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Strattec Security Corp. (STRT)
NASDAQ:STRT
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Strattec Security
(NASDAQ:STRT)
Rating:78Outperform
Price Target:
$74.00
▼(-2.49% Downside)
Strattec Security (STRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$314.11M
Dividend YieldN/A
Average Volume (3M)104.22K
Price to Earnings (P/E)16.6
Beta (1Y)1.39
Revenue Growth5.54%
EPS Growth398.82%
CountryUS
Employees3,365
SectorConsumer Cyclical
Sector Strength75
IndustryAuto - Parts
Share Statistics
EPS (TTM)2.06
Shares Outstanding4,168,104
10 Day Avg. Volume150,043
30 Day Avg. Volume104,221
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.63
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit2.56
Enterprise Value/Ebitda5.62
Forecast
1Y Price Target
$74.00Price Target Upside-2.49% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Strattec Security Business Overview & Revenue Model
Company DescriptionStrattec Security Corporation designs, develops, manufactures, and markets automotive access control products under the VAST Automotive Group brand primarily in North America. The company offers mechanical and electronically enhanced locks and keys, passive entry passive start systems, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power tailgate and lift gate systems, power deck lid systems, door handles, and related products. It also provides full service and aftermarket support services for its products. The company markets its products to automotive and light truck original equipment manufacturers, as well as other transportation-related manufacturers; and through wholesale distributors, other marketers, and users of component parts, as well as certain products to non-automotive commercial customers. It also exports its products to Europe, South America, Korea, China, and India. Strattec Security Corporation was founded in 1908 and is headquartered in Milwaukee, Wisconsin.
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
(Q3-2025)
| % Change Since: 0.70%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with significant cash generation, margin expansion, and strategic execution. Despite increased tariff costs and operational expenses, the company effectively mitigated risks and continued to focus on operational improvements and cost management.Q3-2025 Updates
Positive Updates
Strong Cash Generation and Financial Position
Generated nearly $21 million in cash from operations in the third quarter, bringing the year-to-date total to $41.5 million. Maintained over $60 million in cash with limited borrowings, offering financial flexibility.
Significant Margin Expansion
Year-over-year gross margin expanded by 560 basis points, and sequentially by 280 basis points, reflecting improved earnings and cost management.
Substantial Increase in Net Income
Net income of $1.32 per diluted share, a more than three-fold increase from the previous year's third quarter.
Successful Strategic Pricing and Operational Improvements
Adjusted EBITDA increased to $12.9 million, representing 9% of sales, up from 4.4% in the prior year.
Proactive Tariff Mitigation Efforts
Mitigated about 30% of the $9-12 million tariff impact and engaged in pricing discussions and logistical adjustments to offset costs.
Negative Updates
Increased Tariff Costs
Faced $800,000 of additional tariff expenses due to U.S. trade policy changes, impacting financial results.
Higher Operational Expenses
Engineering, selling, and administrative expenses rose to $16 million, up $3.3 million from the prior year, due to investments in transformation initiatives.
Ongoing Tariff and Industry Volume Uncertainties
Continued macro uncertainty, including tariffs and industry volume pressures, could impact future performance.
Company Guidance
During the STRATTEC third quarter fiscal year 2025 conference call, the company reported generating nearly $21 million in cash from operations in the quarter, contributing to a year-to-date total of $41.5 million. The company achieved a notable gross margin expansion of 560 basis points year-over-year, and a sequential margin increase of 280 basis points, driven by strategic pricing actions and operational improvements. Net income per diluted share rose over three-fold from the previous year to $1.32, with adjusted EBITDA reaching $12.9 million, representing 9% of sales, up from 4.4% in the prior-year period. The restructuring of operations in Mexico and Milwaukee is expected to yield annualized savings of approximately $5 million. STRATTEC is actively mitigating the potential $9 million to $12 million cost impact from new U.S. tariffs, having already offset 30% and pursuing further commercial recoveries. The company’s cash position stands robust at $62.1 million, with significant liquidity available under its revolving credit facilities. STRATTEC continues to focus on operational efficiencies and organic growth, while exercising caution in capital allocation amidst market uncertainties.Strattec Security Financial Statement Overview
