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Strattec Security Corp. (STRT)
NASDAQ:STRT
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Strattec Security
(NASDAQ:STRT)
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Rating:78Outperform
Price Target:
$77.00
▲(15.11% Upside)
Strattec Security's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. The technical analysis supports a bullish outlook, while the valuation remains reasonable. Despite some challenges, the company's strategic initiatives and operational improvements position it well for future growth.
Strattec Security (STRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$278.28M
Dividend YieldN/A
Average Volume (3M)82.98K
Price to Earnings (P/E)14.6
Beta (1Y)1.40
Revenue Growth5.08%
EPS Growth12.98%
CountryUS
Employees3,365
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)2.06
Shares Outstanding4,160,284
10 Day Avg. Volume59,215
30 Day Avg. Volume82,982
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.73
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit2.39
Enterprise Value/Ebitda5.00
Forecast
1Y Price Target
$77.00Price Target Upside15.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Strattec Security Business Overview & Revenue Model
Company DescriptionStrattec Security Corp (STRT) is a prominent manufacturer in the automotive industry, specializing in the design and production of mechanical and electronic locks, keys, and related access control products for global automotive Original Equipment Manufacturers (OEMs) and the aftermarket. The company's core products include vehicle locks and keys, ignition lock housings, and a range of access control systems, serving both the traditional automotive market and emerging technologies in vehicle access and security.
How the Company Makes MoneyStrattec Security generates revenue primarily through the sale of its access control products to automotive OEMs and the aftermarket. The company's key revenue streams include the production and sale of traditional mechanical locks and keys, electronic locking systems, and ignition lock housings. In addition to product sales, Strattec also earns from engineering and design services related to vehicle security systems, which are often integrated into larger projects with their OEM partners. Significant partnerships with major automotive manufacturers enhance Strattec's market reach and contribute to its earnings by ensuring a steady demand for its innovative security solutions. The company's focus on research and development allows it to adapt to evolving automotive technologies, further solidifying its revenue base.
Strattec Security Earnings Call Summary
Earnings Call Date:Aug 14, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call depicted a positive outlook with strong financial results and operational improvements. However, challenges such as tariff costs and dependency on North American market conditions were noted. Despite these challenges, the overall sentiment remains favorable with continued focus on transformation and growth.Q4-2025 Updates
Positive Updates
Strong Cash Generation
Strattec Security Corporation generated $30 million in cash from operations for the quarter and $71 million for the fiscal year, indicating strong cash flow management and operational efficiency.
Revenue Growth
Revenue grew by 6% in the fourth quarter and 5% for the fiscal year, driven by strategic pricing initiatives, higher demand, and favorable foreign currency exchange.
Gross Margin Expansion
The company achieved a gross margin expansion of 370 basis points for the quarter and 280 basis points for the year, aided by higher sales, restructuring efforts, and strategic pricing actions.
Operational Improvements
Implemented significant operational improvements, including a 15% reduction in headcount, improvements in working capital velocity, and adding critical talent throughout the organization.
Healthy Financial Position
The company ended the year with a cash position of $84.6 million and approximately $52 million available under revolving credit facilities.
Negative Updates
Tariff and Labor Cost Challenges
The company faced $1.6 million in net tariff expenses and higher labor costs in Mexico. Estimated annual cost increase from tariffs is between $5 million to $7 million.
Dependency on North American Market
The company's sales are closely tied to North American OEM production volumes, which are projected to decline by 5% to 6% for fiscal 2026.
One-Time Financial Benefits
Prior year's financial performance benefited from a one-time engineering cost recovery of $4.8 million, making current year-over-year profit comparisons challenging.
