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Stoneridge (SRI)
NYSE:SRI

Stoneridge (SRI) AI Stock Analysis

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Stoneridge

(NYSE:SRI)

Rating:58Neutral
Price Target:
$6.50
▼(-18.44%Downside)
Stoneridge's overall stock score is primarily influenced by financial performance and earnings call insights. Financial challenges, particularly negative profitability metrics, weigh heavily on the score. However, strong segment growth and positive earnings call sentiment provide some upside potential. Technical analysis suggests caution due to overbought conditions, and valuation metrics remain unattractive.
Positive Factors
Financial Performance
SRI's Q1/25 results were better than expectations with sales of $217.9 million and adjusted EBITDA of $7.6 million.
Investment Rating
Analyst has an OUTPERFORM investment rating on the shares with a price target of $16, reflecting confidence in the company's future performance.
Product Adoption
MirrorEye has experienced solid market adoption with launches in several major brands and is anticipated to see significant revenue growth in the coming years.
Negative Factors
Quality-related Issues
Q4/24 was impacted by one-time quality-related items and incremental engineering costs that negatively affected adjusted EBITDA by $3.1 million and $2.1 million, respectively.
Sales Decline
Electronics Q1/25 sales of $140.5 million decreased by 6.0% relative to Q4/24 driven by lower production volumes in the commercial vehicle end market and lower off-highway sales.
Sales Reduction
Control Devices sales decreased 16.3% to $63.2 million versus Q4/23 due to lower customer production volumes in the North American passenger vehicle end market, as well as the expected wind-down of end-of-life programs and lower sales in China.

Stoneridge (SRI) vs. SPDR S&P 500 ETF (SPY)

Stoneridge Business Overview & Revenue Model

Company DescriptionStoneridge, Inc. (SRI) is a global designer and manufacturer of highly engineered electrical and electronic components, modules, and systems for the automotive, commercial vehicle, motorcycle, agricultural, and off-highway vehicle markets. With a focus on innovation and technology, Stoneridge provides advanced solutions that enhance vehicle performance, safety, and efficiency. The company's core products include driver information systems, electronic control units, sensors, and actuators.
How the Company Makes MoneyStoneridge makes money primarily through the sale of its engineered electrical and electronic components to original equipment manufacturers (OEMs) and tier-one suppliers in the automotive and commercial vehicle industries. The company's revenue streams are derived from its various product segments, including control devices, electronics, and PST (a Brazilian-based operation focusing on the automotive and commercial vehicle markets). Stoneridge's earnings are significantly influenced by the demand in the global automotive market, technological advancements, and regulatory requirements for vehicle safety and efficiency. Additionally, the company may enter strategic partnerships and collaborations to enhance its product offerings and market reach.

Stoneridge Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 106.48%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The call highlighted strong revenue growth in the MirrorEye and SMART 2 tachograph segments, along with improvements in gross margins and free cash flow. However, concerns about tariffs and production forecast volatility presented notable challenges.
Q1-2025 Updates
Positive Updates
MirrorEye Revenue Growth
MirrorEye revenue increased by 24% relative to the fourth quarter of 2024, driven by strong sales in the bus market and the ramp-up of OEM programs.
Adjusted Gross Margin Improvement
Adjusted gross margin improved by 210 basis points in the first quarter, driven by material cost improvements and reduced quality-related costs.
Free Cash Flow Increase
Free cash flow was approximately $4.9 million, an increase of approximately $1.5 million versus the first quarter of the prior year.
Record Sales for SMART 2 Tachograph
The SMART 2 tachograph set a record for quarterly sales, driven by continued strong demand.
Stoneridge Brazil Growth
Stoneridge Brazil's first quarter sales totaled $14.4 million, representing an increase of $2 million or approximately 16% growth relative to the fourth quarter of last year.
Negative Updates
Tariff Exposure and Market Uncertainty
There remains significant volatility and uncertainty in the market due to tariffs, although Stoneridge has strategies in place to mitigate impacts.
Higher SG&A Costs
Higher SG&A costs were reported, primarily due to the normalization of incentive compensation to annual targeted amounts.
Volatile Production Forecasts
Recent third-party production forecasts have significantly reduced full-year production volume expectations, primarily in the back half of the year.
Company Guidance
During the Stoneridge First Quarter 2025 Conference Call, the company provided a robust overview of its financial performance and guidance. Key metrics highlighted include an adjusted gross margin improvement of 210 basis points and a significant increase in MirrorEye revenue by 24% from the previous quarter. The company also reported a $2.5 million reduction in quality-related costs, contributing to an overall improvement in adjusted EBITDA, which stood at $7.6 million, enhancing by $1.6 million compared to the fourth quarter of 2024. Free cash flow was reported at approximately $4.9 million, marking an increase of $1.5 million from the same quarter last year. Despite global tariff uncertainties, Stoneridge managed to mitigate potential impacts through strategic supply chain adjustments, with approximately 91% of its Mexico-produced sales remaining tariff-exempt under USMCA. The company maintains its full-year guidance, anticipating continued growth propelled by strategic initiatives and product launches.