Summary
Strattec Security exhibits a commendable financial position with improving revenues and profitability, a debt-free balance sheet, and strong cash flows. The company is well-positioned for future growth with efficient cost management and liquidity. While the slight decline in the EBITDA margin and total assets warrants monitoring, the overall financial health is strong.Income Statement
Strattec Security's income statement shows solid growth, with revenue increasing from $492.9M in 2023 to $552.8M in TTM (Trailing-Twelve-Months), a growth rate of 12.13%. The gross profit margin improved to 12.54%, indicating efficient production cost management. The net profit margin turned positive to 2.92% after a previous loss, reflecting improved profitability. However, the EBITDA margin decreased slightly from 7.01% to 4.67%, suggesting rising operating expenses.75
Positive
Balance Sheet
The balance sheet is robust, with a strong equity position, as shown by an equity ratio of 58.39%. The company has no debt, reducing financial risk, and a healthy return on equity of 7.89%. The increase in cash reserves enhances liquidity, supporting future investments and operations. However, the total assets decreased slightly, which could be a potential concern if it continues.80
Positive
Cash Flow
Strattec's cash flow is strong, with free cash flow increasing significantly to $31.58M from $2.48M annually, a growth rate of 1172.58%. The operating cash flow to net income ratio is robust at 2.47, indicating strong cash conversion. The company effectively manages its capital expenditures, enhancing free cash flow, which supports financial stability and growth opportunities.85
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 537.77M | 492.95M | 452.26M | 485.30M | 385.30M |
| Gross Profit | 65.47M | 42.15M | 56.02M | 78.66M | 35.45M |
| EBITDA | 37.65M | 10.78M | 28.86M | 55.10M | 12.13M |
| Net Income | 16.31M | -6.67M | 7.02M | 22.53M | -5.86M |
Balance Sheet | |||||
| Total Assets | 364.29M | 340.93M | 318.68M | 310.56M | 265.55M |
| Cash, Cash Equivalents and Short-Term Investments | 25.41M | 20.57M | 8.77M | 14.46M | 11.77M |
| Total Debt | 13.00M | 13.00M | 11.00M | 12.00M | 35.00M |
| Total Liabilities | 138.67M | 129.91M | 98.27M | 97.13M | 90.10M |
| Stockholders Equity | 200.54M | 184.96M | 188.87M | 181.65M | 152.22M |
Cash Flow | |||||
| Free Cash Flow | 2.48M | -7.28M | -3.75M | 26.22M | 13.04M |
| Operating Cash Flow | 12.27M | 10.10M | 10.44M | 35.15M | 25.42M |
| Investing Cash Flow | -7.79M | 8.90M | -14.33M | -9.02M | -12.35M |
| Financing Cash Flow | 72.00K | -7.44M | -1.89M | -22.89M | -8.99M |
Strattec Security Technical Analysis
Positive
75.89
Price Trends
63.82
Positive
52.71
Positive
47.39
Positive
Market Momentum
4.05
Negative
64.58
Neutral
74.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRT, the sentiment is Positive. The current price of 75.89 is above the 20-day moving average (MA) of 68.09, above the 50-day MA of 63.82, and above the 200-day MA of 47.39, indicating a bullish trend. The MACD of 4.05 indicates Negative momentum. The RSI at 64.58 is Neutral, neither overbought nor oversold. The STOCH value of 74.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $314.11M | 16.61 | 8.85% | ― | 5.54% | 398.82% | |
69 Neutral | $124.45M | 4.24 | 8.05% | ― | 18.33% | -26.25% | |
68 Neutral | $274.80M | 175.03 | 0.63% | ― | 6.59% | ― | |
61 Neutral | C$4.66B | 7.05 | 13.40% | 3.62% | 3.17% | 3.09% | |
58 Neutral | $227.13M | ― | -11.20% | ― | -6.99% | -1688.02% | |
49 Neutral | $109.20M | ― | -13.49% | ― | 3.21% | -6985.88% | |
43 Neutral | $2.46M | ― | -80.07% | ― | -8.31% | -56.03% |
* Consumer Cyclical Sector Average
Performance Comparison
STRT
Strattec Security
75.89
36.13
90.87%
CAAS
China Automotive Systems
4.06
0.37
10.03%
KNDI
Kandi Technologies
1.28
-0.48
-27.27%
MPAA
Motorcar Parts Of America
13.74
7.67
126.36%
SRI
Stoneridge
7.86
-6.03
-43.41%
SSUP
Superior Industries International
0.08
-3.52
-97.78%
Strattec Security Corporate Events
Business Operations and StrategyFinancial Disclosures
Strattec Security Reports Strong Q3 2025 Financial Results
Positive
May 8, 2025
On May 8, 2025, STRATTEC Security Corporation announced its financial results for the third quarter of fiscal year 2025, ending March 30, 2025. The company generated $20.7 million in cash from operations and reported a net income of $5.4 million, a significant increase from the previous year. The company also highlighted its efforts in cost reduction, including restructuring operations in Mexico and Milwaukee, which are expected to generate $5 million in annual savings. Despite challenges from tariffs, STRATTEC is implementing mitigation strategies and focusing on operational excellence to enhance earnings power.
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.