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Motorcar Parts Of America (MPAA)
NASDAQ:MPAA
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Motorcar Parts Of America
(NASDAQ:MPAA)
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Rating:51Neutral
Price Target:
$9.50
▼(-27.59% Downside)
The score is driven primarily by moderate financial performance (reasonable operating margins, manageable leverage, and positive cash flow) but constrained by weak technicals (price below major moving averages and negative MACD) and unattractive valuation (very high P/E with no dividend yield provided). Earnings call commentary is mixed, with a near-term customer-driven guidance cut partly offset by strong liquidity, low leverage, and expectations for margin improvement.
Positive Factors
Balance sheet liquidity
Substantial cash and reduced net bank debt provide durable financial flexibility. With ~$146M liquidity and net bank debt down to $70.5M, the company can fund operations, pursue buybacks, reduce leverage, and absorb demand shocks without forcing distress sales or immediate external financing.
Consistent cash generation
Positive operating cash flow over recent periods shows the business converts revenue into cash even with earnings volatility. This supports capital allocation choices—debt paydown, repurchases, reinvestment—and indicates underlying operations generate recurring cash to sustain the business long term.
Structural aftermarket demand
Long-term demographic and fleet trends drive durable replacement-part demand. An aging U.S. fleet and rising vehicle counts expand addressable market for aftermarket electrical parts, supporting steady revenue potential independent of short-term auto production cycles.
Negative Factors
Customer concentration risk
Heavy reliance on a single large customer creates structural revenue vulnerability. A sustained reduction or shifting purchasing patterns at that customer can depress topline, disrupt capacity utilization, and make forecasting and fixed-cost absorption materially more uncertain over coming quarters.
Margin pressure
A 4.5 percentage-point gross margin contraction indicates sensitivity to volume, mix and capacity absorption. Lower margins reduce operating leverage and make earnings and cash flow more exposed to demand swings, limiting the firm's ability to build durable profitability cushions.
Volatile profitability & returns
Significant swings in FCF and historically negative ROE signal inconsistent earnings quality. This reduces predictability of shareholder returns and constrains the company’s ability to sustainably scale capital deployment or reliably expand margins without addressing underlying profitability volatility.
Motorcar Parts Of America (MPAA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$206.52M
Dividend YieldN/A
Average Volume (3M)136.27K
Price to Earnings (P/E)113.8
Beta (1Y)1.82
Revenue Growth6.72%
EPS GrowthN/A
CountryUS
Employees5,900
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.13
Shares Outstanding19,210,955
10 Day Avg. Volume225,317
30 Day Avg. Volume136,271
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)0.73
Price to Sales (P/S)0.25
P/FCF Ratio4.57
Enterprise Value/Market Cap1.45
Enterprise Value/Revenue0.39
Enterprise Value/Gross Profit2.02
Enterprise Value/Ebitda4.70
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Motorcar Parts Of America Business Overview & Revenue Model
Company DescriptionMotorcar Parts of America, Inc. manufactures, remanufactures, and distributes heavy-duty truck, industrial, marine, and agricultural application replacement parts. The company offers rotating electrical products, including alternators and starters; wheel hub assemblies and bearings; and brake-related products comprising brake calipers, brake boosters, brake rotors, brake pads, and brake master cylinders. It also offers test solutions and diagnostic equipment for electric vehicle powertrain development and manufacturing, including electric motor test systems, e-axle test systems, advanced power emulators, and charging unit test systems, as well as test systems for alternators, starters, belt starter generator, and bench-top testers, as well as turbochargers and test services for electric vehicle inverters. The company sells its products to automotive retail chain stores and warehouse distributors, as well as various automobile manufacturers for their aftermarket programs and warranty replacement programs in North America. Motorcar Parts of America, Inc. was founded in 1968 and is headquartered in Torrance, California.
