Exco Technologies Limited (XTC.TO) | Investment Case

1. Company Snapshot

1.a. Company Description

Exco Technologies Limited, together with its subsidiaries, designs, develops, and manufactures dies, molds, components and assemblies, and consumable equipment for the die-cast, extrusion, and automotive industries.It operates through two segments, Casting and Extrusion, and Automotive Solutions.The Casting and Extrusion segment designs, develops, and manufactures tooling and consumable parts for aluminum die-casting and aluminum extrusion machines.

It has operations in North America, South America, Morocco, and Thailand; and serves automotive and industrial markets worldwide.The Automotive Solutions segment produces automotive interior trim components and assemblies primarily for passenger and light truck vehicles.This segment offers synthetic net and other cargo restraint products, injection-molded components, shift/brake boots, instrument panel components, sun visors, seat covers, head rests, other cut and sew products, and related interior trim components and assemblies.

This segment also supplies plastic trunk trays and organizer systems, floor mats, and bumper covers, as well as die cut leather sets for seating applications.It has operations in Canada, the United States, Europe, Mexico, South America, Asia, and internationally.Exco Technologies Limited was founded in 1952 and is based in Markham, Canada.

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1.b. Last Insights on XTC

Exco Technologies Limited's recent performance was negatively impacted by the withdrawal of its F2026 financial targets due to tariff uncertainty. This uncertainty has created a sense of caution among investors, leading to a decrease in confidence in the company's future prospects. Additionally, the announcement of restructuring charges, which contributed to a lower earnings per share, has also weighed on the company's performance. Furthermore, the company's decision to withdraw its financial targets suggests a lack of clarity on its future growth prospects, which has likely contributed to the negative sentiment surrounding the company.

1.c. Company Highlights

Last Price	7.6
Change Percentage	-3.92%
Open	7.81
Previous Close	7.91
Market Cap ( Millions)	289
Volume	3999
Year High	7.94
Year Low	5.26
M A 50	7.03
M A 200	6.78

FCF Yield	11.04%
Dividend Yield	5.53%
ROE	6.20%
Debt / Equity	26.27%
Net Debt / EBIDTA	116.46%
Price To Book	0.72
Price Earnings Ratio	11.59
Price To FCF	9.06
Price To sales	0.46
EV / EBITDA	5.31

2. Exco Technologies' Q1 Fiscal 2026 Earnings: A Mixed Bag

Exco Technologies Limited reported a solid start to fiscal 2026 with consolidated sales of $149.5 million, a 4% increase from the prior year. Net income rose to $4.8 million, with earnings per share reaching $0.1274, slightly below estimates of $0.21. The actual EPS figure represents a 16% increase from $0.11 a year ago. The company's pretax profit surged 37% to $6.5 million in the Automotive Solutions segment, driven by higher sales and execution in the face of persistent inflation.

Publication Date: Feb -06

                                    📋 Highlights
                                    Consolidated Sales Growth::
                                                Exco achieved $149.5 million in sales for fiscal 2026, a 4% increase from the prior year.
Net Income and EPS Improvement::
                                                Net income rose to $4.8 million, with earnings per share increasing to $0.13 from $0.11 year-over-year.
Automotive Solutions Strength::
                                                The segment grew sales by 10%, driving a 37% surge in pretax profit to $6.5 million amid stable production and favorable vehicle mix.
Casting and Extrusion Recovery::
                                                Sales declined 2% to $70.2 million, but quoting activity and orders improved, with expectations of higher die cast tooling revenues in Q2.
Capital Allocation Shift::
                                                Capital spending reduced to $28 million in fiscal 2026 (from $36 million in 2025), reflecting a focus on harvesting returns from past investments.

                                

Segmental Performance

The Automotive Solutions segment posted a robust 10% sales growth, driven by stable automotive production volumes and a favorable vehicle mix. In contrast, the Casting and Extrusion segment saw sales decline 2% to $70.2 million, impacted by a slowdown in die cast molds. However, quoting activity and orders improved during the quarter, and the company expects die cast tooling revenues to pick up late in Q2 and improve for the remainder of the year.

Capital Allocation and Financial Position

Exco's capital allocation strategy is shifting towards harvesting returns from past investments, with capital spending forecasted at $28 million in fiscal 2026, down from $36 million in fiscal 2025. The company maintains a strong financial position with net debt of $67.1 million and $59.8 million of available liquidity under its credit facility. Management remains confident in the long-term outlook, citing a substantial manufacturing footprint in North America and a push towards reshoring industrial manufacturing.

Growth Opportunities and Valuation

The company sees emerging growth opportunities in AI data centers, which currently account for low single-digit sales but are growing at double-digit rates. Analysts estimate next year's revenue growth at 6.4%. With a P/E Ratio of 11.22 and an EV/EBITDA of 5.18, the stock appears reasonably valued. The Dividend Yield of 5.71% is attractive, indicating a stable return for investors. The company's ROIC of 5.59% suggests that it is generating returns on its investments, albeit at a moderate level.

