Methode Electronics (MEI) AI Stock Analysis

• Market Cap: $240.81M
• Dividend Yield: 7.25%
• Average Volume (3M): 466.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.88
• Revenue Growth: -5.96%
• EPS Growth: 49.33%
• Country: US
• Employees: 7,500
• Sector: Technology
• Sector Strength: 86
• Industry: Hardware, Equipment & Parts
• EPS (TTM): -0.80
• Shares Outstanding: 35,206,814
• 10 Day Avg. Volume: 818,843
• 30 Day Avg. Volume: 466,443
• PEG Ratio: -0.12
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.42
• Enterprise Value/Market Cap: 1.94
• Enterprise Value/Revenue: 0.11
• Enterprise Value/Gross Profit: 2.68
• Enterprise Value/Ebitda: -3.23
• 1Y Price Target: $14.00
• Price Target Upside: 115.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 49 Neutral
• Price Target: $7.00 ▲(7.53%Upside)

Methode Electronics' overall stock score reflects significant financial and operational challenges, notably declining revenues and profitability, coupled with bearish technical indicators. While the earnings call suggests some positive operational improvements, the negative outlook in key segments like automotive and EV sales keeps the overall sentiment cautious.

Positive Factors

Cash Flow and Debt Management

The company generated $26 million of free cash flow, marking its best quarter since Q4/23, despite $20 million less in sales, and reduced its debt and net debt levels by $10 million from Q3/25.

Market Expansion

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

Operational Efficiency

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

Negative Factors

Automotive Segment Challenges

MEI’s Automotive segment experienced a decline in net sales by 22.6% to $112.9 million due to lower volume in North America.

Guidance and Expectations

Q4/25 Results & FY/26 Guidance were light versus expectations due to challenges in the Automotive Segment.

Program Launch Delays

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 design, manufacture, and sale of its diverse range of electronic components and systems. The company's primary revenue streams come from its automotive segment, which supplies sensors, switches, and power distribution products to major automotive manufacturers. Additionally, Methode serves the appliance and industrial sectors with custom solutions that enhance connectivity and user interface functionality. The company also benefits from strategic partnerships and long-term contracts with key clients across its operational sectors, contributing to a stable revenue base.

Methode Electronics Financial Statement Overview

Summary

Methode Electronics is facing significant financial challenges with declining revenues and profitability. The company has negative net profit margins, increased leverage, and declining shareholder equity. Despite some stability in the balance sheet, the overall financial health indicates operational inefficiencies and a need for strategic improvements.

Income Statement

Methode Electronics has experienced a declining revenue trajectory with a decrease in total revenue from $1.179 billion in 2023 to $1.048 billion in 2025. The net profit margin has turned negative, from a positive margin in earlier years to -5.97% in 2025, indicating profitability challenges. Gross profit margins have also decreased, pointing to increased cost pressures. The company's EBIT and EBITDA margins are also negative, reflecting operational inefficiencies.

Balance Sheet

The balance sheet shows a mixed picture. Stockholders' equity has decreased over the years, and the debt-to-equity ratio has increased, indicating rising leverage. The equity ratio remains relatively stable, suggesting some balance sheet stability. However, the declining return on equity, turning negative in 2025, raises concerns about shareholder value creation.

Cash Flow

Operating cash flow has declined significantly from 2021 to 2025, showing a weakening ability to generate cash from core operations. Free cash flow has also turned negative, primarily due to reduced operating cash flow and continuous capital expenditures. The ratio of operating cash flow to net income is volatile, and the free cash flow to net income ratio is negative, indicating cash flow challenges.

Breakdown	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	1.05B	1.11B	1.18B	1.16B	1.09B
Gross Profit	163.40M	178.80M	264.10M	264.90M	274.10M
EBITDA	-23.90M	-52.80M	151.60M	174.60M	191.60M
Net Income	-62.60M	-123.30M	77.10M	102.20M	122.30M
Balance Sheet
Total Assets	745.90M	1.40B	1.58B	1.39B	1.47B
Cash, Cash Equivalents and Short-Term Investments	103.60M	161.50M	157.00M	172.00M	233.20M
Total Debt	343.20M	358.20M	335.40M	231.30M	263.70M
Total Liabilities	379.30M	637.50M	637.30M	475.30M	549.00M
Stockholders Equity	693.30M	766.00M	941.80M	913.80M	918.00M
Cash Flow
Free Cash Flow	-15.20M	-2.70M	90.80M	60.80M	154.90M
Operating Cash Flow	26.40M	47.50M	132.80M	98.80M	179.80M
Investing Cash Flow	-32.90M	-17.50M	-153.10M	-37.40M	-24.80M
Financing Cash Flow	-58.90M	-18.90M	3.20M	-114.60M	-142.90M

Methode Electronics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.51
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 6.51 is below the 20-day moving average (MA) of 8.23, below the 50-day MA of 8.16, and below the 200-day MA of 8.94, indicating a bearish trend. The MACD of -0.55 indicates Positive momentum. The RSI at 35.77 is Neutral, neither overbought nor oversold. The STOCH value of 21.77 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
TTMI	74 Outperform	$4.72B	62.04	5.02%	―	11.65%	―
CTS	70 Outperform	$1.21B	20.44	11.96%	0.38%	1.16%	19.81%
VPG	69 Neutral	$361.66M	119.23	0.94%	―	-14.26%	-87.37%
BHE	69 Neutral	$1.39B	27.94	4.84%	1.76%	-7.36%	-20.46%
ROG	61 Neutral	$1.25B	74.39	1.34%	―	-8.06%	-75.10%
Sector *	58 Neutral	€2.95B	11.66	-8.77%	2.74%	5.06%	-52.33%
MEI	49 Neutral	$240.81M	―	-8.58%	7.25%	-5.96%	49.33%

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.