How the Company Makes MoneyMotorcar Parts of America generates revenue primarily through the sale of aftermarket automotive parts. The company's revenue model is based on manufacturing and distributing a comprehensive range of automotive components, which are sold to both retail and wholesale customers. Key revenue streams include direct sales to automotive retailers, partnerships with major distributors, and contracts with repair shops. Additionally, MPAA benefits from economies of scale in production, allowing it to offer competitive pricing while maintaining healthy profit margins. Strategic partnerships with retailers and distributors enhance market access, driving volume sales and contributing significantly to the company's earnings.
Motorcar Parts Of America Earnings Call Summary
Earnings Call Date:Feb 09, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jun 16, 2026
Earnings Call Sentiment Neutral
The call conveyed a mixed but resilient picture: near-term performance was negatively affected by a material, one-customer sales disruption that drove a downward revision to fiscal 2026 sales guidance and caused a meaningful year-over-year gross margin contraction (24.1% → 19.6%). Offsetting this, the company demonstrated strong liquidity (~$146M), low leverage (net bank debt-to-EBITDA ~0.84), consistent cash generation, active share repurchases, sequential gross margin improvement within the year, secured new business commitments, and favorable long-term industry tailwinds (aging vehicle fleet and international demand). Management expects a rebound in the affected customer's orders and further margin improvement from operational efficiencies, tariff mitigation, and capacity utilization, while exploring strategic alternatives for a noncore EV emulator business.Q3-2026 Updates
Positive Updates
Strong Liquidity and Reduced Net Bank Debt
Total cash and availability of approximately $146 million as of December 31, 2025; net bank debt decreased by $10.9 million to $70.5 million (from $81.4 million) for the 9-month period.
Low Leverage (Net Bank Debt-to-EBITDA)
Trailing 12-month EBITDA before noncash and one-time items of $84.0 million versus net bank debt of $70.5 million, yielding a net bank debt-to-EBITDA ratio of ~0.84, indicating low financial leverage.
Positive Cash Generation and Historical Cash Flow
Generated $23.7 million cash for the 9-month period and approximately $32.8 million for trailing 12 months; approximately $60 million cash from operating activities over the past 2 years (~$3.06 per share on average).
Share Repurchase Activity
Repurchased 669,472 shares for $8.4 million during the 9-month period at an average price of $12.47, demonstrating shareholder return actions.
Sequential Gross Margin Improvement Trend
Gross margin improved sequentially during the fiscal year: Q1 18.0% → Q2 19.3% → Q3 19.6%, and management expects further gross margin expansion in Q4 driven by increased customer ordering and better capacity utilization.
New Business Commitments and Market Tailwinds
Secured numerous commitments for new business with more pending; favorable industry dynamics including rising average vehicle age in the U.S. to 12.8 years (from 12.5 in 2024) and increase in vehicles on road to 295.9 million (from 291.1 million), creating long-term replacement demand.
Growing International and Niche Business Opportunities
Increased aftermarket demand in Mexico (approx. 36 million vehicles, +2.8% YoY; average age 16.2 years); gaining importance in heavy-duty rotating electrical market; diagnostic JBT-1 installed base growing with additional service-related revenue expected; R&D investment in next-generation EV emulator with strategic alternatives being explored.
Negative Updates
Quarter Below Expectations and One Large Customer Disruption
Fiscal Q3 results were 'less than expected' due to a significant reduction in purchases from one of the company's largest customers; management estimates the customer's sales disruption could impact the company by up to approximately $50 million.
Fiscal 2026 Guidance Revised Down
Fiscal 2026 sales guidance revised down to $750 million–$760 million as a direct result of lower sales to the large customer; operating income guidance set at $72 million–$79 million (D&A ~ $10 million).
Year-over-Year Gross Margin Contraction
Gross margin declined to 19.6% in fiscal Q3 from 24.1% a year earlier, a 4.5 percentage-point decrease (driven by lower sales volume, lower capacity absorption and product mix).
Higher Returns as a Percentage of Sales
Although absolute returns remained at historical levels, the temporary sales decrease caused returns to increase as a percentage of sales, negatively impacting gross profit.