Outlook

Exco's M&A pipeline is not robust, with a focus on organic growth and harvesting past investments. As the company continues to navigate the challenges of inflation and industry fluctuations, its strong financial position and diversified portfolio are expected to support its long-term growth prospects.

3. NewsRoom

Exco Technologies Limited Announces Normal Course Issuer Bid

Feb -18

Source:

Exco Technologies Q1 Earnings Call Highlights

Jan -30

Source:

Exco Technologies Ltd (EXCOF) Q1 2026 Earnings Call Highlights: Strong Sales Growth Amidst ...

Jan -29

Source:

Exco Technologies Limited Announces Results for First Quarter Ended December 31, 2025

Jan -28

Source:

Exco Technologies Limited 2025 Annual Meeting Results

Jan -22

Source:

Exco Technologies Limited Announces First Quarter Results on January 28, 2026 and Annual General Meeting on January 21, 2026

Jan -19

Source:

Exco Technologies President Acquires 66% More Stock

Dec -21

Source:

Exco Technologies (TSE:XTC) Is Paying Out A Dividend Of CA$0.105

Dec -08

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.94%)

6. Segments

Automotive Solutions

Expected Growth: 4%

Exco Technologies' Automotive Solutions segment growth is driven by increasing demand for electric vehicles, autonomous driving, and advanced safety features. Additionally, the company's focus on lightweighting and sustainability solutions resonates with OEMs' efforts to reduce emissions and improve fuel efficiency. Further, Exco's diversified customer base and expanding presence in emerging markets contribute to its growth momentum.

Casting and Extrusion

Expected Growth: 6%

Exco Technologies' Casting and Extrusion segment growth is driven by increasing demand for lightweight aluminum products in the automotive industry, supported by stringent fuel efficiency regulations. Additionally, growth in the aerospace sector and rising adoption of electric vehicles are contributing to the segment's 6% growth rate.

7. Detailed Products

Automotive Solutions

Exco Technologies Limited provides automotive solutions for interior and exterior components, including instrument panels, door trim, and other interior components.

Industrial Solutions

Exco Technologies Limited offers industrial solutions for various industries, including aerospace, medical, and industrial equipment.

Castings and Forgings

Exco Technologies Limited provides castings and forgings for various industries, including automotive, industrial, and aerospace.

Extrusion Tooling

Exco Technologies Limited designs and manufactures extrusion tooling for the production of aluminum and copper products.

Die-Casting

Exco Technologies Limited provides die-casting solutions for the production of aluminum and zinc parts.

Molded Products

Exco Technologies Limited manufactures molded products, including plastic and rubber components.

8. Exco Technologies Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Exco Technologies Limited is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for Exco Technologies Limited is high due to the concentration of customers in the automotive and industrial markets.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Exco Technologies Limited is low due to the company's large scale of operations and diversified supplier base.

Threat Of New Entrants

The threat of new entrants for Exco Technologies Limited is low due to the high barriers to entry in the industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Exco Technologies Limited is high due to the competitive nature of the industry, with several established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.87%
Debt Cost	9.15%
Equity Weight	76.13%
Equity Cost	9.85%
WACC	9.68%
Leverage	31.36%

11. Quality Control: Exco Technologies Limited passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Exco Technologies

A-Score: 6.8/10

Value: 8.7

Growth: 5.0

Quality: 4.9

Yield: 10.0

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

Douglas Dynamics

A-Score: 6.2/10

Value: 4.8

Growth: 3.7

Quality: 5.0

Yield: 8.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

Standard Motor Products

A-Score: 5.8/10

Value: 6.7

Growth: 3.3

Quality: 4.3

Yield: 6.0

Momentum: 7.5

Volatility: 7.0

1-Year Total Return ->

Strattec Security

A-Score: 5.6/10

Value: 8.3

Growth: 6.6

Quality: 6.1

Yield: 0.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

Martinrea

A-Score: 5.5/10

Value: 9.8

Growth: 4.1

Quality: 3.0

Yield: 3.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

Miller Industries

A-Score: 5.1/10

Value: 7.1

Growth: 6.3

Quality: 5.6

Yield: 4.0

Momentum: 1.0

Volatility: 6.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.31%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.68%

Exco Technologies Limited - CA30150P1099

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on XTC

1.c. Company Highlights

Higher Yield

Less Volatile

Fairly Valued

Earnings Beats

Revenues Beats

Average Growth

Revenues Miss

Cheaper

Earnings Miss

2. Exco Technologies' Q1 Fiscal 2026 Earnings: A Mixed Bag

Segmental Performance

Capital Allocation and Financial Position

Growth Opportunities and Valuation

Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.94%)

6. Segments

Automotive Solutions

Expected Growth: 4%

Casting and Extrusion

Expected Growth: 6%

7. Detailed Products

Automotive Solutions

Industrial Solutions

Castings and Forgings

Extrusion Tooling

Die-Casting

Molded Products

8. Exco Technologies Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Exco Technologies Limited passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.6$

Current Price

7.6$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA