Methode Electronics (MEI) AI Stock Analysis

• Market Cap: $273.91M
• Dividend Yield: 6.41%
• Average Volume (3M): 412.65K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.91
• Revenue Growth: -5.96%
• EPS Growth: 49.33%
• Country: US
• Employees: 7,500
• Sector: Technology
• Sector Strength: 84
• Industry: Hardware, Equipment & Parts
• EPS (TTM): -0.80
• Shares Outstanding: 35,206,814
• 10 Day Avg. Volume: 382,767
• 30 Day Avg. Volume: 412,647
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 2.74
• Enterprise Value/Ebitda: -25.79
• 1Y Price Target: $14.00
• Price Target Upside: 99.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 52 Neutral
• Price Target: $7.50 ▲(6.84% Upside)

Methode Electronics' overall stock score reflects significant financial challenges, including declining revenues and profitability, which are the most impactful factors. Technical analysis indicates a bearish trend, while valuation is supported by a high dividend yield despite profitability issues. The earnings call highlights mixed prospects with operational improvements but substantial risks in key segments.

Positive Factors

Cash Flow

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

Financial Performance

MEI expects to double its adjusted EBITDA due to operational improvements.

Negative Factors

Automotive Segment Challenges

Q4/25 Results & FY/26 Guidance Light versus Expectations due to Challenges in the Automotive Segment.

Sales Decline

Sales are expected to decline by approximately $100 million due to lower demand for electric vehicles.

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 and electromechanical components and systems to OEMs (Original Equipment Manufacturers) and Tier 1 suppliers in its target industries. The company operates on a project-based revenue model, where it engages in long-term contracts with clients to develop customized solutions tailored to specific needs. Key revenue streams include sales of sensors, connectors, and other electronic components, as well as engineering and prototyping services. Additionally, Methode benefits from strategic partnerships with major players in the automotive and telecommunications sectors, which not only provides a steady stream of orders but also enhances its market visibility and growth potential. The company's focus on innovation and R&D further strengthens its competitive advantage, allowing it to capture emerging opportunities in high-demand markets.

Methode Electronics Financial Statement Overview

Summary

Methode Electronics faces financial challenges with declining revenues, profitability, and cash flow generation. The company shows increased leverage and reduced shareholder equity. Despite some balance sheet stability, the overall financial health reflects operational and strategic challenges that need addressing to improve financial performance.

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.07B	1.05B	1.11B	1.18B	1.16B	1.09B
Gross Profit	174.80M	163.40M	178.80M	264.10M	264.90M	274.10M
EBITDA	-18.60M	-23.90M	-52.80M	151.60M	174.60M	191.60M
Net Income	-91.60M	-62.60M	-123.30M	77.10M	102.20M	122.30M
Balance Sheet
Total Assets	1.30B	1.31B	1.40B	1.58B	1.39B	1.47B
Cash, Cash Equivalents and Short-Term Investments	103.80M	103.60M	161.50M	157.00M	172.00M	233.20M
Total Debt	355.20M	343.20M	358.20M	335.40M	231.30M	263.70M
Total Liabilities	600.30M	612.50M	637.50M	637.30M	475.30M	549.00M
Stockholders Equity	704.30M	693.30M	766.00M	941.80M	913.80M	918.00M
Cash Flow
Free Cash Flow	6.80M	-15.20M	-2.70M	90.80M	60.80M	154.90M
Operating Cash Flow	15.90M	26.40M	47.50M	132.80M	98.80M	179.80M
Investing Cash Flow	-5.20M	-32.90M	-17.50M	-153.10M	-37.40M	-24.80M
Financing Cash Flow	-20.50M	-58.90M	-18.90M	3.20M	-114.60M	-142.90M

Methode Electronics Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 7.02 is below the 20-day moving average (MA) of 7.07, below the 50-day MA of 7.47, and below the 200-day MA of 8.54, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 60.82 is Neutral, neither overbought nor oversold. The STOCH value of 86.96 is Negative, 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
TTMI	79 Outperform	$4.64B	51.88	5.89%	―	14.24%	424.78%
CTS	76 Outperform	$1.24B	19.87	11.96%	0.38%	1.16%	19.81%
BHE	69 Neutral	$1.44B	38.30	3.49%	1.74%	-5.95%	-43.46%
ROG	62 Neutral	$1.40B	72.21	-5.25%	―	-7.61%	-212.91%
Sector *	61 Neutral	$35.51B	8.11	-10.49%	1.89%	8.55%	-8.72%
VPG	61 Neutral	$371.55M	112.76	-0.39%	―	-11.47%	-106.18%
MEI	52 Neutral	$273.91M	―	-8.58%	6.41%	-5.96%	49.33%

Methode Electronics Corporate Events

Methode Electronics Awards RSUs and PSUs to Executives

On August 8, 2025, Methode Electronics‘ Compensation Committee awarded restricted stock units (RSUs) and performance-based stock units (PSUs) to its executive officers as part of the 2026 Long-Term Incentive Program. This initiative, developed with insights from an independent consultant and investor feedback, aims to enhance the company’s operating performance and retention objectives by balancing performance-based and time-based awards.