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1. Company Snapshot

1.a. Company Description

Methode Electronics, Inc.designs, engineers, and produces mechatronic products worldwide.It operates through four segments: Automotive, Industrial, Interface, and Medical.


The Automotive segment supplies electronic and electro-mechanical devices, and related products to automobile original equipment manufacturers directly or through their tiered suppliers.Its products include integrated center consoles, hidden switches, ergonomic switches, transmission lead-frames, and LED-based lighting and sensors, which incorporate magneto-elastic sensing and other technologies that monitor the operation or status of a component or system.The Industrial segment manufactures lighting solutions; industrial safety radio remote controls; braided flexible cables; current-carrying laminated busbars and devices; custom power-product assemblies, such as PowerRail solution; high-current low-voltage flexible power cabling systems; and powder-coated busbars that are used in various markets and applications comprising aerospace, cloud computing, commercial vehicles, industrial, military, power conversion, and transportation.


The Interface segment provides various copper-based transceivers and related accessories for the cloud computing hardware equipment and telecommunications broadband equipment markets; user interface solutions for the appliance, commercial food service, and point-of-sale equipment markets; and fluid-level sensors for the marine/recreational vehicle and sump pump markets.The Medical segment offers Dabir Surfaces, a surface support technology aimed at pressure injury prevention for use by patients who are immobilized or otherwise at risk for pressure injuries, including patients undergoing long-duration surgical procedures.Methode Electronics, Inc.


was incorporated in 1946 and is headquartered in Chicago, Illinois.

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1.b. Last Insights on MEI

Methode Electronics' recent performance was driven by the company's strategic review and evaluation of potential alternatives, including out-licensing opportunities and merger and acquisition possibilities. The company's consideration of these options suggests a proactive approach to maximizing the value of its assets for shareholders. Additionally, the announcement of the fourth quarter and full year fiscal 2025 results on July 9, 2025, indicates a forthcoming update on the company's financial performance, which may provide further insights into its current situation.

1.c. Company Highlights

2. Methode Electronics' Q1 2026 Earnings: A Mixed Bag

Methode Electronics reported Q1 2026 sales of $240.5M, down 7% YoY, with adjusted income from operations of $2M, a significant improvement from the previous year's $6.7M loss. Adjusted EBITDA was $15.7M, up $5.9M YoY. EPS came in at -$0.22, slightly worse than the estimated -$0.21. The company's free cash flow was $18M, marking the third consecutive quarter of positive free cash flow, and net debt reduction stood at $41M over three quarters.

Publication Date: Sep -28

📋 Highlights
  • Revenue Decline: Q1 sales fell 7% year-over-year to $240.5M, driven by EV demand volatility and program transitions.
  • EBITDA Growth: Adjusted EBITDA rose 61% to $15.7M (+$5.9M YoY), reflecting operational efficiency and margin expansion.
  • Free Cash Flow: Generated $18M in free cash flow for the third consecutive quarter, reducing net debt to $202.3M (-41M YoY).
  • Power Solutions Momentum: CAGR of 30% over three years in Power Solutions, fueled by data center, EV, and defense sectors.
  • Guidance: FY2025 sales projected at $900M–$1B, with EBITDA doubling to $70M–$80M despite $100M EV sales decline.

Segment Performance

The Power Solutions segment was a highlight, achieving a 30% CAGR in sales over three years driven by data center, EV, and defense applications. EV sales were $220M in FY2025, accounting for 20% of revenue, with a regional split of 55% EMEA, 16% Asia, and 30% North America. Data center busbar sales are expected to grow with new construction and higher voltage adoption.

Restructuring and Cost Savings

Methode has made significant progress in restructuring, including leadership changes, headquarters consolidation, and 500 headcount reductions globally, driving EBITDA growth. The company expects these efforts to continue yielding benefits.

Outlook and Valuation

Guidance for FY2026 remains intact, with expected sales of $900M-$1B and EBITDA of $70M-$80M, doubling 2025 levels. The current valuation metrics indicate a 'P/E Ratio' of -4.94, 'P/S Ratio' of 0.26, and 'EV/EBITDA' of 40.17. The 'Free Cash Flow Yield' is 14.2%, suggesting a potentially attractive return for investors. However, the high 'Net Debt / EBITDA' ratio of 18.41 raises concerns about the company's leverage.

