Methode Electronics (NYSE:MEI) - Share price, News & Analysis

Q: What is the Fair Price of MEI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

MEI ($36.71) is trading below our estimate of [[fair value]] ($41.22)

MEI fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	2/6
Financial Health	5/6
Dividends	4/6

MEI Stock Overview

Methode Electronics, Inc. designs, engineers, and produces mechatronic products worldwide.

Rewards

Trading at 10.9% below our estimate of its fair value

Earnings are forecast to grow 14.26% per year

Risk Analysis

No risks detected for MEI from our risk checks.

Methode Electronics Competitors

TTM Technologies

NasdaqGS:TTMI

US$1.2b

Plexus

NasdaqGS:PLXS

US$2.2b

Benchmark Electronics

NYSE:BHE

US$777.5m

Sanmina

NasdaqGS:SANM

US$2.5b

Price History & Performance

Summary of all time highs, changes and price drops for Methode Electronics
Historical stock prices
Current Share Price	US$36.71
52 Week High	US$50.20
52 Week Low	US$36.17
Beta	1.08
1 Month Change	-17.41%
3 Month Change	-14.63%
1 Year Change	-25.87%
3 Year Change	29.35%
5 Year Change	-9.47%
Change since IPO	1,857.87%

Recent News & Updates

Jun 23

Methode Electronics GAAP EPS of $0.43 beats by $0.01, revenue of $288.7M misses by $0.52M, guides EPS and revenue above the consensus

Methode Electronics press release (NYSE:MEI): Q4 GAAP EPS of $0.43 beats by $0.01. Revenue of $288.7M (-4.1% Y/Y) misses by $0.52M. Fiscal 2023 Full Year Guidance: For the fiscal year 2023, the company expects net sales to be in the range of $1,160 to $1,210 million vs consensus of $1.16B. Diluted earnings per share is expected to be in a range of $2.70 to $3.10 vs consensus of $2.69.

Jun 20

Methode Electronics (NYSE:MEI) Is Due To Pay A Dividend Of US$0.14

The board of Methode Electronics, Inc. ( NYSE:MEI ) has announced that it will pay a dividend of US$0.14 per share on...

Shareholder Returns

	MEI	US Electronic	US Market
7D	-3.5%	-3.8%	-2.5%
1Y	-25.9%	-23.8%	-21.2%

Return vs Industry: MEI underperformed the US Electronic industry which returned -23.2% over the past year.

Return vs Market: MEI underperformed the US Market which returned -21.7% over the past year.

Price Volatility

Is MEI's price volatile compared to industry and market?
MEI volatility
MEI Average Weekly Movement	5.2%
Electronic Industry Average Movement	7.6%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: MEI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MEI's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1946	7,000	Don Duda	https://www.methode.com

Methode Electronics, Inc. designs, engineers, and produces mechatronic products worldwide. It operates through four segments: Automotive, Industrial, Interface, and Medical. The Automotive segment supplies electronic and electro-mechanical devices, and related products to automobile original equipment manufacturers directly or through their tiered suppliers.

Methode Electronics Fundamentals Summary

How do Methode Electronics's earnings and revenue compare to its market cap?
MEI fundamental statistics
Market Cap	US$1.41b
Earnings (TTM)	US$102.20m
Revenue (TTM)	US$1.16b

13.8x

P/E Ratio

1.2x

P/S Ratio

Is MEI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MEI income statement (TTM)
Revenue	US$1.16b
Cost of Revenue	US$897.40m
Gross Profit	US$266.20m
Other Expenses	US$164.00m
Earnings	US$102.20m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.67
Gross Margin	22.88%
Net Profit Margin	8.78%
Debt/Equity Ratio	23.0%

How did MEI perform over the long term?

See historical performance and comparison

Dividends

1.5%

Current Dividend Yield

20%

Payout Ratio

Does MEI pay a reliable dividends?

See MEI dividend history and benchmarks

When do you need to buy MEI by to receive an upcoming dividend?
Methode Electronics dividend dates
Ex Dividend Date	Jul 14 2022
Dividend Pay Date	Jul 29 2022
Days until Ex dividend	11 days
Days until Dividend pay date	26 days

Does MEI pay a reliable dividends?

See MEI dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is MEI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MEI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MEI. This is calculated by dividing MEI's market cap by their current preferred multiple.
What is MEI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.41b

MEI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.3x
Enterprise Value/EBITDA	8.6x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does MEI's PE Ratio compare to its peers?

