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1. Company Snapshot

1.a. Company Description

Motorcar Parts of America, Inc.manufactures, remanufactures, and distributes heavy-duty truck, industrial, marine, and agricultural application replacement parts.The company offers rotating electrical products, including alternators and starters; wheel hub assemblies and bearings; and brake-related products comprising brake calipers, brake boosters, brake rotors, brake pads, and brake master cylinders.


It also offers test solutions and diagnostic equipment for electric vehicle powertrain development and manufacturing, including electric motor test systems, e-axle test systems, advanced power emulators, and charging unit test systems, as well as test systems for alternators, starters, belt starter generator, and bench-top testers, as well as turbochargers and test services for electric vehicle inverters.The company sells its products to automotive retail chain stores and warehouse distributors, as well as various automobile manufacturers for their aftermarket programs and warranty replacement programs in North America.Motorcar Parts of America, Inc.


was founded in 1968 and is headquartered in Torrance, California.

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1.b. Last Insights on MPAA

The recent 3-month performance of Motorcar Parts of America, Inc. was driven by several positive factors. The company reported strong fiscal year results, with record net sales and gross profit, and generated significant cash from operating activities. Additionally, Motorcar Parts of America was added to the broad-market Russell 3000 index, a prestigious recognition of its market capitalization and performance. The company's recent earnings release highlighted its ability to navigate the challenging market conditions, with a solid Q4 performance. Furthermore, Motorcar Parts of America's participation in the 25th Annual Oppenheimer Consumer Conference demonstrates its commitment to investor engagement and transparency.

1.c. Company Highlights

2. Motorcar Parts of America Beats Expectations with Strong Q2 Results

Motorcar Parts of America, Inc. reported its fiscal 2026 second-quarter results, with net sales increasing 6.4% to $221.5 million, driven by organic growth. Gross profit rose 3.5% to a record $42.7 million, and gross margin was 19.3%. Operating income increased 30.8% to $16.4 million. The company generated $21.9 million in operating cash flow and reduced net bank debt by $17.7 million to $56.7 million. EPS came in at $0.17, below analyst estimates of $0.36.

Publication Date: Nov -29

📋 Highlights
  • Net Sales Growth:: Increased 6.4% to $221.5 million, driven by organic growth in fiscal 2026 Q2.
  • Gross Profit Record:: Reached $42.7 million (19.3% margin), up 3.5% year-over-year.
  • Operating Income Surge:: Rose 30.8% to $16.4 million, reflecting strong margin expansion.
  • Cash Flow & Debt Reduction:: Generated $21.9 million in operating cash flow and reduced net bank debt by $17.7 million to $56.7 million.
  • EBITDA Strength:: 12-month EBITDA of $73.9 million, with adjusted EBITDA (excluding noncash expenses) at $95.5 million.

Operational Highlights

The company's performance is driven by strengths in brake-related business, heavy-duty market, and diagnostic business. Management highlighted a strong financial position and growth opportunities. The average age of U.S. light vehicles rose to 12.8 years, and the number of vehicles on the road increased to 293.5 million, driving demand for aftermarket parts. Excluding revenue deferrals, core revenue meets annual guidance expectations.

Cash Flow Generation and Debt Reduction

Trailing 12-month free cash flow is approximately $70 million, and the company plans to continue buying back shares, given the current stock price undervaluation. Debt levels are low and expected to decrease further. The company prioritizes liquidity to capitalize on market opportunities, with a 'Free Cash Flow Yield' of 27.93%.

Valuation and Outlook

The stock trades at a 'P/E Ratio' of 103.68, indicating a potentially overvalued stock. However, the 'P/S Ratio' is 0.33, and 'EV/EBITDA' is 4.81, suggesting a reasonable valuation. Analysts estimate next year's revenue growth at 8.6%. The company remains bullish about its outlook, focusing on efficiency improvements, growing market share, and leveraging its global platform.

Share Repurchase and Strategic Priorities

The company repurchased 287,910 shares for $3.4 million at an average price of $11.65. Strategic priorities include growing sales, improving margins, and increasing cash conversion. The company is committed to enhancing shareholder value, with a strong leadership position in the industry.

