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1. Company Snapshot

1.a. Company Description

XPEL, Inc.manufactures, sells, distributes, and installs after-market automotive products.The company offers automotive surface and paint protection films, headlight protection, and automotive and architectural window films, as well as proprietary software.


It also provides merchandise and apparel; ceramic coatings; and tools and accessories, which includes squeegees and microfiber towels, application fluids, plotter cutters, knives, and other products.In addition, the company offers paint protection kits, car wash products, after-care products, and installation tools through its website.It sells its products to independent installers and new car dealerships, third-party distributors, and company-owned installation centers, as well as through franchisees and online sales channels.


The company serves in the United States, China, Canada, Continental Europe, the United Kingdom, Asia Pacific, Latin America, the Middle East/Africa, and internationally.XPEL, Inc.was founded in 1997 and is headquartered in San Antonio, Texas.

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1.b. Last Insights on XPEL

Recent negative drivers behind XPEL, Inc.'s performance include a weak revenue growth of 1.9% in Q4 2024, partly due to China impacts, and a foreign exchange loss of $1.2 million. Excluding China, revenue growth was 10.5%, but this was not enough to offset the negative impacts. The company's gross margin of 40.6% in Q4 2024 was also a concern. Additionally, the company's reliance on a few key customers, such as Rivian, may pose a risk to its revenue growth.

1.c. Company Highlights

2. XPEL's Q3 2025 Earnings: Growth Amidst Margin Pressures

XPEL, Inc. reported a record revenue of $125.4 million for Q3 2025, representing an 11.1% year-over-year growth, driven by the U.S. and EU regions' growth of 11.1% to $71.7 million and 28.8% to $16.5 million, respectively. However, gross margin was pressured due to unfavorable price increases and the China distributor transaction. SG&A expenses grew 20.8% to $35.7 million, and EBITDA declined 8.1% to $19.9 million. Net income decreased 11.8% to $13.1 million, with EPS of $0.47 per share, slightly missing estimates of $0.48.

Publication Date: Nov -24

📋 Highlights
  • Revenue Growth:: Q3 2025 revenue hit $125.4M (+11.1% YoY), with U.S. and EU regions contributing 11.1% and 28.8% growth respectively.
  • Acquisition Impact:: Chinese distributor acquisition added $22M in inventory, $5M in SG&A, but projected $10M in annual operating income.
  • Gross Margin Strategy:: 170 bps margin pressure from price hikes, but $75–$150M planned investment aims to improve gross margin by 10% points and reach mid- to high-20% operating margins by 2028.
  • Cost and Profit Trends:: SG&A rose 20.8% to $35.7M, EBITDA fell 8.1% to $19.9M, and net income dropped 11.8% to $13.1M despite $0.47 EPS.
  • Cash Flow Momentum:: Q3 operating cash flow surged to $33.2M (+69% YoY), driven by extended supplier terms and inventory management.

Operational Highlights

The company completed its acquisition of a Chinese distributor in September, adding $22 million in inventory and $5 million in annual SG&A expenses, with an expected $10 million in operating income. The rollout of colored films has been well-received, and the company views it as a growth opportunity. XPEL plans to invest $75 million to $150 million over the next few years to increase gross margin by 10 percentage points and operating margins in the mid- to high 20s.

Guidance and Outlook

XPEL expects Q4 revenue of $123 million to $125 million and year-over-year annual growth of 13% to 14% for 2025. The company assumes low double-digit organic revenue growth in the midterm and expects to see substantial gross margin improvement over time by investing in the business. Analysts estimate next year's revenue growth at 11.3%.

Valuation and Future Prospects

With a P/E Ratio of 26.17 and EV/EBITDA of 18.95, the market is pricing in a certain level of growth for XPEL. The company's ROE of 18.87% and ROIC of 15.14% indicate a strong ability to generate returns. As the company invests in manufacturing and takes a more significant portion of it in-house, it is well-positioned to drive gross margin improvement and achieve its operating margin target of mid-to-high 20% by 2028.

Challenges and Opportunities

The sentiment in the aftermarket and dealer channel is mixed, with weakness globally and a challenging environment. However, XPEL sees it as an opportunity to provide more value to customers and expects a record gross margin in Q1 and Q2 2026. The company is conservative about the growth potential but sees a chance to take share and grow the market.

