NasdaqGS:MTSC

Stock Analysis Report

Executive Summary

MTS Systems Corporation supplies test systems, motion simulators, and sensors in the Americas, Europe, and Asia.

Rewards

Earnings are forecast to grow 17.78% per year

Pays a reliable dividend of 2.72%

Risk Analysis

Debt is not well covered by operating cash flow

Highly volatile share price over past 3 months

Large one-off items impacting financial results



Snowflake Analysis

Average dividend payer with limited growth.


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Share Price & News

How has MTS Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MTSC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.1%

MTSC

-2.3%

US Electronic

0.06%

US Market


1 Year Return

-18.7%

MTSC

7.7%

US Electronic

19.4%

US Market

Return vs Industry: MTSC underperformed the US Electronic industry which returned 7.7% over the past year.

Return vs Market: MTSC underperformed the US Market which returned 19.4% over the past year.


Shareholder returns

MTSCIndustryMarket
7 Day-2.1%-2.3%0.06%
30 Day-14.2%-6.2%1.1%
90 Day-23.9%1.1%8.9%
1 Year-16.8%-18.7%8.8%7.7%21.9%19.4%
3 Year-14.4%-20.1%34.4%30.8%48.9%39.3%
5 Year-31.5%-38.7%66.6%58.5%71.9%53.1%

Price Volatility Vs. Market

How volatile is MTS Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is MTS Systems undervalued compared to its fair value and its price relative to the market?

22.49x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MTSC ($44.18) is trading above our estimate of fair value ($23.06)

Significantly Below Fair Value: MTSC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MTSC is poor value based on its PE Ratio (22.4x) compared to the Electronic industry average (19.6x).

PE vs Market: MTSC is poor value based on its PE Ratio (22.4x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: MTSC is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: MTSC is good value based on its PB Ratio (1.7x) compared to the US Electronic industry average (1.9x).


Next Steps

Future Growth

How is MTS Systems forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

16.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTSC's forecast earnings growth (17.8% per year) is above the savings rate (1.7%).

Earnings vs Market: MTSC's earnings (17.8% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: MTSC's earnings are forecast to grow, but not significantly.

Revenue vs Market: MTSC's revenue (7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MTSC's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MTSC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has MTS Systems performed over the past 5 years?

2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MTSC has a large one-off loss of $41.2M impacting its December 28 2019 financial results.

Growing Profit Margin: MTSC's current net profit margins (4.2%) are lower than last year (4.9%).


Past Earnings Growth Analysis

Earnings Trend: MTSC's earnings have grown by 2.9% per year over the past 5 years.

Accelerating Growth: MTSC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MTSC had negative earnings growth (-2.7%) over the past year, making it difficult to compare to the Electronic industry average (14.6%).


Return on Equity

High ROE: MTSC's Return on Equity (7.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is MTS Systems's financial position?


Financial Position Analysis

Short Term Liabilities: MTSC's short term assets ($460.8M) exceed its short term liabilities ($270.4M).

Long Term Liabilities: MTSC's short term assets ($460.8M) do not cover its long term liabilities ($570.2M).


Debt to Equity History and Analysis

Debt Level: MTSC's debt to equity ratio (110.6%) is considered high.

Reducing Debt: MTSC's debt to equity ratio has increased from 25.6% to 110.6% over the past 5 years.

Debt Coverage: MTSC's debt is not well covered by operating cash flow (10.6%).

Interest Coverage: MTSC's interest payments on its debt are well covered by EBIT (3.5x coverage).


Balance Sheet

Inventory Level: MTSC has a high level of physical assets or inventory.

Debt Coverage by Assets: MTSC's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is MTS Systems's current dividend yield, its reliability and sustainability?

2.71%

Current Dividend Yield


Upcoming Dividend Payment

Purchase MTS Systems before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.7%marketbottom25%1.4%markettop25%3.7%industryaverage1.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: MTSC's dividend (2.72%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: MTSC's dividend (2.72%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

Stable Dividend: MTSC's dividends per share have been stable in the past 10 years.

Growing Dividend: MTSC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (61%), MTSC's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Jeff Graves (58yo)

7.8yrs

Tenure

US$3,192,678

Compensation

Dr. Jeffrey A. Graves, also known as Jeff, Ph.D., has been the President and Chief Executive Officer of MTS Systems Corporation since May 7, 2012 and a Director since 2012. Dr. Graves served as the Preside ...