3. NewsRoom

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Motorcar Parts of America, Inc. (MPAA) Q2 2026 Earnings Call Transcript

Nov -10

Source: seekingalpha.com

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Motorcar Parts of America Reports Strong Fiscal Second Quarter Results

Nov -10

Source: businesswire.com

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Motorcar Parts of America to Report Fiscal 2026 Second Quarter Results; Host Conference Call

Nov -03

Source: businesswire.com

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Motorcar Parts of America to Present at Gabelli Funds 49th Annual Automotive Aftermarket Symposium

Oct -15

Source: businesswire.com

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Motorcar Parts of America, Inc. (MPAA) Q1 2026 Earnings Call Transcript

Aug -11

Source: seekingalpha.com

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Motorcar Parts of America Reports Fiscal First Quarter Results

Aug -11

Source: businesswire.com

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Best Value Stocks to Buy for August 11th

Aug -11

Source: zacks.com

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Motorcar Parts of America to Report Fiscal 2026 First Quarter Results; Host Conference Call

Aug -04

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.57%)

6. Segments

Hard Parts

Expected Growth: 5.5%

The 5.5% growth of Hard Parts from Motorcar Parts of America, Inc. is driven by increasing demand for high-quality replacement parts, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on e-commerce and digital marketing has improved customer engagement, leading to higher sales. Furthermore, the growing average age of vehicles on the road has increased the need for replacement parts, contributing to the segment's growth.

All Other

Expected Growth: 6.5%

The 6.5% growth in All Other segment of Motorcar Parts of America, Inc. is driven by increasing demand for remanufactured automotive products, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on product diversification, operational efficiency, and cost savings initiatives have contributed to this growth.

7. Detailed Products

Rotating Electrical

Alternators, starters, and other rotating electrical components for vehicles

Brake Products

Brake pads, rotors, drums, and other brake system components for vehicles

Belts and Hoses

Serpentine belts, timing belts, and engine hoses for vehicles

Wheel Hub Assemblies

Pre-assembled wheel hub assemblies for vehicles

Steering and Suspension

Steering and suspension components, including tie rod ends, ball joints, and control arms

Filtron

Air, oil, and fuel filters for vehicles

8. Motorcar Parts of America, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Motorcar Parts of America, Inc. is medium due to the availability of alternative products and services in the automotive aftermarket industry.

Bargaining Power Of Customers

The bargaining power of customers for Motorcar Parts of America, Inc. is low due to the company's strong brand reputation and wide distribution network.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Motorcar Parts of America, Inc. is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants for Motorcar Parts of America, Inc. is low due to the high barriers to entry in the automotive aftermarket industry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Motorcar Parts of America, Inc. is high due to the competitive nature of the automotive aftermarket industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.38%
Debt Cost 10.54%
Equity Weight 53.62%
Equity Cost 11.40%
WACC 11.00%
Leverage 86.50%

11. Quality Control: Motorcar Parts of America, Inc. passed 2 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
XPEL

A-Score: 4.6/10

Value: 4.1

Growth: 9.0

Quality: 7.9

Yield: 0.0

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Motorcar Parts of America

A-Score: 4.5/10

Value: 6.5

Growth: 4.8

Quality: 3.7

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Cooper-Standard

A-Score: 4.0/10

Value: 6.7

Growth: 3.2

Quality: 3.5

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Gentherm

A-Score: 3.9/10

Value: 5.2

Growth: 4.9

Quality: 5.2

Yield: 0.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Fox Factory

A-Score: 3.7/10

Value: 8.4

Growth: 5.2

Quality: 3.9

Yield: 0.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Stoneridge

A-Score: 3.2/10

Value: 7.6

Growth: 4.3

Quality: 2.6

Yield: 0.0

Momentum: 2.0

Volatility: 2.7

1-Year Total Return ->

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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

12.9$

Current Price

12.9$

Potential

-0.00%

Expected Cash-Flows