving, too. Operating margin expanded year over year, and management continues to drive cost efficiencies.

In other words:

• Earnings are growing
• Margins are expanding
• The multiple is compressed

That’s usually how you get upside.

The two top wall street analysts who cover the stock also see double digit upside from here on average: 

See all GTX price forecasts here. 

The Risk (Because There Always Is One)

Garrett carries meaningful debt and operates in a cyclical industry. Auto demand softness, customer concentration, or pricing pressure could impact results.

But the company is generating solid free cash flow, which helps offset balance sheet concerns. That’s why GTX is earning an A according to our Financials Component Grade, which weighs free cash flow to return on assets, and more. This is one of our favorite indications for future stock gains.

And unlike pure EV suppliers, Garrett isn’t dependent on one technology direction.

It’s exposed to:

• ICE
• Hybrids
• EV thermal systems
• Emerging applications

That diversification matters.

Why GTX Could Work

Markets love clean narratives.

Right now, the narrative is still either:

• “Buy pure EV” … or:
• “Avoid autos entirely”

Garrett doesn’t fit neatly into either bucket.

That’s why it’s interesting.

If hybrids continue gaining traction (and if turbo penetration keeps rising globally) GTX sits in a very profitable middle ground.

At ~12x forward earnings with high-teens EPS growth, this looks like a classic “bridge trade” the market hasn’t fully priced yet. 

Click here to add GTX to your watchlist.

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