CEO Compensation Analysis

Compensation vs Market: Jeff's total compensation ($USD3.19M) is about average for companies of similar size in the US market ($USD2.50M).

Compensation vs Earnings: Jeff's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jeffrey Graves
President7.8yrsUS$3.19m0.34% $2.9m
Brian Ross
Executive VP & CFO2.8yrsUS$1.08m0.021% $174.3k
David Hore
Executive VP & President of Sensors0.6yrsUS$912.88k0.20% $1.7m
Steven Harrison
Executive VP and President of Test & Simulation3yrsUS$1.56m0.033% $276.7k
Mark Losee
Senior VP & Chief Information Officer7.4yrsno datano data
Andrew Cebulla
Director of Investor Relations & Treasurer0yrsno datano data
Phyllis Nordstrom
Senior VP and Chief Risk & Compliance Officer2.9yrsno datano data
Todd Klemmensen
Senior VP1.6yrsno data0.013% $112.1k
Amanda Daniel
Senior VP & Chief Human Resources Officer0yrsno datano data

2.9yrs

Average Tenure

53yo

Average Age

Experienced Management: MTSC's management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jeffrey Graves
President7.8yrsUS$3.19m0.34% $2.9m
David Johnson
Independent Director6.7yrsUS$223.82k0.044% $376.7k
Randy Martinez
Independent Director5.9yrsUS$199.49k0.047% $399.7k
David Anderson
Independent Chairman of the Board8.5yrsUS$288.06k0.10% $859.9k
Michael Schrock
Independent Director5.9yrsUS$204.08k0.099% $842.3k
Nancy Altobello
Independent Director0.8yrsUS$152.76kno data
Linda Zukauckas
Independent Director0.8yrsUS$151.10k0.023% $194.7k
Chun Yu
Independent Director6.7yrsUS$186.99k0.11% $932.8k

6.3yrs

Average Tenure

63.5yo

Average Age

Experienced Board: MTSC's board of directors are considered experienced (6.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MTSC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

MTS Systems Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: MTS Systems Corporation
  • Ticker: MTSC
  • Exchange: NasdaqGS
  • Founded: 1966
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: US$849.151m
  • Shares outstanding: 19.19m
  • Website: https://www.mts.com

Number of Employees


Location

  • MTS Systems Corporation
  • 14000 Technology Drive
  • Eden Prairie
  • Minnesota
  • 55344
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MTSCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1969
MT7DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969

Biography

MTS Systems Corporation supplies test systems, motion simulators, and sensors in the Americas, Europe, and Asia. The company’s Test & Simulation segment offers road simulators and component test systems, vehicle performance test systems, vehicle dynamics simulators, electrical motors and energy recovery systems, tire performance and rolling resistance measurement systems, and moving ground-plane systems and balances. It also provides systems for the physical characterization of material properties; systems to test durability and performance of implants, prostheses, and other medical and dental materials and devices; products, systems, and software to perform static and fatigue testing of aircraft; products for blades, bearings, and wind turbines; structural engineering systems, such as static and dynamic testing; and seismic simulation tables. In addition, this segment offers installation, product life cycle management, professional training, calibration and metrology, technical consulting, and onsite and factory repair and maintenance services, as well as accessories and spare parts. It serves automobile, truck, motorcycle, motorsports vehicles, construction and agricultural equipment, rail and off-road vehicle manufacturers, and their suppliers, as well as the power generation, aerospace, vehicles, biomedical, structural engineering, oil and gas, wind energy, and other industries. The company’s Sensors segment offers sensors for measurements of vibration, pressure, position, force, and sound; and piezoelectric sensors and components. It serves the automotive, aerospace, industrial, defense, and research and development markets. The company sells its products through direct sales and service organizations, and independent representatives and distributors, as well as through catalogs, Internet, etc. It has a strategic alliance with Auburn University. The company was founded in 1966 and is headquartered in Eden Prairie, Minnesota. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:45
End of Day Share Price2020/02/19 00:00
Earnings2019/12/28
Annual Earnings2019/09/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.