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1. Company Snapshot

1.a. Company Description

Stoneridge, Inc., together with its subsidiaries, designs and manufactures engineered electrical and electronic components, modules, and systems for the automotive, commercial, off-highway, motorcycle, and agricultural vehicle markets in North America, South America, Europe, and internationally.It operates in three segments: Control Devices, Electronics, and Stoneridge Brazil.The Control Devices segment offers sensors, switches, actuators, and connectors that monitor, measure, or activate specific functions within a vehicle.


The Electronics segment designs and manufactures driver information systems, camera-based vision systems, connectivity, and compliance products.Its products collect, store, and display vehicle information, such as speed, pressure, maintenance data, trip information, operator performance, temperature, distance traveled, and driver messages related to vehicle performance.This segment's electronic control units regulate, coordinate, monitor, and direct the operation of the electrical system within a vehicle.


The Stoneridge Brazil segment designs, manufactures, and sells vehicle tracking devices and monitoring services; vehicle security alarms and convenience accessories; in-vehicle audio and infotainment devices; and telematics solutions.It provides its products and systems to various original equipment manufacturers and Tier 1 customers, as well as aftermarket distributors and mass merchandisers for use in various vehicle platforms.Stoneridge, Inc.


was founded in 1965 and is headquartered in Novi, Michigan.

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1.b. Last Insights on SRI

Stoneridge, Inc.'s recent performance was negatively impacted by an operating loss of $(3.3) million and a net loss of $(9.4) million in Q3 2025. Despite announcing new program awards, including MirrorEye OEM and Leak Detection Module, the company's financials showed weakness. Adjusted EBITDA, excluding non-operating FX expense, was $11.7 million, or 5.6% of sales, marking a 200 basis point improvement vs. Q2 2025. The company faces challenges, but growth prospects and contract wins support potential.

1.c. Company Highlights

2. Stoneridge Delivers Strong Q2 Performance Amidst Market Headwinds

Stoneridge reported impressive second-quarter 2025 results, with sales reaching $228 million, propelled by a 21% surge in MirrorEye sales compared to the previous quarter. This growth was fueled by several factors, including the ramp-up of new OEM programs, strong OEM take rates, and continued momentum in the retrofit and bus markets. Despite facing challenges in the European commercial vehicle market, Stoneridge managed to achieve an adjusted operating margin of 40 basis points higher than the first quarter, reaching $400,000. Earnings per share came out at '-0.25', missing analysts' estimates of '-0.07'.

Publication Date: Aug -17

📋 Highlights
  • Q2 2025 Sales Growth:: Stoneridge achieved $228 million in sales, driven by 21% growth in MirrorEye sales, fueled by new OEM programs and retrofit market momentum.
  • Adjusted Operating Margin Improvement:: Margins rose 40 basis points to $400,000 QoQ, despite lower European commercial vehicle sales.
  • Major OEM Awards:: Secured $535 million MirrorEye contract and $85 million Brazil infotainment program, reinforcing OEM market growth strategy.
  • Free Cash Flow and Debt Reduction:: Free cash flow hit $7.6 million (+$5.9M YoY), enabling $38.8 million in net debt reduction via inventory optimization and a $44 million tax-efficient repatriation.
  • Strategic Divestiture Review:: Evaluating Control Devices division sale to reduce debt and fund growth in Stoneridge Electronics and Brazil, where sales rose 6% to $15.3 million with 230 bps operating profit improvement.

New Contracts Drive Growth

The company secured significant new contracts, including a record $535 million lifetime revenue agreement for a global MirrorEye program extension and an $85 million award for an infotainment electronic control unit program in Brazil. These wins underscore Stoneridge's strategic focus on expanding its presence in the OEM market.

Operational Efficiency Fuels Cash Flow

Free cash flow reached $7.6 million, a notable $5.9 million increase year-over-year. This improvement was driven by successful inventory reduction efforts and a $44 million tax-efficient international cash repatriation project. These actions resulted in a $38.8 million reduction in total debt, translating to almost $20 million in net debt reduction.

Balancing Growth and Debt Reduction

While Stoneridge acknowledges potential volatility in the commercial vehicle market due to factors like tariffs, the company remains committed to pursuing growth opportunities in MirrorEye, new product development, and margin expansion through cost-control measures. The company announced a review of strategic alternatives for its Control Devices division, with a potential sale aimed at reducing debt and supporting growth in Stoneridge Electronics and Brazil.

