Methode Electronics (MEI) AI Stock Analysis

• Market Cap: $206.29M
• Dividend Yield: 9.69%
• Average Volume (3M): 550.20K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.89
• Revenue Growth: -6.16%
• EPS Growth: -59.41%
• Country: US
• Employees: 7,500
• Sector: Technology
• Sector Strength: 40
• Industry: Hardware, Equipment & Parts
• EPS (TTM): -2.59
• Shares Outstanding: 35,690,750
• 10 Day Avg. Volume: 377,032
• 30 Day Avg. Volume: 550,201
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.22
• Price to Cash Flow (P/CF): 2.10
• P/FCF Ratio: 2.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $11.50
• Price Target Upside: 102.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Methode Electronics is currently facing significant financial and operational challenges. The declining revenue, high leverage, and negative cash flow generation highlight financial risks. Technical analysis indicates strong bearish momentum, while valuation metrics reflect underlying profitability issues. Although operational improvements and strategic program launches offer some optimism, the overall outlook remains cautious due to broader market headwinds and sector-specific challenges.

Positive Factors

EV Market Expansion

Sales to the EV market in Q3/25 were 24% of consolidated total sales, representing a year-over-year increase of 17%.

Financial Performance

MEI reported sales of $292.6 million and adjusted EBITDA of $22.1 million for Q2/25, surpassing both analyst and consensus estimates.

Operational Efficiency

MEI returned to positive free cash flow generation at $20 million, indicating solid operational efficiency improvements.

Negative Factors

Automotive Segment Decline

Automotive segment sales declined 5.7% to $145.5 million driven by lower volume in Asia due to an EV lighting program roll-off.

Debt Increase

Total debt increased to $340.6 million by the end of Q2/25 compared to $330.9 million at the end of FY/24.

Revenue Shortfall

Lower-than-expected revenue from Stellantis program launches were a key factor in the shortfall in Q3/25 financial results.

Methode Electronics Business Overview & Revenue Model

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.

How the Company Makes Money

Methode Electronics generates revenue through the sale of its engineered products and solutions, primarily to original equipment manufacturers (OEMs) and other major companies in the automotive, industrial, and medical sectors. Key revenue streams include the production and supply of custom electronic components, such as sensors and connectors, which are integral to the operation of various electronic and mechanical systems. The company also benefits from strategic partnerships and long-term contracts with leading firms in its target industries, ensuring a steady demand for its products. Additionally, Methode Electronics invests in research and development to innovate and expand its product offerings, further enhancing its market position and revenue potential.

Methode Electronics Financial Statement Overview

Summary

Methode Electronics faces declining financial performance across key areas. The income statement reflects shrinking revenue and profitability. The balance sheet indicates high leverage but a solid equity base. Cash flow challenges further compound financial difficulties, with negative growth and weak cash generation metrics. Strategic interventions are needed to improve operational efficiency and financial health.

Income Statement

Methode Electronics has experienced declining revenue and profitability. The TTM data shows a revenue decrease of approximately 4.15% from the previous annual period, and the company reported negative EBIT and net income margins, indicating operational challenges. The gross profit margin has also decreased, showing pressure on cost management.

Balance Sheet

The company's balance sheet shows a high debt-to-equity ratio, increasing financial risk. However, the equity ratio remains strong, suggesting a solid asset base relative to liabilities. Despite a decrease in total assets and stockholders' equity over the periods, the company maintains a stable financial position.

Cash Flow

Cash flow analysis reveals a significant decline in operating cash flow and free cash flow, with negative growth rates over the periods. The free cash flow to net income ratio is weak, indicating challenges in cash generation and sustainability of operations. The operating cash flow to net income ratio is also negative, highlighting insufficient earnings to support operations.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.07B	1.11B	1.18B	1.16B	1.09B	1.02B
	Gross Profit
174.80M	178.80M	264.10M	264.90M	274.10M	282.90M
	EBIT
-8.40M	-112.00M	90.40M	111.70M	127.90M	147.10M
	EBITDA
-18.60M	-52.80M	151.60M	174.60M	191.60M	207.10M
	Net Income Common Stockholders
-91.60M	-123.30M	77.10M	102.20M	122.30M	123.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
77.19M	161.50M	157.00M	172.00M	233.20M	217.30M
	Total Assets
340.36M	1.40B	1.58B	1.39B	1.47B	1.37B
	Total Debt
18.01M	358.20M	335.40M	231.30M	263.70M	378.00M
	Net Debt
-59.18M	196.70M	178.40M	59.30M	30.50M	160.70M
	Total Liabilities
95.72M	637.50M	637.30M	475.30M	549.00M	587.20M
	Stockholders Equity
241.22M	766.00M	941.80M	913.80M	918.00M	783.40M
Cash Flow		Free Cash Flow
6.80M	-2.70M	90.80M	60.80M	154.90M	95.50M
	Operating Cash Flow
15.90M	47.50M	132.80M	98.80M	179.80M	140.60M
	Investing Cash Flow
-5.20M	-17.50M	-153.10M	-37.40M	-24.80M	-44.50M
	Financing Cash Flow
-20.50M	-18.90M	3.20M	-114.60M	-142.90M	41.70M

Methode Electronics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEI, the sentiment is Negative. The current price of 5.68 is below the 20-day moving average (MA) of 6.48, below the 50-day MA of 8.95, and below the 200-day MA of 10.38, indicating a bearish trend. The MACD of -0.81 indicates Negative momentum. The RSI at 30.99 is Neutral, neither overbought nor oversold. The STOCH value of 21.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEI.

Methode Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
APH	76 Outperform	$71.60B	30.80	26.73%	1.02%	21.25%	24.59%
TEL	71 Outperform	$36.40B	19.47	15.02%	2.13%	-1.09%	-40.55%
NXPI	67 Neutral	$40.78B	16.35	28.16%	2.52%	-4.99%	-9.18%
LFUS	61 Neutral	$3.77B	38.13	4.62%	1.80%	-7.28%	-56.46%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%
MXL	45 Neutral	$787.94M	―	-40.78%	―	-48.00%	-227.62%
MEI	43 Neutral	$206.29M	―	-11.90%	9.69%	-6.16%	-59.41%

Methode Electronics Corporate Events

Methode Electronics Announces Key Leadership Changes

On January 30, 2025, Methode Electronics announced that Andrea J. Barry will step down as Chief Administrative Officer and Chief Human Resources Officer, effective January 31, 2025, and will serve as a special advisor until May 3, 2025. In conjunction with her departure, Barry has entered a Separation Agreement that includes a severance package and other compensations. Concurrently, Methode appointed Karen Keegans as the new Chief Human Resources Officer, effective February 3, 2025. Keegans brings over 30 years of HR leadership experience and is expected to play a significant role in aligning the company’s culture and talent with its business objectives. This leadership transition is part of Methode’s broader strategy to enhance organizational capabilities and regain a prominent industry position.