MEI PE Ratio vs Peers

The above table shows the PE ratio for MEI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	16.2x
TTMI TTM Technologies	16.5x	13.2%	US$1.2b
PLXS Plexus	19.4x	22.1%	US$2.2b
BHE Benchmark Electronics	20x	24.9%	US$777.5m
SANM Sanmina	8.7x	-5.2%	US$2.5b
MEI Methode Electronics	13.8x	14.3%	US$1.4b

Forward PE

Price-To-Earnings vs Peers: MEI is good value based on its Price-To-Earnings Ratio (13.8x) compared to the peer average (16.2x).

Price to Earnings Ratio vs Industry

How does MEI's PE Ratio compare vs other companies in the US Electronic Industry?

Price-To-Earnings vs Industry: MEI is good value based on its Price-To-Earnings Ratio (13.8x) compared to the US Electronic industry average (16.5x)

Price to Earnings Ratio vs Fair Ratio

What is MEI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MEI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.8x
Fair PE Ratio	18.6x

Price-To-Earnings vs Fair Ratio: MEI is good value based on its Price-To-Earnings Ratio (13.8x) compared to the estimated Fair Price-To-Earnings Ratio (18.6x).

Share Price vs Fair Value

What is the Fair Price of MEI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MEI ($36.71) is trading below our estimate of fair value ($41.22)

Significantly Below Fair Value: MEI is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: MEI is good value based on its PEG Ratio (1x)

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Future Growth

How is Methode Electronics forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

14.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MEI's forecast earnings growth (14.3% per year) is above the savings rate (1.9%).

Earnings vs Market: MEI's earnings (14.3% per year) are forecast to grow faster than the US market (13.6% per year).

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

Revenue vs Market: MEI's revenue (4.8% per year) is forecast to grow slower than the US market (8.2% per year).

High Growth Revenue: MEI's revenue (4.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MEI's Return on Equity is forecast to be low in 3 years time (13.1%).

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Past Performance

How has Methode Electronics performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

11.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MEI has high quality earnings.

Growing Profit Margin: MEI's current net profit margins (8.8%) are lower than last year (11.3%).

Past Earnings Growth Analysis

Earnings Trend: MEI's earnings have grown by 11.9% per year over the past 5 years.

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

Earnings vs Industry: MEI had negative earnings growth (-16.4%) over the past year, making it difficult to compare to the Electronic industry average (33.9%).

Return on Equity

High ROE: MEI's Return on Equity (11.2%) is considered low.

Discover strong past performing companies

Financial Health

How is Methode Electronics's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MEI's short term assets ($629.0M) exceed its short term liabilities ($188.6M).

Long Term Liabilities: MEI's short term assets ($629.0M) exceed its long term liabilities ($286.7M).

Debt to Equity History and Analysis

Debt Level: MEI's net debt to equity ratio (4.2%) is considered satisfactory.

Reducing Debt: MEI's debt to equity ratio has increased from 5.1% to 23% over the past 5 years.

Debt Coverage: MEI's debt is well covered by operating cash flow (46.9%).

Interest Coverage: MEI's interest payments on its debt are well covered by EBIT (33.9x coverage).

Balance Sheet

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Dividend

What is Methode Electronics's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.53%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: MEI's dividend (1.53%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.61%).

High Dividend: MEI's dividend (1.53%) is low compared to the top 25% of dividend payers in the US market (4.3%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (20.4%), MEI's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (35.3%), MEI's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

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

3.9yrs

Average management tenure

CEO

Don Duda (67 yo)

21.33yrs

Tenure

US$13,331,554

Compensation

Mr. Donald W. Duda, also known as Don, has been the Chief Executive Officer of Methode Electronics, Inc. since May 1, 2004 and its President and Director since February 2001. Mr. Duda served as Vice Presid...

CEO Compensation Analysis

Compensation vs Market: Don's total compensation ($USD13.33M) is above average for companies of similar size in the US market ($USD5.57M).

Compensation vs Earnings: Don's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: MEI's management team is considered experienced (3.9 years average tenure).

Board Members

Experienced Board: MEI's board of directors are considered experienced (3 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: Insufficient data to determine if 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.

Data	Last Updated (UTC time)
Company Analysis	2022/07/01 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/04/30
Annual Earnings	2022/04/30