Methode Electronics (MEI) AI Stock Analysis

• Market Cap: $292.47M
• Dividend Yield: 5.93%
• Average Volume (3M): 247.15K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.04
• Revenue Growth: -9.51%
• EPS Growth: 29.57%
• Country: US
• Employees: 7,500
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): -0.28
• Shares Outstanding: 35,408,250
• 10 Day Avg. Volume: 226,219
• 30 Day Avg. Volume: 247,147
• PEG Ratio: 0.07
• Price to Book (P/B): 0.32
• Price to Sales (P/S): 0.21
• P/FCF Ratio: -14.64
• Enterprise Value/Market Cap: 1.87
• Enterprise Value/Revenue: 0.55
• Enterprise Value/Gross Profit: 3.59
• Enterprise Value/Ebitda: 19.43
• 1Y Price Target: $9.25
• Price Target Upside: 11.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): -0.96
• Revenue Forecast (FY): $950.88M

• Rating: 56 Neutral
• Price Target: $9.00 ▲(8.96% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is primarily constrained by weak profitability and declining revenue, despite balance-sheet stability and a sharp improvement in free cash flow. Technically, the stock is in an upswing but appears overextended, adding near-term risk. Valuation is helped by the dividend yield, while the earnings call was cautiously constructive (reaffirmed guidance and sequential improvements) but still weighed down by year-over-year sales declines and automotive segment challenges.

Positive Factors

Improved free cash flow and higher cash reserves

Material free cash flow improvement (FCF +123% TTM and a $47M YoY quarterly uplift) and a cash balance of $118.5M provide durable liquidity and funding optionality. This strengthens the company’s ability to deleverage, invest in operations, support inventory buildup for data centers, and sustain capex/R&D through cycles.

Manageable leverage and solid equity base

A debt-to-equity around 0.51 signals moderate leverage that preserves financial flexibility while a strong equity ratio provides a stable asset base. This balance sheet profile supports capital allocation, margin recovery initiatives, and tolerance for sector cyclicality without immediate refinancing stress.

Diversified end-markets with growing data center exposure

Revenue mix including automotive, industrial, medical and a growing ~$80M data center business reduces single-market reliance. Structural growth in data center demand provides a multi-year revenue runway, helping offset automotive cyclicality and underpinning sustainable demand for connectivity and sensor products.

Negative Factors

Declining revenue and negative profitability

Persistent revenue declines (TTM -4.44% and a 16% YoY quarterly drop) combined with a negative net margin and ROE signal structural demand or mix issues. Sustained top-line weakness undermines operating leverage, constrains reinvestment, and makes margin recovery dependent on execution or market recovery.

High automotive exposure amid EV headwinds

With nearly half of sales tied to automotive, exposure to EV transition and OEM production variability creates structural revenue risk. Prolonged EV headwinds or slower vehicle content growth could depress volumes and margins, requiring successful diversification or share gains in other end markets to offset the concentration.

Thin margins and adjusted net losses

A low EBITDA margin and reported adjusted net losses highlight limited margin resilience versus cost pressure. Declining gross margin suggests pricing or cost absorption issues; prolonged low profitability constrains R&D and capex funding, and reduces ability to build durable competitive advantages without structural margin improvement.

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 primarily through the sale of its electronic components and systems across multiple industry sectors. The company operates on a business model that includes direct sales to original equipment manufacturers (OEMs) and contract manufacturing services, allowing for a steady stream of income from long-term contracts. Key revenue streams include automotive sensors, connectivity products, and medical devices, which are critical for the functionality of modern vehicles and medical equipment. Additionally, Methode benefits from strategic partnerships with major automotive and industrial players, which enhance its market reach and foster innovation in product development. Factors contributing to its earnings include the increasing demand for advanced electronic solutions, ongoing investments in research and development, and the company's ability to adapt to changing market trends and customer needs.

Methode Electronics Financial Statement Overview

Summary

Financial performance is pressured by declining revenue (-4.44% TTM) and losses (net margin -5.30%, negative ROE). Offsetting this, leverage is manageable (debt-to-equity 0.51) and cash generation improved materially (free cash flow growth +123.16% TTM), indicating better liquidity and operational cash control despite weak profitability.