3. NewsRoom

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Why Methode Electronics Stock Plunged Today

Dec -04

Source: fool.com

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Methode Electronics, Inc. (MEI) Q2 2026 Earnings Call Transcript

Dec -04

Source: seekingalpha.com

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Methode Electronics, Inc. Reports Fiscal 2026 Second Quarter Financial Results

Dec -03

Source: globenewswire.com

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Methode Electronics Announces Second Quarter Fiscal 2026 Results Conference Call

Nov -26

Source: globenewswire.com

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Bailard Inc. Makes New $488,000 Investment in Methode Electronics, Inc. $MEI

Nov -15

Source: defenseworld.net

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Methode Electronics to Present at the Baird 2025 Global Industrial Conference

Nov -06

Source: globenewswire.com

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Notice to All Long Term Shareholders of Methode Electronics, Inc: Johnson Fistel Continues Investigation On Behalf of Your Claims

Nov -06

Source: newsfilecorp.com

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Notice to All Long Term Shareholders of Methode Electronics, Inc: Johnson Fistel Continues Investigation On Behalf of Your Claims

Nov -04

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.24%)

6. Segments

Automotive

Expected Growth: 8.3%

Methode Electronics' 8.3% growth in Automotive segment is driven by increasing demand for electric vehicles, autonomous driving, and advanced safety features. OEMs' focus on electrification, connectivity, and autonomous technologies is fueling growth. Additionally, Methode's innovative solutions in areas like battery management, power distribution, and sensor integration are well-positioned to capitalize on these trends.

Industrial

Expected Growth: 8.28%

Methode Electronics' Industrial segment growth of 8.28% is driven by increasing demand for electric vehicles, rising adoption of Industry 4.0 technologies, and growing need for energy storage solutions. Additionally, the company's diversified customer base, innovative product offerings, and strategic acquisitions have contributed to its growth momentum.

Interface

Expected Growth: 8.5%

Methode Electronics' Interface segment growth of 8.5% is driven by increasing demand for electric vehicles, rising adoption of advanced driver-assistance systems (ADAS), and growing need for high-speed connectivity solutions in the automotive and industrial markets.

Eliminations/Corporate

Expected Growth: 4.83%

Methode Electronics' Eliminations/Corporate segment growth of 4.83% is driven by strategic cost savings initiatives, operational efficiencies, and effective working capital management. Additionally, the company's focus on optimizing its global footprint and streamlining operations has contributed to the segment's growth.

Medical

Expected Growth: 8.5%

Methode Electronics' Medical segment growth of 8.5% is driven by increasing demand for medical devices, expansion into emerging markets, and strategic partnerships. Additionally, the company's focus on innovative product development, such as wireless patient monitoring systems and portable defibrillators, is contributing to its growth.

7. Detailed Products

Busbars

Customizable, high-power busbars for electrical power distribution and circuit protection in various industries

Cable Assemblies

Custom-designed cable assemblies for various industries, including automotive, aerospace, and industrial

Fuses

High-reliability fuses for overcurrent protection in various industries, including automotive, aerospace, and industrial

Magnetic Products

Custom-designed magnetic products, including inductors, transformers, and chokes, for various industries

Power Distribution Modules

Customizable power distribution modules for electrical power distribution and circuit protection in various industries

Radio Frequency (RF) Components

Custom-designed RF components, including antennas, filters, and switches, for various industries

Sensor Products

Custom-designed sensor products, including temperature, pressure, and position sensors, for various industries

8. Methode Electronics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Methode Electronics, Inc. faces moderate threat from substitutes due to the presence of alternative technologies and products in the market.

Bargaining Power Of Customers

Customers have limited bargaining power due to the specialized nature of Methode Electronics, Inc.'s products and services.

Bargaining Power Of Suppliers

Suppliers have moderate bargaining power due to the presence of multiple suppliers in the market, but Methode Electronics, Inc.'s large scale of operations gives it some negotiating power.

Threat Of New Entrants

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

Intensity Of Rivalry

The industry is highly competitive, with multiple players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.26%
Debt Cost 3.95%
Equity Weight 73.74%
Equity Cost 8.10%
WACC 7.01%
Leverage 35.61%

11. Quality Control: Methode Electronics, Inc. passed 3 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

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M-tron

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Value: 3.2

Growth: 9.0

Quality: 7.8

Yield: 0.0

Momentum: 6.0

Volatility: 2.7

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Ouster

A-Score: 4.5/10

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Growth: 5.3

Quality: 4.5

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Momentum: 10.0

Volatility: 0.7

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Allient

A-Score: 4.2/10

Value: 2.7

Growth: 4.0

Quality: 4.3

Yield: 0.0

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A-Score: 4.0/10

Value: 3.9

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Quality: 4.8

Yield: 4.0

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Volatility: 4.0

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Methode Electronics

A-Score: 3.6/10

Value: 7.5

Growth: 1.6

Quality: 2.7

Yield: 7.0

Momentum: 1.0

Volatility: 2.0

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A-Score: 2.9/10

Value: 6.0

Growth: 4.6

Quality: 3.8

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.99$

Current Price

6.99$

Potential

-0.00%

Expected Cash-Flows