Customer Store Closures and Conservative Assumptions
The referenced large customer closed stores leading the company to conservatively assume a 15% reduction in that customer's contribution going forward, which tempers near-term sales outlook.
Quarterly Unusual Situation Impacting Results
Management characterized the Q3 sales disruption as an unusual/one-time situation that materially affected Q3 results and required downward revision of near-term expectations.
Company Guidance
Management revised fiscal 2026 guidance to sales of $750–760 million and operating income of $72–79 million (depreciation & amortization ≈ $10 million), reflecting an estimated up-to‑$50 million reduction in sales tied to one large customer (company is conservatively modeling a ~15% store reduction); Q3 gross margin was 19.6% (vs. 24.1% a year ago; sequentially 18.0% in Q1 and 19.3% in Q2) with sequential gross‑margin improvement expected in Q4. For the 9‑month period the company generated $23.7 million cash, repurchased 669,472 shares for $8.4 million at an average $12.47, and reduced net bank debt to $70.5 million from $81.4 million, leaving total cash and availability of about $146 million as of December 31, 2025; trailing‑12‑month EBITDA was $68.1 million ($84.0 million before noncash/one‑time items), implying net bank debt/EBITDA ≈ 0.84. Management reiterated expectations for continued annual positive cash flow (trailing‑12‑month cash from operations ≈ $32.8 million; ~$60 million over the past two years, ≈ $3.06 per share), further gross‑margin accretion from better brake capacity utilization, tariff mitigation, relocations to lower‑cost facilities and other cost reductions, and plans to pursue additional share repurchases, debt reduction and strategic alternatives for the EV‑emulator business, with FY‑27 guidance to be provided at the year‑end call in June.Motorcar Parts Of America Financial Statement Overview
Summary
Financials are stable-to-moderate quality. Revenue improved over multiple years but TTM dipped (-2.34%). Operating profitability is reasonable (TTM EBIT ~8.1%, EBITDA ~9.4%), yet net results have been volatile and TTM net margin is very thin (~0.3%). Leverage appears manageable with improving debt-to-equity (~0.74 TTM), and cash generation is positive (TTM OCF ~$32.8M; FCF ~$29.9M) but FCF fell sharply (-57%), indicating volatility.Income Statement
Revenue scaled up over the last several annual periods (from ~$541M in 2021 to ~$757M in 2025 annual), but TTM (Trailing-Twelve-Months) revenue dipped (-2.34%), signaling softer recent demand. Profitability is mixed: operating profitability remains reasonable (TTM EBIT margin ~8.1%; EBITDA margin ~9.4%), yet bottom-line results have been volatile with large losses in 2023–2025 annual before returning to a small profit in TTM (net margin ~0.3%). Overall, operations appear healthier than reported earnings, but the thin TTM net margin leaves limited cushion if costs rise.54
Neutral
Balance Sheet
Leverage looks manageable for the space with debt-to-equity improving versus prior years (~0.78 in 2025 annual to ~0.74 in TTM), and equity remains substantial (~$259M TTM) relative to the asset base (~$991M). The key weakness is shareholder returns: return on equity was negative across multiple annual periods and is still very low in TTM (~0.9%), reflecting inconsistent profitability. Balance sheet risk is not extreme, but earnings quality/consistency needs to improve to make the capital structure work harder.60
Neutral
Cash Flow
Cash generation is currently supportive: TTM operating cash flow (~$32.8M) and free cash flow (~$29.9M) are positive, following a rebound from negative cash flow in 2022–2023 annual. However, TTM free cash flow fell sharply (-57% growth), pointing to volatility and potential working-capital or spending pressures. Free cash flow is close to reported earnings in TTM, which is constructive, but the history of swings reduces confidence in durability.58
