Methode Electronics Inc

MEI

Electronic Connectors

Mkt Cap

$432.9M

PE

-7.48

Debt

$331.5M

Cash

$122.9M

EV

$641.5M

FCF

$19.3M

Market Cap

$432.9M

P/E Ratio

-7.48

Debt

$331.5M

Cash

$122.9M

EV

$641.5M

FCF

$19.3M

Charts data: {"Earnings":[{"time":"2015-05-01","value":101000000},{"time":"2016-04-29","value":84600000},{"time":"2017-04-28","value":92900000},{"time":"2018-04-27","value":57200000},{"time":"2019-04-26","value":91600000},{"time":"2020-05-01","value":123400000},{"time":"2021-04-30","value":122300000},{"time":"2022-04-29","value":102200000},{"time":"2023-04-28","value":77100000}],"Sales":[{"time":"2015-05-01","value":881100000},{"time":"2016-04-29","value":809100000},{"time":"2017-04-28","value":816500000},{"time":"2018-04-27","value":908300000},{"time":"2019-04-26","value":1000300000},{"time":"2020-05-01","value":1023900000},{"time":"2021-04-30","value":1088000000},{"time":"2022-04-29","value":1163600000},{"time":"2023-04-28","value":1179600000}],"Net Margins":[{"time":"2015-05-01","value":0.1146294404721371},{"time":"2016-04-29","value":0.10456062291434928},{"time":"2017-04-28","value":0.11377832210655235},{"time":"2018-04-27","value":0.06297478806561708},{"time":"2019-04-26","value":0.09157252824152755},{"time":"2020-05-01","value":0.12051958199042875},{"time":"2021-04-30","value":0.11240808823529412},{"time":"2022-04-29","value":0.08783086971467859},{"time":"2023-04-28","value":0.06536113936927772}],"Assets":[{"time":"2015-05-01","value":605800000},{"time":"2016-04-29","value":655900000},{"time":"2017-04-28","value":704000000},{"time":"2018-04-27","value":915900000},{"time":"2019-04-26","value":1231700000},{"time":"2020-05-01","value":1370600000},{"time":"2021-04-30","value":1467000000},{"time":"2022-04-29","value":1389100000},{"time":"2023-04-28","value":1579100000}],"Stockholders Equity":[{"time":"2015-05-01","value":459000000},{"time":"2016-04-29","value":470100000},{"time":"2017-04-28","value":541100000},{"time":"2018-04-27","value":630000000},{"time":"2019-04-26","value":689700000},{"time":"2020-05-01","value":783400000},{"time":"2021-04-30","value":918000000},{"time":"2022-04-29","value":913800000},{"time":"2023-04-28","value":941800000}],"ROE":[{"time":"2015-05-01","value":0.22004357298474944},{"time":"2016-04-29","value":0.1799617102744097},{"time":"2017-04-28","value":0.17168730364073184},{"time":"2018-04-27","value":0.09079365079365079},{"time":"2019-04-26","value":0.13281136726112802},{"time":"2020-05-01","value":0.15751850906305848},{"time":"2021-04-30","value":0.1332244008714597},{"time":"2022-04-29","value":0.11184066535346902},{"time":"2023-04-28","value":0.08186451475897218}],"ROA":[{"time":"2015-05-01","value":0.18520964014526245},{"time":"2016-04-29","value":0.1672511053514255},{"time":"2017-04-28","value":0.15738636363636363},{"time":"2018-04-27","value":0.1351675947155803},{"time":"2019-04-26","value":0.08670942599659008},{"time":"2020-05-01","value":0.10849263096454108},{"time":"2021-04-30","value":0.09195637355146558},{"time":"2022-04-29","value":0.0853070333309337},{"time":"2023-04-28","value":0.057247799379393324}]}

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. Its products include integrated center consoles, hidden switches, ergonomic switches, transmission lead-frames, and LED-based lighting and sensors, which incorporate magneto-elastic sensing and other technologies that monitor the operation or status of a component or system. The Industrial segment manufactures lighting solutions; industrial safety radio remote controls; braided flexible cables; current-carrying laminated busbars and devices; custom power-product assemblies, such as PowerRail solution; high-current low-voltage flexible power cabling systems; and powder-coated busbars that are used in various markets and applications comprising aerospace, cloud computing, commercial vehicles, industrial, military, power conversion, and transportation. The Interface segment provides various copper-based transceivers and related accessories for the cloud computing hardware equipment and telecommunications broadband equipment markets; user interface solutions for the appliance, commercial food service, and point-of-sale equipment markets; and fluid-level sensors for the marine/recreational vehicle and sump pump markets. The Medical segment offers Dabir Surfaces, a surface support technology aimed at pressure injury prevention for use by patients who are immobilized or otherwise at risk for pressure injuries, including patients undergoing long-duration surgical procedures. Methode Electronics, Inc. was incorporated in 1946 and is headquartered in Chicago, Illinois.

Sector

10-Q
7/29/23
10-K
4/29/23
10-Q
1/28/23
10-Q
10/29/22
10-Q
7/30/22
10-K
4/30/22
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1/29/22
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10/30/21
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7/31/21
10-K
5/1/21
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1/30/21
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10/31/20
10-Q
8/1/20
10-K
5/2/20
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10/26/19
10-Q
7/27/19
10-K
4/27/19
10-Q
1/26/19
10-Q
10/27/18
10-Q
7/28/18
10-K
4/28/18
10-Q
1/27/18

DCF

Discounted Cash Flow Valuation of Methode Electronics Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$19.3M	$18.29M	$17.33M	$16.43M	$15.57M	$14.75M	$13.98M	$13.25M	$12.56M	$11.9M	$11.28M	$112.8M
DCF		$15.91M	$13.11M	$10.8M	$8.902M	$7.336M	$6.045M	$4.982M	$4.106M	$3.383M	$2.788M	$27.88M
Value	$105.2M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 0.44%

Earnings Stability -16%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	05-2015	04-2016	04-2017	04-2018	04-2019	05-2020	04-2021	04-2022	04-2023	TTM
Net Margin	11%	10%	11%	6.3%	9.2%	12%	11%	8.8%	6.5%	-5.1%
ROA	19%	17%	16%	14%	8.7%	11%	9.2%	8.5%	5.7%	-2.8%
ROE	22%	18%	17%	9.1%	13%	16%	13%	11%	8.2%	-6.9%

What is the average Net Margin?

The average Net Margin over the past 5 years is +9.01%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.02%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +9.41%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.17%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +11.8%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.38%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	05-2015	04-2016	04-2017	04-2018	04-2019	05-2020	04-2021	04-2022	04-2023	TTM
Debt FCF	-	0.65	0.22	0.82	5.61	3.85	1.65	3.68	3.41	17.18
Debt Equity	0.01	0.12	0.05	0.09	0.42	0.47	0.28	0.24	0.33	0.40
MIN
Graham Stability	-	-	-	62%	100%	100%	100%	91%	66%	62%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 17.18.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.14.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.62.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	04-2016	04-2018	05-2020	04-2022	Trend
Revenue	5.5%	5.4%	4.8%	1.4%	0.88%
Net Income	-1.3%	6.2%	-15%	-25%	-1.2%
Stockholders Equity	10%	8.4%	6.3%	3.1%	-0.8%
FCF	0.53%	5.3%	-1.7%	49%	4.2%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +5.37%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.88%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +6.15%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -1.22%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +8.37%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.8%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +5.31%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +4.21%.