Income Statement

Methode Electronics has experienced declining revenue and profitability. The TTM data shows a negative revenue growth rate of -4.44% and a net profit margin of -5.30%, indicating financial challenges. The gross profit margin has also decreased compared to previous years, reflecting pressure on cost management. However, the company has shown resilience in maintaining a positive EBITDA margin of 1.19% in TTM, despite the negative EBIT margin.

Balance Sheet

The balance sheet reflects moderate financial stability with a debt-to-equity ratio of 0.51 in TTM, which is manageable but has increased over the years. The return on equity is negative, indicating a lack of profitability. However, the equity ratio remains strong, suggesting that the company has a solid asset base relative to its equity.

Cash Flow

Cash flow analysis shows improvement in free cash flow growth, with a significant increase of 123.16% in TTM. The operating cash flow to net income ratio is 0.18, indicating some cash flow generation capability despite net losses. The free cash flow to net income ratio is close to 1, suggesting effective cash management.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	984.40M	1.05B	1.11B	1.18B	1.16B	1.09B
Gross Profit	152.10M	163.40M	178.80M	264.10M	264.90M	274.10M
EBITDA	28.10M	31.10M	-53.50M	142.30M	174.60M	191.60M
Net Income	-62.90M	-62.60M	-123.30M	77.10M	102.20M	122.30M
Balance Sheet
Total Assets	1.29B	1.31B	1.40B	1.58B	1.39B	1.47B
Cash, Cash Equivalents and Short-Term Investments	118.50M	103.60M	161.50M	157.00M	172.00M	233.20M
Total Debt	370.70M	343.20M	358.20M	335.40M	231.30M	263.70M
Total Liabilities	608.10M	612.50M	637.50M	626.20M	475.30M	549.00M
Stockholders Equity	679.30M	693.30M	766.00M	941.80M	913.80M	918.00M
Cash Flow
Free Cash Flow	84.80M	-15.20M	-2.70M	90.80M	60.80M	154.90M
Operating Cash Flow	81.20M	26.40M	47.50M	132.80M	98.80M	179.80M
Investing Cash Flow	-21.40M	-32.90M	-17.50M	-153.10M	-37.40M	-24.80M
Financing Cash Flow	-47.70M	-58.90M	-18.90M	3.20M	-114.60M	-142.90M

Methode Electronics Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Neutral. The current price of 8.26 is below the 20-day moving average (MA) of 8.75, above the 50-day MA of 7.81, and above the 200-day MA of 7.51, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 46.83 is Neutral, neither overbought nor oversold. The STOCH value of 26.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MEI.

Methode Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VICR	77 Outperform	$9.02B	77.55	18.50%	―	11.55%	1745.46%
CTS	68 Neutral	$1.47B	23.37	10.98%	0.36%	3.70%	1.68%
ROG	68 Neutral	$1.97B	-33.09	-5.34%	―	-4.87%	-235.48%
BHE	66 Neutral	$2.00B	81.95	3.37%	1.44%	-2.93%	-40.33%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
PENG	58 Neutral	$996.02M	83,553.79	4.85%	―	10.76%	―
MEI	56 Neutral	$292.47M	-4.67	-8.87%	5.93%	-9.51%	29.57%

Methode Electronics Corporate Events

Methode Electronics Reshapes Executive Benefits and Compensation Plans

On December 16, 2025, Methode Electronics amended the change-in-control agreements for several top executives, including its chief financial officer, head of global automotive, chief procurement and EHS officer, and general counsel, reducing the duration of COBRA continuation coverage in the event of a qualifying change in control from 24 months to 18 months as part of the compensation committee’s annual review of these arrangements. Separately, on December 17, 2025, the board of directors approved the termination of the company’s Deferred Compensation Plan effective December 31, 2025, signaling a tightening and reshaping of executive benefits and post-employment protections that could affect the company’s cost structure and the overall design of its executive compensation program.

The most recent analyst rating on (MEI) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Methode Electronics stock, see the MEI Stock Forecast page.