Stoneridge Financial Statement Overview

Summary
The company's financial performance shows mixed results. While there is a significant improvement in gross profit margin, the net profit margin remains negative, indicating ongoing challenges with profitability. The balance sheet is stable with low leverage, and cash flow has improved. However, negative revenue growth and ROE highlight the company's struggles in generating shareholder value.
Income Statement
45
Neutral
The company shows a declining revenue trend with inconsistent profitability. Gross profit margin improved significantly in TTM at 40.44% compared to the previous year, but net profit margin remains negative at -1.98%. Revenue growth is negative, indicating a decrease in sales. The EBIT margin is also negative, showing challenges in operational profitability.
Balance Sheet
60
Neutral
The balance sheet reflects moderate stability with a debt-to-equity ratio of 0.02, indicating low leverage, but the company holds a strong equity position relative to assets, with an equity ratio of 105.74%. Return on equity is negative, showing challenges in generating returns for shareholders.
Cash Flow
55
Neutral
The company has shown improvement in free cash flow, with a positive growth rate compared to previous periods. The operating cash flow to net income ratio is positive, indicating good cash generation relative to net income. However, the free cash flow to net income ratio is negative, highlighting ongoing financial challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue887.03M908.29M975.82M899.92M770.46M648.01M
Gross Profit187.19M189.25M202.10M174.93M166.86M154.20M
EBITDA25.18M-381.00K45.06M30.25M50.18M27.68M
Net Income-17.59M-16.52M-5.18M-14.06M3.41M-7.95M
Balance Sheet
Total Assets670.74M621.56M679.90M652.11M665.40M621.41M
Cash, Cash Equivalents and Short-Term Investments35.16M71.83M40.84M54.80M85.55M73.92M
Total Debt178.89M208.06M203.01M179.85M184.12M159.11M
Total Liabilities394.50M376.30M392.18M371.16M369.45M324.77M
Stockholders Equity276.24M245.26M287.72M280.94M295.95M296.63M
Cash Flow
Free Cash Flow24.96M23.45M-33.55M-24.80M-63.28M-3.82M
Operating Cash Flow49.54M47.75M4.95M6.81M-36.25M28.64M
Investing Cash Flow-24.74M-24.47M-36.98M-28.58M28.04M-33.88M
Financing Cash Flow4.95M11.12M17.48M-7.30M22.88M6.51M

Stoneridge Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.97
Price Trends
50DMA
5.34
Positive
100DMA
4.98
Positive
200DMA
6.27
Positive
Market Momentum
MACD
0.61
Negative
RSI
80.66
Negative
STOCH
96.38
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SRI, the sentiment is Positive. The current price of 7.97 is above the 20-day moving average (MA) of 6.37, above the 50-day MA of 5.34, and above the 200-day MA of 6.27, indicating a bullish trend. The MACD of 0.61 indicates Negative momentum. The RSI at 80.66 is Negative, neither overbought nor oversold. The STOCH value of 96.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SRI.

Stoneridge Risk Analysis

Stoneridge disclosed 28 risk factors in its most recent earnings report. Stoneridge reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Stoneridge Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$291.68M14.149.91%5.54%398.82%
65
Neutral
$240.81M-7.17%5.53%60.54%
64
Neutral
kr11.54B16.5710.84%9.89%2.66%5.01%
60
Neutral
$126.11M4.388.05%18.33%-26.25%
60
Neutral
$126.11M4.388.05%18.33%-26.25%
SRSRI
58
Neutral
$221.93M-6.63%-8.90%-346.80%
52
Neutral
$68.58M1.82-26.02%-23.78%-179.48%
41
Neutral
$4.57M-80.07%-3.63%36.19%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SRI
Stoneridge
7.97
-6.69
-45.63%
CAAS
China Automotive Systems
4.18
1.22
41.22%
CAAS
China Automotive Systems
4.18
1.22
41.22%
CVGI
Commercial Vehicle Group
1.98
-2.75
-58.14%
MPAA
Motorcar Parts Of America
12.39
6.51
110.71%
STRT
Strattec Security
69.98
46.13
193.42%
SSUP
Superior Industries International
0.15
-2.97
-95.19%

Stoneridge Corporate Events

Executive/Board ChangesShareholder Meetings
Stoneridge Shareholders Approve 2025 Incentive Plan
Neutral
May 14, 2025

Stoneridge held its Annual Meeting of Shareholders on May 13, 2025, where shareholders approved the 2025 Long-Term Incentive Plan, authorizing 726,000 common shares for eligible participants. Additionally, seven nominees were elected to the Board of Directors for one-year terms, Ernst & Young LLP was ratified as the independent public accounting firm for 2025, and a non-binding advisory resolution on 2024 executive compensation was approved.

The most recent analyst rating on (SRI) stock is a Buy with a $27.50 price target. To see the full list of analyst forecasts on Stoneridge stock, see the SRI Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Stoneridge Reports Q1 2025 Financial Results
Neutral
Apr 30, 2025

Stoneridge reported its financial results for the first quarter of 2025, with sales of $217.9 million and a net loss of $7.2 million. The company achieved record sales for its MirrorEye and SMART 2 products, despite challenges in production volumes in certain markets. The company maintained its full-year 2025 guidance, highlighting improvements in operating margins and cash flow management. Stoneridge continues to address tariff impacts and supply chain complexities, ensuring compliance with financial leverage ratios.

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: Jul 02, 2025