Is MGA a good stock to buy? We came across a bullish thesis on Magna International Inc. on r/ValueInvesting by cameronreilly. In this article, we will summarize the bulls’ thesis on MGA. Magna International Inc.’s share was trading at $66.12 as of May 28th. MGA’s trailing and forward P/E were 28.00 and 9.75 respectively according to Yahoo Finance.
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Magna International (NYSE:MGA) is presented as a high-quality global automotive supplier undergoing a cyclical and structural reset that has created a mispricing opportunity despite its scale, diversification, and entrenched industry position. The company operates as a “mobility technology” supplier with exposure across nearly every major vehicle system, effectively meaning it contributes components to a large share of vehicles on global roads.
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Its business is organized into four segments: body exteriors and structures, power and vision, seating systems, and complete vehicle manufacturing, giving it end-to-end exposure to both traditional and next-generation automotive platforms. The body systems division generates roughly $16–17 billion annually, while power and vision, increasingly tied to EV and autonomous content such as cameras, e-drives, and driver assistance systems, is showing improving margins, rising from 3.4% to 6.5%, signaling early operational recovery.
Seating has returned to profitability after prior losses, and the complete vehicle segment provides niche OEM outsourcing exposure for low-volume models. Despite this breadth, the stock has been heavily de-rated due to a multi-year reset in EV expectations, large write-downs exceeding $1 billion tied to EV investments and lighting assets, and tariff-related uncertainty impacting North American production chains. These pressures pushed the stock from nearly $100 in 2021 to lows near $33 in April 2025, reflecting peak pessimism.
However, recent developments including asset divestitures, margin repair, and improving segment performance suggest a turning inflection under CEO Swami Kotagiri’s restructuring efforts. At the same time, Magna’s valuation appears compressed, with a price-to-operating cash flow multiple of just 4.22 despite $40+ billion in annual revenue, long-term OEM relationships, and global manufacturing integration.
This creates a bullish setup where normalization of EV investments, resolution of tariff overhangs, and operational simplification could drive meaningful rerating. If execution continues and sentiment stabilizes, Magna offers significant upside potential as a re-rated industrial platform embedded deeply in global automotive supply chains, with recovery in margins and cash flows likely to drive multiple expansion from deeply depressed levels.
Previously, we covered a bullish thesis on Gentex Corporation (GNTX) by The Antifragile Investor in January 2025, which highlighted its dominance in electrochromic mirrors, diversification into aviation and smart-home technologies, and steady EPS growth supported by global OEM partnerships. GNTX’s stock price has depreciated by approximately 13.06% since our coverage. Cameronreilly shares a similar view but emphasizes Magna International’s cyclical reset and valuation-driven rerating opportunity.
Magna International Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held MGA at the end of the first quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of MGA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MGA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
