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Methode Electronics (MEI)
NYSE:MEI

Methode Electronics (MEI) AI Stock Analysis

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MEI

Methode Electronics

(NYSE:MEI)

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Neutral 50 (OpenAI - 4o)
Rating:50Neutral
Price Target:
$7.00
▼(-0.43% Downside)
Methode Electronics' overall stock score reflects significant financial challenges, particularly in profitability and revenue growth. While there are positive developments in cash flow management and strategic initiatives, these are offset by ongoing issues in the automotive segment and a negative P/E ratio. The high dividend yield and recent executive appointment provide some positive aspects, but the stock remains under pressure due to broader financial and operational challenges.

Methode Electronics (MEI) vs. SPDR S&P 500 ETF (SPY)

Methode Electronics Business Overview & Revenue Model

Company DescriptionMethode Electronics, Inc. (MEI) is a global leader in the design and manufacturing of custom-engineered and application-specific products for a variety of industries, including automotive, industrial, medical, and consumer electronics. The company specializes in the development of advanced electronic components and systems, including sensors, connectivity solutions, and human-machine interface technologies. With a commitment to innovation and quality, Methode serves a diverse clientele, providing essential components that enhance functionality and performance in various applications.
How the Company Makes MoneyMethode 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 Earnings Call Summary

Earnings Call Date:Dec 03, 2025
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Mar 05, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted several operational improvements and strategic initiatives, particularly in cash flow management and data center growth, indicating positive steps forward. However, these were balanced by notable year-over-year sales declines and ongoing challenges in the automotive segment, leading to a mixed overall picture.
Q2-2026 Updates
Positive Updates
Sequential Improvement in Financial Results
Net sales for the quarter were $247 million, up 3% sequentially, with adjusted EBITDA rising 12% sequentially to $18 million.
Improvement in Free Cash Flow
Quarterly free cash flow improved by $47 million year-over-year, reflecting a better cash flow management.
Operational and Strategic Accomplishments
Significant improvements in quality, delivery, and cost at Egypt and Mexico facilities. Transition to a global, cross-functional organization structure.
Data Center Growth Strategy
Data center activity generated over $80 million in annual sales last year, with expectations for long-term growth.
Capital Allocation Strategy Success
Net debt was reduced by $29.6 million year-over-year, and cash reserves increased by $21.5 million.
Negative Updates
Decrease in Year-over-Year Sales
Second quarter net sales were $246.9 million, a decrease of 16% compared to the previous year.
Adjusted Net Loss
Second quarter adjusted net loss was $6.7 million, marking an $11.9 million change from fiscal 2025.
Challenges in Automotive Segment
Automotive within Methode is 44% of total sales with significant exposure to EV headwinds, particularly in North America.
Company Guidance
During the Methode Electronics Second Quarter Fiscal 2026 Financial Results Conference Call, management reaffirmed their full-year sales guidance of $900 million to $1 billion and adjusted EBITDA of $70 million to $80 million, projecting a stronger second half. The company reported net sales of $247 million for the quarter, marking a 3% sequential increase, while adjusted EBITDA rose 12% sequentially to $18 million. Despite a year-over-year decrease of 16% in net sales compared to fiscal 2025, Methode improved quarterly free cash flow by $47 million year-over-year and ended the quarter with $118.5 million in cash, up $21.5 million from the previous year. They also highlighted a $10 million inventory build to support vendor-managed inventory for data center customers. Overall, the company is focused on improving operational performance, particularly in their Egypt and Mexico facilities, and is committed to leveraging synergies for future growth in sectors like data centers and vehicle electrification.

Methode Electronics Financial Statement Overview

Summary
Income Statement
45
Neutral
Balance Sheet
55
Neutral
Cash Flow
60
Neutral
Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Methode Electronics Technical Analysis

Technical Analysis Sentiment
Negative
Last Price7.03
Price Trends
50DMA
7.06
Negative
100DMA
7.17
Negative
200DMA
7.16
Negative
Market Momentum
MACD
-0.08
Positive
RSI
42.51
Neutral
STOCH
2.91
Positive
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 7.03 is below the 20-day moving average (MA) of 7.22, below the 50-day MA of 7.06, and below the 200-day MA of 7.16, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 42.51 is Neutral, neither overbought nor oversold. The STOCH value of 2.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEI.

Methode Electronics Peers Comparison

Overall Rating
UnderperformOutperform
Sector (―)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$1.29B22.6310.98%0.36%3.70%1.68%
73
Outperform
$4.17B53.2413.89%11.55%1745.46%
70
Neutral
$1.63B44.573.37%1.44%-2.93%-40.33%
61
Neutral
$1.04B68,680.176.17%16.91%
58
Neutral
$1.66B-25.32-5.34%-4.87%-235.48%
50
Neutral
$237.94M-3.76-8.87%5.95%-9.51%29.57%
* Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MEI
Methode Electronics
6.66
-4.94
-42.59%
BHE
Benchmark Electronics
44.18
-0.98
-2.17%
CTS
CTS
43.47
-9.17
-17.42%
ROG
Rogers
91.83
-9.63
-9.49%
VICR
Vicor
97.19
48.11
98.02%
PENG
Penguin Solutions
19.67
1.31
7.14%

Methode Electronics Corporate Events

Executive/Board ChangesShareholder Meetings
Methode Electronics Stockholders Approve Key Proposals
Neutral
Sep 18, 2025

At the annual meeting of stockholders held on September 17, 2025, Methode Electronics, Inc. stockholders voted on several proposals. These included the election of seven directors, ratification of Ernst & Young LLP as the independent accounting firm for the fiscal year ending May 2, 2026, and an advisory vote on executive compensation. The results showed strong support for the directors and the accounting firm, while the executive compensation received mixed feedback.

Executive/Board ChangesBusiness Operations and Strategy
Methode Electronics Appoints New Chief Accounting Officer
Positive
Sep 11, 2025

On September 7, 2025, Methode Electronics appointed Stacie Schulz as Chief Accounting Officer, effective September 11, 2025. Schulz, with a robust background in accounting roles at Superior Industries International and Tenneco, will report to CFO Laura Kowalchik. Her compensation package includes a $350,000 annual salary, bonuses, and long-term incentives. This strategic appointment aims to bolster Methode’s financial leadership and operational efficiency.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 09, 2025