Company Guidance
In the fourth quarter and fiscal year-end 2025 call, Strattec Security Corporation reported several key metrics highlighting their strong financial performance and strategic progress. They achieved a 6% revenue growth in the quarter and 5% for the year, with significant contributions from strategic pricing initiatives and favorable foreign currency exchange. The company generated $30 million in cash from operations for the quarter and a record $71 million for the fiscal year, reflecting strong cash generation and improved working capital velocity. Gross margins expanded by 370 basis points in the quarter and 280 basis points for the year, bolstered by restructuring efforts and cost optimizations. The EBITDA margin reached 8.5% in the fourth quarter, up 220 basis points for the year, despite facing a tough comparator from a prior one-time engineering cost recovery. Looking to fiscal 2026, Strattec aims to sustain these improvements, leveraging their product expertise in digital key and power access to expand their customer base.Strattec Security Financial Statement Overview
Summary
Strattec Security demonstrates a positive financial trajectory with strong revenue growth and improved profitability margins. The balance sheet is solid, with low leverage and effective equity utilization. Cash flow generation has improved, though there is room for further enhancement.Income Statement
Strattec Security has shown consistent revenue growth over the past few years, with a notable increase in gross profit margin from 12.17% in 2024 to 14.97% in 2025. The net profit margin has also improved slightly, indicating better cost management. However, the EBIT and EBITDA margins, while positive, suggest room for improvement in operational efficiency.75
Positive
Balance Sheet
The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.036 in 2025, reflecting prudent financial management. Return on equity has improved to 8.43%, indicating effective use of shareholder funds. The equity ratio remains stable, suggesting a solid capital structure.80
Positive
Cash Flow
Strattec Security's cash flow performance has improved, with a significant increase in free cash flow growth of 21.50% in 2025. The operating cash flow to net income ratio is robust, indicating strong cash generation relative to earnings. However, the free cash flow to net income ratio suggests potential for further cash flow optimization.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 565.07M | 565.07M | 537.77M | 492.95M | 452.26M | 485.30M |
| Gross Profit | 84.58M | 84.58M | 65.47M | 42.15M | 56.02M | 78.66M |
| EBITDA | 40.41M | 40.41M | 37.65M | 10.78M | 28.86M | 55.10M |
| Net Income | 18.68M | 18.68M | 16.31M | -6.67M | 7.02M | 22.53M |
Balance Sheet | ||||||
| Total Assets | 391.45M | 391.45M | 364.29M | 340.93M | 318.68M | 310.56M |
| Cash, Cash Equivalents and Short-Term Investments | 84.58M | 84.58M | 25.41M | 20.57M | 8.77M | 14.46M |
| Total Debt | 8.00M | 8.00M | 13.00M | 13.00M | 11.00M | 12.00M |
| Total Liabilities | 145.02M | 145.02M | 138.67M | 129.91M | 98.27M | 97.13M |
| Stockholders Equity | 221.59M | 221.59M | 200.54M | 184.96M | 188.87M | 181.65M |
Cash Flow | ||||||
| Free Cash Flow | 64.52M | 64.52M | 2.48M | -7.28M | -3.75M | 26.22M |
| Operating Cash Flow | 71.68M | 71.68M | 12.27M | 10.10M | 10.44M | 35.15M |
| Investing Cash Flow | -7.16M | -7.16M | -7.79M | 8.90M | -14.33M | -9.02M |
| Financing Cash Flow | -4.94M | -4.94M | 72.00K | -7.44M | -1.89M | -22.89M |
Strattec Security Technical Analysis
Neutral
66.89
Price Trends
67.66
Negative
61.69
Positive
51.34
Positive
Market Momentum
0.18
Positive
46.91
Neutral
30.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRT, the sentiment is Neutral. The current price of 66.89 is below the 20-day moving average (MA) of 68.03, below the 50-day MA of 67.66, and above the 200-day MA of 51.34, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 46.91 is Neutral, neither overbought nor oversold. The STOCH value of 30.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STRT.
Strattec Security Risk Analysis
Strattec Security disclosed 25 risk factors in its most recent earnings report. Strattec Security reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Strattec Security Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $278.28M | 14.62 | 8.85% | ― | 5.08% | 12.98% | |
70 Outperform | $147.84M | 5.04 | 8.00% | ― | 17.08% | -18.03% | |
68 Neutral | $321.44M | 211.59 | 0.64% | ― | 6.59% | ― | |
53 Neutral | $210.89M | -7.01 | -11.42% | ― | -6.99% | -1688.02% | |
48 Neutral | $102.32M | -2.03 | -14.65% | ― | 3.21% | -6985.88% | |
43 Neutral | $3.30M | >-0.01 | -638.38% | ― | -8.31% | -56.03% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
STRT
Strattec Security
66.89
24.23
56.80%
CAAS
China Automotive Systems
4.90
0.30
6.52%
KNDI
Kandi Technologies
1.19
-0.87
-42.23%
MPAA
Motorcar Parts Of America
16.61
9.22
124.76%
SRI
Stoneridge
7.53
-3.66
-32.71%
SSUP
Superior Industries International
0.09
-2.95
-97.04%
Strattec Security Corporate Events
Business Operations and StrategyFinancial Disclosures
Strattec Security Reports Strong Q4 2025 Financial Results
Positive
Aug 14, 2025
On August 14, 2025, Strattec Security Corporation announced its financial results for the fourth quarter of fiscal year 2025, ending June 29, 2025. The company reported an increase in gross margin to 16.7% from 13.0% in the previous year, with net sales rising by 6.3% to $152.0 million. Strattec’s net income for the quarter was $8.3 million, and the company generated $30.2 million in cash from operations. The company also reduced its debt by $5 million, maintaining a strong cash position of $84.6 million. Despite facing market uncertainties, Strattec is focused on stabilizing operations, enhancing customer relationships, and improving its competitive position.
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.