3. NewsRoom

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Odyssey Announces Addition of Stacy Bogart to Board of Directors

Dec -04

Source: accessnewswire.com

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Commonwealth of Pennsylvania Public School Empls Retrmt SYS Makes New Investment in XPEL, Inc. $XPEL

Nov -29

Source: defenseworld.net

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Campbell & CO Investment Adviser LLC Buys Shares of 9,940 XPEL, Inc. $XPEL

Nov -17

Source: defenseworld.net

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XPEL, Inc. (XPEL) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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XPEL, Inc. (XPEL) Q3 Earnings Lag Estimates

Nov -05

Source: zacks.com

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XPEL Reports Revenue Growth of 11.1% to $125.4 million in Third Quarter 2025; Announces Strategic Investments in Manufacturing and Supply Chain

Nov -05

Source: businesswire.com

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XPEL Debuts COLOR PPF, Ultra-Exclusive Pagani Imola Roadster & Live Demos at SEMA 2025

Nov -03

Source: businesswire.com

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XPEL, Inc. to Host Conference Call to Discuss Third Quarter 2025 Results

Oct -22

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.87%)

6. Segments

Paint Protection Film

Expected Growth: 7%

Increasing adoption of luxury vehicles, growing demand for paint protection solutions, expanding dealership network, and rising consumer awareness of XPEL's premium products drive the 7% growth of Paint Protection Film segment. Additionally, the company's strategic partnerships, innovative products, and strong brand reputation contribute to its market leadership and growth momentum.

Window Film

Expected Growth: 5%

XPEL's Window Film segment growth is driven by increasing demand for premium automotive products, expanding distribution channels, and rising adoption in emerging markets. Additionally, the company's focus on innovative products, such as ceramic and color-stable films, and strategic partnerships with OEMs and dealerships contribute to its 5% growth.

Installation Labor

Expected Growth: 4%

XPEL's Installation Labor growth is driven by increasing adoption of paint protection films, expanding dealership network, and rising demand for premium vehicle protection services. Additionally, strategic partnerships, geographic expansion, and investments in digital marketing and training programs contribute to the growth.

Cutbank Credits

Expected Growth: 3%

Cutbank Credits from XPEL, Inc. exhibits 3% growth driven by increasing adoption of paint protection films, expanding dealership network, and rising demand for premium automotive services. Additionally, strategic partnerships, innovative product offerings, and effective marketing strategies contribute to the growth momentum.

Other

Expected Growth: 2%

XPEL's growth is driven by increasing adoption of paint protection films, expanding distribution network, and rising demand for automotive accessories. Additionally, the company's strategic partnerships, innovative products, and growing online presence contribute to its growth momentum.

Software

Expected Growth: 8%

XPEL's software growth is driven by increasing adoption of paint protection films and window tints in the automotive industry, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, customer experience, and digital transformation also contribute to its growth.

Training and Other

Expected Growth: 6%

XPEL's 6% growth in Training and Other is driven by increasing demand for advanced installation training, expansion of XPEL University, and growing adoption of digital training platforms. Additionally, the company's strategic partnerships and collaborations have led to increased revenue from certification programs and consulting services.

7. Detailed Products

Paint Protection Films

A clear, thin, and virtually invisible film that protects a vehicle's paint from damage caused by road debris, UV rays, and everyday wear and tear.

Window Films

A range of window tinting solutions that provide heat rejection, glare reduction, and UV protection for vehicles.

Ceramic Coatings

A protective coating that creates an impenetrable barrier against the elements, providing long-term protection for a vehicle's paint and interior surfaces.

Headlight Protection Films

A clear, protective film that shields headlights from damage caused by road debris, UV rays, and everyday wear and tear.

Interior Protection Films

A range of protective films designed to shield interior surfaces from spills, stains, and wear and tear.

DAP (Design Access Program) Software

A proprietary software solution that enables dealerships and installers to design, estimate, and manage paint protection film installations.

8. XPEL, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

XPEL, Inc. has a moderate threat of substitutes due to the presence of alternative paint protection films and coatings in the market.

Bargaining Power Of Customers

XPEL, Inc. has a low bargaining power of customers due to its strong brand presence and limited customer concentration.

Bargaining Power Of Suppliers

XPEL, Inc. has a moderate bargaining power of suppliers due to the presence of multiple suppliers in the market, but still has some dependence on key suppliers.

Threat Of New Entrants

XPEL, Inc. has a high threat of new entrants due to the relatively low barriers to entry in the paint protection film industry.

Intensity Of Rivalry

XPEL, Inc. operates in a highly competitive industry with several established players, 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 11.48%
Debt Cost 4.33%
Equity Weight 88.52%
Equity Cost 12.75%
WACC 11.78%
Leverage 12.97%

11. Quality Control: XPEL, Inc. passed 8 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
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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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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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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Superior Industries International

A-Score: 3.1/10

Value: 10.0

Growth: 1.9

Quality: 4.4

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Commercial Vehicle Group

A-Score: 2.6/10

Value: 9.1

Growth: 0.9

Quality: 2.9

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

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

49.44$

Current Price

49.44$

Potential

-0.00%

Expected Cash-Flows