Methode Electronics (MEI) AI Stock Analysis

• Market Cap: $354.77M
• Dividend Yield: 5.63%
• Average Volume (3M): 261.98K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.82
• Revenue Growth: -6.16%
• EPS Growth: -59.41%
• Country: US
• Employees: 7,500
• Sector: Technology
• Sector Strength: 86
• Industry: Hardware, Equipment & Parts
• EPS (TTM): -0.41
• Shares Outstanding: 35,690,750
• 10 Day Avg. Volume: 275,768
• 30 Day Avg. Volume: 261,976
• PEG Ratio: -0.87
• Price to Book (P/B): 1.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 16.26
• Enterprise Value/Market Cap: 3.68
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 7.47
• Enterprise Value/Ebitda: -9.04
• 1Y Price Target: $7.00
• Price Target Upside: -29.58% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 51 Neutral
• Price Target: $7.00 ▼(-29.58%Downside)

Methode Electronics faces significant financial challenges, including declining revenues and high leverage. Despite operational improvements and strategic initiatives, the company's stock remains under pressure due to market headwinds, particularly in the automotive sector. Technical indicators suggest some short-term positive momentum, but valuation concerns persist due to negative earnings.

Positive Factors

Earnings

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.

Program Launches

Successful launch of 20 new OEM vehicle programs YTD, with another 33 programs launching over the next five quarters.

Negative Factors

Debt Levels

Total debt was $340.6 million at the end of Q2/25 versus $330.9 million at the end of FY/24, and free cash flow was negative.

Market Headwinds

Key market headwinds in automotive and commercial vehicles remain an area of concern regarding FY/25 and FY/26.

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 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 declining financial performance with shrinking revenue and profitability, high leverage but solid equity base, and cash flow challenges. Strategic interventions are needed to enhance operational efficiency.

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
EBITDA	-18.60M	-52.80M	151.60M	174.60M	191.60M	207.10M
Net Income	-91.60M	-123.30M	77.10M	102.20M	122.30M	123.40M
Balance Sheet
Total Assets	1.30B	1.40B	1.58B	1.39B	1.47B	1.37B
Cash, Cash Equivalents and Short-Term Investments	103.80M	161.50M	157.00M	172.00M	233.20M	217.30M
Total Debt	355.20M	358.20M	335.40M	231.30M	263.70M	378.00M
Total Liabilities	600.30M	637.50M	637.30M	475.30M	549.00M	587.20M
Stockholders Equity	704.30M	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: Positive
• Last Price: 9.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEI, the sentiment is Positive. The current price of 9.94 is above the 20-day moving average (MA) of 9.01, above the 50-day MA of 7.88, and above the 200-day MA of 9.24, indicating a bullish trend. The MACD of 0.52 indicates Negative momentum. The RSI at 75.21 is Negative, neither overbought nor oversold. The STOCH value of 89.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MEI.

Methode Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TTMI	76 Outperform	$4.13B	55.77	5.02%	―	11.65%	―
CTS	73 Outperform	$1.29B	21.90	11.39%	0.36%	-2.76%	16.64%
VPG	69 Neutral	$374.79M	127.88	0.94%	―	-14.26%	-87.37%
BHE	69 Neutral	$1.40B	26.79	4.84%	1.75%	-7.36%	-20.46%
ROG	63 Neutral	$1.36B	80.76	1.34%	―	-8.06%	-75.10%
Sector *	56 Neutral	$3.18B	5.08	-5.68%	5.65%	8.05%	-41.83%
MEI	51 Neutral	$354.77M	―	-11.90%	5.63%	-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.