Insights 
VT 
Autoliv, Inc. reported quarterly earnings of $2.32 per share, surpassing the Zacks Consensus Estimate of $2.10 and the previous year’s $1.84 per share. This reflects an earnings surprise of +10.48%.
The company consistently exceeded earnings estimates in the past four quarters, with the last quarter seeing a surprise of +6.76%. For the quarter ending September 2025, Autoliv reported revenues of $2.71 billion, above the Zacks Consensus Estimate by 3.10%, compared to $2.56 billion a year ago.
Since the beginning of the year, Autoliv’s shares have risen about 29.2%, outpacing the S&P 500’s 12.7% gain. Future price movement will rely on management’s forthcoming commentary and earnings projections. The current consensus EPS estimate is $2.92 on $2.7 billion in revenues for the next quarter.
For the current fiscal year, the EPS estimate is $9.32 on $10.64 billion in revenues. XPEL, Inc., also in the Automotive – Original Equipment industry, anticipates reporting quarterly earnings of $0.48 per share, a decrease of 11.1% year-over-year, with expected revenues of $117.01 million, a 3.7% increase from the previous year.
We are looking at a strong performance from Autoliv, which has beaten expectations on both earnings and revenue for the quarter. This positive surprise follows a consistent trend of outperformance over the past year. This pattern suggests underlying strength in their operations and market position.
For derivative traders, the immediate post-earnings period typically sees a drop in implied volatility. This “IV crush” means options are now cheaper, creating a better entry point for new positions. We should assess whether the stock’s next move justifies establishing a position at these lower volatility levels.
The broader market context supports a cautiously optimistic view. Recent data shows that U.S. light vehicle sales for September 2025 reached a seasonally adjusted annual rate of 15.9 million units, a sign of stable consumer demand. However, we must remember the production challenges the industry faced back in 2022 and 2023, which shows how sensitive these companies are to supply chain stability.
Given the stock’s significant 29.2% run-up this year, simply buying call options might be risky. We could instead consider a bull call spread to capitalize on further potential upside while capping our risk and lowering the upfront cost. This strategy benefits from a continued, steady climb rather than a dramatic spike.
Alternatively, the Zacks #3 (Hold) rating suggests the stock may trade sideways or in line with the market. If we believe the good news is already priced in, selling out-of-the-money puts could be a viable strategy. This allows us to collect premium while defining a lower price at which we would be comfortable owning the stock.
The key catalyst now will be management’s guidance on their earnings call, which will influence analyst revisions in the coming days. We should also monitor the upcoming earnings from XPEL, Inc., as its performance will provide another signal about the health of the automotive equipment sector.
