Company Overview
Stoneridge, Inc. operates as a manufacturer and designer of engineered electrical and electronic systems, components, and modules serving the commercial, automotive, off-highway, and agricultural vehicle markets across North America, South America, Europe, and the Asia Pacific. The company functions within the Consumer Cyclical sector, specifically in the Auto Parts industry, positioning it as a supplier whose performance is intrinsically linked to global automotive production cycles and regional economic shifts. As of the latest data, the organization supports a workforce of 4,200 employees and holds a total market capitalization of $150.17 million. With annual revenue reaching $861.26 million, these valuation and revenue metrics indicate a mid-sized enterprise that maintains a significant operational footprint despite its relatively modest market cap compared to larger automotive component giants.
Financial Health
The company reported total revenue of $861.26 million over the trailing twelve months, yet this revenue generated a net income of -$102,835,000, highlighting a substantial gap that reveals a highly leveraged cost structure where operating expenses significantly outweigh gross profits. Despite the negative net income, the entity maintained a positive EBITDA of $21.93 million and generated free cash flow of $29.09 million, providing a degree of financial flexibility that allows for operational continuity even during periods of accounting losses. The gross margin stands at 20.2%, indicating that the company retains roughly one-fifth of revenue after direct production costs, while the operating margin of -3.9% and profit margin of -11.9% demonstrate that overhead and other expenses are consuming a large portion of the generated gross profit. On the balance sheet, Stoneridge holds $66.25 million in cash against $194.05 million in debt, resulting in a debt-to-equity ratio of 107.94, which characterizes the company as heavily leveraged rather than conservative. Liquidity is supported by a current ratio of 2.30, suggesting that current assets are more than twice the value of current liabilities, thereby indicating strong short-term liquidity to meet immediate obligations. However, the return on equity is -48.4% and the return on assets is -1.1%, metrics that reveal that management has not been effective at generating positive returns on shareholder equity or the total asset base in the recent period.
Valuation Assessment
The valuation profile presents a trailing P/E ratio of N/A due to the lack of earnings, while the forward P/E is 8.79, implying that the market is pricing the stock based on anticipated future earnings rather than current profitability. The price-to-book ratio is 0.84, indicating that the market values the company at a discount relative to its book value, suggesting a lack of market premium or potentially undervalued assets. Alternative valuation metrics include a price-to-sales ratio of 0.17 and an EV/EBITDA of 12.68, which suggest the stock is trading at a low multiple of revenue but reflects a higher multiple relative to cash earnings before interest, taxes, depreciation, and amortization. The stock has traded between a 52-week low of $3.54 and a 52-week high of $9.71, with the current price situated at 8.79 times the forward earnings, placing it in the lower half of its recent trading range relative to the highs. The beta of 1.46 indicates that the stock exhibits higher volatility than the broader market, moving 46% more than the benchmark index during periods of market fluctuation.
Growth & Income
Stoneridge, Inc. experienced a revenue growth of -6.0% year over year, while earnings growth is N/A due to the recent net loss, implying that the company is currently contracting in revenue without the cushion of earnings growth to buffer the impact. The company does not pay dividends, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, meaning the firm reinvests its cash flow and any remaining earnings into operations or debt reduction rather than distributing income to shareholders. This absence of dividend payments aligns with the need to preserve liquidity given the negative net income and high debt levels, prioritizing solvency over income generation for investors. The overall growth and income profile is characterized by revenue contraction and a complete absence of dividend income, reflecting a capital-intensive phase where the business focuses on operational stabilization rather than expansion or shareholder returns.