Revised Guidance Reflects Market Conditions

Full-year revenue guidance was adjusted to a range of $860 million to $890 million, reflecting lower production volume expectations in the North American commercial vehicle market, partially offset by favorable foreign currency impacts. This guidance update considers a 2.2% reduction in weighted average end markets, primarily due to a projected 17.5% decline in North American commercial vehicle production.

Valuation Metrics Indicate Undervaluation

Based on the provided valuation metrics, Stoneridge appears to be undervalued. The P/E ratio of -7.34 suggests substantial potential for future earnings growth. The low P/S ratio of 0.25 indicates that the market may not be fully recognizing the company's revenue potential. The high Free Cash Flow Yield of 18.35% suggests strong cash generation capabilities.

3. NewsRoom

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Stoneridge (NYSE:SRI) vs. LightPath Technologies (NASDAQ:LPTH) Head-To-Head Survey

Nov -18

Source: defenseworld.net

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Stoneridge, Inc. $SRI Shares Purchased by Acadian Asset Management LLC

Nov -14

Source: defenseworld.net

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Stoneridge, Inc. (SRI) Q3 2025 Earnings Call Prepared Remarks Transcript

Nov -07

Source: seekingalpha.com

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Stoneridge Reports Third Quarter 2025 Results

Nov -05

Source: prnewswire.com

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Stoneridge, Inc. To Broadcast Its Third Quarter 2025 Conference Call On The Web

Oct -23

Source: prnewswire.com

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Stoneridge Justifies Significant Upside Even After Soaring

Sep -14

Source: seekingalpha.com

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Stoneridge, Inc. (SRI) Q2 2025 Earnings Call Transcript

Aug -07

Source: seekingalpha.com

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Stoneridge Reports Second Quarter 2025 Results

Aug -06

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.65%)

6. Segments

Electronics

Expected Growth: 3.5%

Stoneridge Inc.'s Electronics segment growth of 3.5% is driven by increasing demand for advanced safety and security features in vehicles, growing adoption of autonomous driving technologies, and rising sales of electric vehicles. Additionally, the company's focus on innovation and expansion into new markets, such as Asia, contribute to its growth momentum.

Control Devices

Expected Growth: 3.8%

Stoneridge's Control Devices segment growth of 3.8% is driven by increasing demand for advanced safety features, electrification, and autonomous technologies in the automotive industry. Additionally, the company's focus on innovation, strategic partnerships, and expansion into emerging markets contribute to its growth momentum.

Stoneridge Brazil

Expected Growth: 4.2%

Stoneridge Brazil's 4.2% growth is driven by increasing demand for advanced safety and emission control systems in the Brazilian automotive market, coupled with the company's strategic partnerships with local OEMs and Tier 1 suppliers, as well as its investments in research and development to stay ahead of regulatory requirements.

7. Detailed Products

Control Devices

Stoneridge's control devices are designed to provide advanced electronic control systems for the commercial vehicle industry, including electronic control units, sensors, and switches.

Instrument Clusters

Stoneridge's instrument clusters provide a range of display solutions for the automotive and commercial vehicle industries, including analog and digital displays, and hybrid clusters.

Driver Information Systems

Stoneridge's driver information systems provide advanced display and interface solutions for the automotive and commercial vehicle industries, including head-up displays and reconfigurable displays.

Electrification Components

Stoneridge's electrification components include high-voltage electrical centers, battery management systems, and electric motors for the automotive and commercial vehicle industries.

Telematics and Connectivity

Stoneridge's telematics and connectivity solutions provide advanced connectivity and data analytics for the automotive and commercial vehicle industries.

8. Stoneridge, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Stoneridge, Inc. is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the presence of large and influential customers in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants is medium due to the moderate barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.44%
Debt Cost 3.95%
Equity Weight 59.56%
Equity Cost 10.97%
WACC 8.13%
Leverage 67.89%

11. Quality Control: Stoneridge, 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

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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

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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

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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

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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

5.82$

Current Price

5.82$

Potential

-0.00%

Expected Cash-Flows