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 770.64M | 757.35M | 717.68M | 683.07M | 650.31M | 540.78M |
| Gross Profit | 148.02M | 153.83M | 132.55M | 113.96M | 117.86M | 109.46M |
| EBITDA | 63.61M | 50.26M | 58.59M | 48.89M | 41.59M | 57.78M |
| Net Income | 1.95M | -19.47M | -49.24M | -4.21M | 7.36M | 21.48M |
Balance Sheet | ||||||
| Total Assets | 991.31M | 957.64M | 1.01B | 1.03B | 1.02B | 847.88M |
| Cash, Cash Equivalents and Short-Term Investments | 19.57M | 11.31M | 15.81M | 13.61M | 25.22M | 17.18M |
| Total Debt | 108.22M | 201.28M | 239.34M | 277.22M | 262.71M | 186.45M |
| Total Liabilities | 732.76M | 699.94M | 726.89M | 708.09M | 700.43M | 546.74M |
| Stockholders Equity | 258.55M | 257.70M | 285.11M | 320.48M | 315.26M | 301.14M |
Cash Flow | ||||||
| Free Cash Flow | 29.91M | 40.90M | 38.17M | -25.95M | -52.41M | 42.15M |
| Operating Cash Flow | 32.77M | 45.48M | 39.17M | -21.75M | -44.86M | 56.09M |
| Investing Cash Flow | -5.00M | -4.47M | -479.00K | -4.19M | -7.94M | -14.21M |
| Financing Cash Flow | -22.20M | -44.66M | -36.44M | 14.31M | 60.22M | -76.57M |
Motorcar Parts Of America Technical Analysis
Negative
13.12
Price Trends
12.48
Negative
13.78
Negative
13.06
Negative
Market Momentum
-0.72
Positive
38.85
Neutral
31.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MPAA, the sentiment is Negative. The current price of 13.12 is above the 20-day moving average (MA) of 11.91, above the 50-day MA of 12.48, and above the 200-day MA of 13.06, indicating a bearish trend. The MACD of -0.72 indicates Positive momentum. The RSI at 38.85 is Neutral, neither overbought nor oversold. The STOCH value of 31.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MPAA.
Motorcar Parts Of America Risk Analysis
Motorcar Parts Of America disclosed 29 risk factors in its most recent earnings report. Motorcar Parts Of America reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Motorcar Parts Of America Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $376.81M | 13.69 | 12.30% | ― | 6.83% | 46.38% | |
73 Outperform | $134.26M | 3.97 | 9.19% | ― | 16.72% | 5.35% | |
72 Outperform | $6.94B | 16.80 | 9.21% | 2.63% | -1.90% | -13.86% | |
62 Neutral | $942.31M | 52.70 | 4.44% | ― | -0.10% | -53.49% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $247.11M | -7.33 | -12.26% | ― | -4.91% | -331.53% | |
51 Neutral | $206.52M | 113.76 | 0.75% | ― | 6.72% | ― |
* Consumer Cyclical Sector Average
MPAA
Motorcar Parts Of America
10.64
0.27
2.60%
CAAS
China Automotive Systems
4.42
-0.17
-3.70%
LEA
Lear
134.75
40.72
43.31%
SRI
Stoneridge
8.47
4.28
102.15%
STRT
Strattec Security
89.80
39.30
77.82%
THRM
Gentherm
34.11
0.12
0.35%
Motorcar Parts Of America Corporate Events
Executive/Board Changes
Motorcar Parts Director Warfield Resigns From Company Board
Neutral
Jan 6, 2026
On January 2, 2026, Motorcar Parts of America, Inc. announced that director Patricia W. (Tribby) Warfield resigned from the company’s board of directors and from its Human Resources and Compensation Committee, citing personal and professional commitments. The company emphasized that her departure did not stem from any disagreement with its operations, policies, or procedures, suggesting no underlying governance conflict and indicating that the resignation is not expected to signal strategic or operational discord for investors or other stakeholders.
The most recent analyst rating on (MPAA) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Motorcar Parts Of America stock, see the MPAA Stock Forecast page.
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.