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Materion Corp (MTRN)
NYSE:MTRN
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Materion
(NYSE:MTRN)
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Rating:67Neutral
Price Target:
$148.00
▲(4.68% Upside)
Action:ReiteratedDate:02/14/26
The score is driven primarily by improving (but still inconsistent) financial performance and a constructive technical uptrend. This is partly offset by a very expensive valuation, while the latest earnings call supports a cautiously optimistic outlook with 2026 growth guidance and strong bookings/backlog, tempered by near-term operational and cash-flow risks from the Clad Strip disruption.
Positive Factors
Record bookings & backlog
A growing backlog and a ~ $200M RFQ pipeline provide durable revenue visibility and de-risk near-term cyclicality. Record bookings across semiconductor, defense and space indicate broad-based demand that can sustain multi-quarter revenue growth and support capacity planning and margin leverage.
Defense partnership & capacity investment
A funded $65M capacity build with a major U.S. defense prime embeds long-term strategic demand and secures supply for defense programs. This strengthens the company's competitive position in high-value alloys, supports multi-year double-digit defense revenue growth, and improves long-term mix and contract durability.
Guided margin and EPS improvement
Management's explicit guidance toward higher EPS and a 23% EBITDA margin reflects a clear operational target and internal levers for margin expansion. Combined with segment progress (Electronic Materials, Precision Optics), this implies sustainable profit improvement if execution continues, supporting cash generation and reinvestment.
Negative Factors
Precision Clad Strip quality event
A material quality failure that halted two facilities demonstrates execution and quality-control risk in a core product line. It disrupted shipments to the largest customer, caused restart costs and inventory idling, and can create lasting supply reliability and customer-trust issues unless corrective actions fully restore consistency.
Volatile free cash flow & working capital
Historic and recent FCF volatility, including a sharp 2025 decline and Q4 working-capital strain, reduces financial flexibility for capex and strategic projects. Elevated inventory and episodic negative FCF increase reliance on credit capacity, raising risk if demand softens or further operational disruptions occur.
Margin compression & inconsistent returns
A downward trend in gross margin and an inconsistent return profile signal structural pressure on profitability. Even with 2025 recovery, margin compression limits operating leverage and could constrain the company's ability to sustainably fund growth investments or reliably hit mid-term targets without material efficiency or pricing improvements.
Materion (MTRN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.93B
Dividend Yield0.43%
Average Volume (3M)226.98K
Price to Earnings (P/E)34.5
Beta (1Y)1.24
Revenue Growth3.93%
EPS Growth-73.94%
CountryUS
Employees3,000
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)1.53
Shares Outstanding20,736,214
10 Day Avg. Volume251,969
30 Day Avg. Volume226,984
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)2.74
Price to Sales (P/S)1.44
P/FCF Ratio51.64
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue1.91
Enterprise Value/Gross Profit11.33
Enterprise Value/Ebitda18.39
Forecast
1Y Price Target
$170.00Price Target Upside20.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)6.25
Revenue Forecast (FY)$1.90B
Materion Business Overview & Revenue Model
Company DescriptionMaterion Corporation, through with its subsidiaries, produces advanced engineered materials used in semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and telecom and data center in the United States, Asia, Europe, and internationally. It operates through Performance Alloys and Composites, Advanced Materials, and Precision Optics segments. The Performance Alloys and Composites segment offers advanced engineered solutions comprising beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes. This segment operates the bertrandite ore mine and refinery located in Utah that provides feedstock hydroxide for its beryllium businesses and external sale. The Advances Materials segment produces advanced chemicals, microelectronics packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal pre-forms, high temperature braze materials, and ultra-pure wire. This segment offers its products from its facilities, as well as through direct sales offices and independent sales representatives. The Precision Optics segment designs and produces precision thin film coatings, optical filters, and assemblies. This segment sells its directly from its facilities, as well as through direct sales offices and independent sales representatives throughout the world. The company was formerly known as Brush Engineered Materials Inc. and changed its name to Materion Corporation in 2011. Materion Corporation was incorporated in 1931 and is headquartered in Mayfield Heights, Ohio.
How the Company Makes MoneyMaterion makes money primarily by manufacturing and selling advanced materials and precision-engineered products to OEMs and other industrial customers, generating revenue from product shipments under customer purchase orders and longer-term supply arrangements. Its revenue model is largely business-to-business and centers on: (1) Advanced alloys and engineered materials sales—supplying specialty metals and alloys (including copper-based and beryllium-containing materials) in forms such as strip, rod, wire, and other semi-finished products used for electrical, mechanical, and thermal performance in end markets like aerospace/defense, industrial, and electronics; (2) Semiconductor and electronics-related materials—selling specialized materials used in semiconductor fabrication and related manufacturing, including target and deposition-related materials and other high-purity/engineered inputs; and (3) Precision optics and thin-film coated products—producing and selling optical components and coatings used in high-performance sensing, imaging, laser, and other photonics applications. Profitability is influenced by value-added processing (engineering, precision manufacturing, coating, and quality requirements), mix of higher-margin specialty products, customer qualification cycles in regulated markets (e.g., aerospace/defense), and exposure to demand cycles in semiconductor and industrial markets. Specific significant partnerships contributing to earnings: null.
