Download PDF

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.

Show Full description

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 Q3: Transformation in Motion

In fiscal 2026’s third quarter, Methode Electronics posted net sales of $233.7 million, a 3% decline from the same period last year, while adjusted EBITDA fell $5 million to $7.3 million. Gross profit slid to $38.8 million from $41.3 million, reflecting softer volumes in automotive and interface segments. The company’s earnings per share dipped to –$0.37 against analysts’ estimate of –$0.26, underscoring margin pressure. Staff noted that the firm expects positive free cash flow in Q4 and for the full year, bolstered by a $10 million free cash flow in the quarter and $17 million year‑to‑date. Valuation metrics reflect the strain, with a P/E of –3.8 and an EV/EBITDA of 12.1, indicating the market’s skepticism about near‑term profitability.

Publication Date: Apr -13

📋 Highlights
  • Decline in Net Sales:: Third-quarter net sales fell 3% to $233.7 million, driven by lower automotive and interface segment volumes, despite a 9.5% Industrial segment growth from off-road lighting and data center power solutions.
  • Adjusted EBITDA Drop:: Adjusted EBITDA declined $5 million YoY to $7.3 million, reflecting gross profit contraction ($38.8M vs. $41.3M) and operational inefficiencies in underperforming segments.
  • Free Cash Flow Resilience:: $10 million in Q3 free cash flow and $17 million year-to-date, supported by cost optimization and asset sales like the $18 million revenue-generating Dataamate business exit.
  • Revised Guidance:: Net sales outlook narrowed to $950M–$1B, with adjusted EBITDA guidance cut to $58M–$62M, citing portfolio refinement and operational discipline as growth enablers amid strategic realignment.
  • Data Center Momentum:: Q4 data center segment run rate surged to $120 million, offsetting flat YoY performance earlier due to VMI implementation gaps, signaling medium-term 50% growth potential from power solutions.

Industrial Segment Growth

The Industrial division drove a 9.5% year‑over‑year sales increase, buoyed by off‑road lighting and power distribution solutions for data centers, offsetting declines in automotive and interface sales.

Data Center Strategy

Data center revenue remained flat at $15‑18 million, prompting a review of the business. The company reported a Q4 run rate of $120 million, supported by EDI, but a 6‑to‑8‑week revenue gap due to vendor‑managed inventory implementation tempered growth.

Portfolio Refinement

Methode’s transformation agenda includes portfolio pruning, exemplified by the sale of the Dataamate unit, which generated $18 million in revenue and $3 million in profit, freeing capital for higher‑growth power solutions.

EV Market Challenges

North American EV programs faced delays and cancellations, notably with Stellantis, while growth in Egypt and steady China performance helped keep take rates on track outside the U.S.

Capital Allocation & Free Cash Flow

Capital expenditures remained modest, with $42 million spent in FY ’25 and 16.5% in the current year, enabling a $10 million free cash flow in Q3 and supporting the company’s aim for positive cash flow in Q4.

Guidance and Outlook

The firm narrowed net sales guidance to $950 million‑$1 billion and adjusted EBITDA outlook to $58 million‑$62 million, reflecting a cautious stance amid ongoing portfolio adjustments and a 50% medium‑term growth target based on an $80‑$85 million base.

3. NewsRoom

Card image cap

Methode Electronics to Present at the Virtual Oppenheimer Industrial Growth Conference

May -01

Source: globenewswire.com

Card image cap

Methode Electronics to Present at the Virtual Oppenheimer Industrial Growth Conference

May -01

Source: globenewswire.com

Card image cap

Methode Electronics Appoints Industry Veteran Arnie Jensen to the Executive Leadership Team Overseeing Global Operations

Apr -29

Source: globenewswire.com

Card image cap

Methode Electronics (NYSE:MEI) Stock Price Passes Above 200 Day Moving Average – Here’s What Happened

Apr -25

Source: defenseworld.net

Card image cap

JPMorgan Chase & Co. Has $2.20 Million Holdings in Methode Electronics, Inc. $MEI

Apr -07

Source: defenseworld.net

Card image cap

Methode Electronics, Inc. (NYSE:MEI) Short Interest Update

Mar -30

Source: defenseworld.net

Card image cap

Methode Electronics' Board Approves Dividend

Mar -18

Source: globenewswire.com

Card image cap

Methode Electronics, Inc. (MEI) Q3 2026 Earnings Call Transcript

Mar -06

Source: seekingalpha.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

Stock-Card
Ouster

A-Score: 4.4/10

Value: 6.4

Growth: 5.2

Quality: 4.7

Yield: 0.0

Momentum: 9.5

Volatility: 0.7

1-Year Total Return ->

View Full Report
Stock-Card
Allient

A-Score: 4.2/10

Value: 2.9

Growth: 4.0

Quality: 4.5

Yield: 0.0

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
Richardson Electronics

A-Score: 4.2/10

Value: 4.3

Growth: 5.9

Quality: 4.8

Yield: 4.0

Momentum: 2.0

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
M-tron

A-Score: 4.1/10

Value: 3.4

Growth: 9.0

Quality: 7.8

Yield: 0.0

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Methode Electronics

A-Score: 3.9/10

Value: 8.2

Growth: 1.6

Quality: 2.9

Yield: 7.0

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Research Frontiers

A-Score: 3.4/10

Value: 6.0

Growth: 4.6

Quality: 4.1

Yield: 0.0

Momentum: 3.5

Volatility: 2.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.64$

Current Price

9.64$

Potential

-0.00%

Expected Cash-Flows