Methode Electronics Inc (MEI) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA below its 5-year median

Methode Electronics's EV/EBITDA of 10.3 is below its 5-year median of 10.8.

P/B below the industry

Methode Electronics's price-to-book of 0.67 is below the Electronic Components and Accessories median of 3.36.

Trading below fair value

The share price of $12.43 is below our fair value estimate of $25.81.

Margin of safety over 20%

The price is 51.8% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -4.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 1.4% over the last twelve months; the Electronic Components and Accessories median is 17.6%.

Guidance raised

Methode Electronics raised its Fiscal 2027 D&A outlook on Sep 2, 2026.

Gross margin improving

Gross margin was 19.8% over the last twelve months, against 15.8% a year earlier.

Return on equity under 15%

Return on equity was -5.4% over the last twelve months and averaged -1.8% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 0.3%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Methode Electronics's return on equity of -5.4% is below the Electronic Components and Accessories median of 5.0%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -3.5% over the last twelve months, against a 5-year average of -1.0%.

Net margin below the industry

Methode Electronics's net margin of -3.5% is below the Electronic Components and Accessories median of 3.0%.

High debt

Debt is 46.8% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 26.2% five years ago to 46.8%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 1.6% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 2.41 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.12; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Methode Electronics paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% yield is below the 4.6% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.9% or more; Methode Electronics yields 1.6%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.