Materion Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a balanced picture: significant operational and commercial progress across Electronic Materials and Precision Optics (strong revenue growth, margin expansion, record bookings, and a growing backlog), plus constructive 2026 guidance and strategic investments (defense beryllium capacity). These positives were offset by a material quality event in Precision Clad Strip that led to temporarily idled facilities, a sharp revenue and EBITDA decline in Performance Materials for the quarter, working capital and cash flow pressure from the disruption, and near-term restart costs. Management framed the Clad Strip event as contained with corrective actions implemented and expects a ramp in 2026. Given the breadth of growth drivers, margin improvement, record bookings, and forward guidance that outweigh the isolated but meaningful operational setback, the overall tone is cautiously optimistic.Q4-2025 Updates
Positive Updates
Electronic Materials: Strong Quarter and Margin Expansion
Value-added sales of $94.1M in Q4, up 20% year-over-year and up 18% sequentially; full-year organic growth of 8%. Adjusted EBITDA of $22.0M representing a 23.4% margin, with ~500 basis points improvement year-over-year. Management expects continued top-line growth in 2026 driven by semiconductor demand (AI, HPC, data storage).
Precision Optics Transformation and Growth
Q4 value-added sales of $27.4M, up 26% year-over-year; Q4 adjusted EBITDA $4.3M (15.7% margin). This marked the third consecutive quarter of top-line improvement and fourth consecutive quarter of improved bottom-line results, with the business tracking ahead of plan across semiconductor, space, defense, and automotive end markets.
Backlog, Bookings and Demand Momentum
Backlog increased ~7% year-over-year and improved 12% in the second half versus the first half. New business bookings reached nearly $140M (highest ever) with an additional $35M already booked this year and an approximately $200M pipeline of RFQs. Semiconductor order rates up 6% year-over-year (14% excluding China).
Defense and Strategic Investment
Defense sales surpassed $100M for the second consecutive year and have grown ~10% annually since 2020. Company secured a $65M investment from a major U.S. defense prime to expand beryllium capacity to support near- and multi-year defense demand and enable sustained double-digit growth in out years.
Full-Year Profitability and 2026 Guidance
Full-year adjusted EBITDA of $217M (20.7% of VA sales), up 50 basis points year-over-year despite top-line headwinds. Adjusted EPS for the year was $5.44, up 2% year-over-year. Management guides 2026 adjusted EPS of $6.00–$6.50 (approximately 15% growth at midpoint) and progress toward a mid-term EBITDA margin target of 23%.
Quarterly Margin and EPS Improvement
Q4 adjusted EBITDA was $57.0M (22.5% of value-added sales), with margin expansion of 170 basis points sequentially. Quarterly adjusted earnings per share were $1.053, up 9% sequentially.
New Energy and Market Diversification
New energy sales more than doubled year-over-year and order rates for the new energy market rose over 50%. Company signed a multiyear supply agreement with Commonwealth Fusion Systems and noted meaningful momentum in energy and space end markets.
Negative Updates
Precision Clad Strip Quality Event and Facility Idling
A quality control failure impacted product shipped to the company's largest customer, prompting temporary idling of two Precision Clad Strip facilities in Q4 for root-cause fixes and system-wide quality enhancements. This event materially constrained Q4 shipments to that customer and required additional ramp and restart costs.
Performance Materials Revenue and EBITDA Decline
Performance Materials value-added sales were $132.4M in Q4, down 32% year-over-year primarily due to the Clad Strip disruption. Adjusted EBITDA for the segment was $35.8M (27% of VA sales), down 33% year-over-year. All-in Q4 value-added sales were down 14% largely driven by this issue.
Short-Term Cash Flow and Working Capital Pressure
The Clad Strip quality event temporarily halted inventory movement and receipts, negatively impacting cash flow in Q4. The company ended the quarter with net debt of approximately $445M and $224M of available capacity; leverage was about 2.1x. Management noted elevated inventory (including from prior acquisitions) and identified working capital as an area of focus.
Near-Term Operational Costs and Q1 Headwinds
Management expects a slower start to 2026 (normal seasonality plus ramping of Clad Strip) and will incur additional costs during the Q1 restart. Guidance assumes Q1 roughly 10% higher than last year, but with sequential ramp costs that will weigh on near-term earnings.
Segment and Geographic Uncertainty (China Exposure)
The company experienced earlier China-related headwinds (tariff/geopolitical impacts) that pressured first-half 2025 results. Management is not assuming further China declines in 2026 but acknowledged prior uncertainty and is focused on diversifying global growth.
Company Guidance
Management guided 2026 adjusted EPS of $6.00–$6.50 (about 15% growth at the midpoint versus FY2025 adjusted EPS $5.44), noting a slower Q1 (roughly 10% above last year) as Clad Strip is ramped with some incremental restart costs and then sequential step‑ups through the year driven by strong top‑line growth in defense, semiconductor, energy and space; they reiterated a mid‑term adjusted EBITDA margin target of 23% (up from FY2025 adjusted EBITDA of $217M at 20.7% VA margin) and said free cash flow should strengthen via working‑capital optimization and disciplined capex. Management also highlighted balance‑sheet capacity (net debt ≈ $445M, $224M available on the credit facility, leverage ~2.1x), backlog up ~7% year‑over‑year with H2 backlog +12% vs H1, nearly $140M of new bookings (plus $35M booked so far this year) and a ~ $200M RFQ pipeline, and a $65M beryllium capacity investment (≈24‑month build) to support expected defense growth.Materion Financial Statement Overview
Summary
Results improved in 2025 with a return to solid profitability after a weak 2024 and meaningful multi-year revenue growth, but margins have compressed from 2023 to 2025 and free cash flow has been volatile with a sharp decline in 2025 versus the prior year. Leverage appears manageable with improved capitalization over time, though returns have been inconsistent.Income Statement
Revenue has grown meaningfully since 2020 (with a small pullback in 2023), and 2025 returned to solid profitability (about 4.2% net margin) after a very weak 2024 (near-breakeven). Profitability is positive but volatile: gross margin has trended down from 2023 to 2025, and operating profitability remains moderate (about 6.3% EBIT margin and 10.2% EBITDA margin in 2025). Overall, the income statement shows a growing business with improving earnings power in 2025, but with noticeable margin and earnings variability year-to-year.66
Positive
Balance Sheet
Leverage is moderate and fairly steady, with debt running at roughly ~0.56x equity in 2025 (improved versus 2021’s higher leverage), and equity has expanded over time. Returns on equity are currently reasonable (about 7.9% in 2025) but have been inconsistent, dropping sharply in 2024 before recovering. Overall, the balance sheet looks manageable with improving capitalization versus earlier years, though the return profile is not consistently strong.64
Positive
Cash Flow
Operating cash generation is positive, but cash conversion is mixed: in 2025, free cash flow was about half of net income, and free cash flow declined sharply year over year. Cash flow has been uneven over the period, including negative free cash flow in 2021 and very low free cash flow in 2024. The business is generating cash, but the volatility and recent free-cash-flow contraction reduce confidence in near-term consistency.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.79B | 1.68B | 1.67B | 1.76B | 1.51B |
| Gross Profit | 308.63M | 325.99M | 349.04M | 343.88M | 283.76M |
| EBITDA | 182.03M | 203.30M | 203.04M | 177.52M | 125.67M |
| Net Income | 74.82M | 5.89M | 95.70M | 85.99M | 72.47M |
Balance Sheet | |||||
| Total Assets | 1.80B | 1.70B | 1.76B | 1.69B | 1.61B |
| Cash, Cash Equivalents and Short-Term Investments | 13.68M | 16.71M | 13.29M | 13.10M | 14.46M |
| Total Debt | 600.90M | 517.04M | 493.73M | 504.91M | 523.17M |
| Total Liabilities | 859.52M | 828.75M | 877.67M | 891.99M | 887.04M |
| Stockholders Equity | 943.28M | 868.88M | 885.05M | 799.99M | 720.44M |
Cash Flow | |||||
| Free Cash Flow | 49.96M | 7.01M | 24.54M | 38.35M | -12.67M |
| Operating Cash Flow | 103.24M | 87.82M | 144.41M | 115.96M | 90.24M |
| Investing Cash Flow | -98.14M | -79.61M | -119.22M | -79.73M | -494.27M |
| Financing Cash Flow | -9.82M | -4.19M | -24.85M | -35.56M | 393.01M |
Materion Technical Analysis
Neutral
141.39
Price Trends
147.09
Negative
134.79
Positive
118.94
Positive
Market Momentum
-2.02
Positive
43.51
Neutral
39.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTRN, the sentiment is Neutral. The current price of 141.39 is below the 20-day moving average (MA) of 150.50, below the 50-day MA of 147.09, and above the 200-day MA of 118.94, indicating a neutral trend. The MACD of -2.02 indicates Positive momentum. The RSI at 43.51 is Neutral, neither overbought nor oversold. The STOCH value of 39.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MTRN.
Materion Risk Analysis
Materion disclosed 31 risk factors in its most recent earnings report. Materion reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Materion Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $2.93B | 34.48 | 8.14% | 0.43% | 3.93% | -73.94% | |
62 Neutral | $4.01B | -2.81 | -45.84% | ― | ― | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
57 Neutral | $2.39B | -2.78 | -9999.00% | ― | ― | -111.94% | |
54 Neutral | $10.22B | -100.09 | -5.04% | ― | 26.44% | -95.87% | |
50 Neutral | $765.17M | -5.12 | -22.22% | 1.17% | -16.89% | -403.77% | |
42 Neutral | $967.39M | -0.87 | -35.30% | ― | ― | -18.77% |
* Basic Materials Sector Average
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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.