MEI · sample dossier
Methode Electronics
65/100
OutdatedGenerated Aug 29, 2026 · 10:00 AM UTC · 69 days ago
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EquityMethode Electronics
Decision context
Recommendation
Driven by superior Momentum (100/100) and Growth (76/100) scores.
More going for it than against it — worth a closer look.
AlphaDog Fair Value
Executive thesis & key metrics
Executive Investment Thesis
Methode Electronics ($646.36M market cap) trades at a Price/Book of 0.95 and EV/EBITDA of 11.58 while generating $1.58 in free cash flow per share. The company demonstrated operating recovery with revenue growing 15.9% YoY and EPS growing 101.3% YoY, even as net margin remains negative at -3.5% with a P/E of -18.03. The primary risk is balance sheet pressure and capital structure dilution, highlighted by a 13.1% YoY increase in shares outstanding and an Altman Z-Score of 2.46 in the grey zone.
Key Metrics to Watch
What changed recently
No material changes found in the last 30 days.
Why this rating
Score 65 · Buy
Data through
OutdatedApr 30, 2026
Momentum 100/100 — price trend leads the profile.
Re-evaluate if
- Net margin falls below -2.8% (was -3.5%)
Trim / reconsider if
- ROA falls below 0.5% (was 0.7%)
- Net Margin < -3.5%
- Debt/Equity ratio increases above 0.52
These dollars come from our value estimate and help sketch entry and exit zones. They’re a guide, not a trade order.
A Calmer Look · Devil's Advocate
The consensus verdict to rate MEI as a Buy or balanced Draw dangerously confuses a short-term price squeeze with a structural business turnaround.
May be overlooked
Consensus ignores that an Altman Z-score of 2.46 combined with a Debt/Equity of 0.5 leaves MEI vulnerable if commercial vehicle and automotive launch cycles decelerate from the current 15.9% YoY revenue rate.
The 13.1% YoY surge in shares outstanding fundamentally offsets the purported value of $1.58 FCF per share by continuously diluting per-share claims on cash flow.
The Piotroski F-score of 5/9 signals stagnant fundamental quality despite the stock trading well above both MA50 and MA200 technical averages.
Expectations look stretched
Extrapolating a mere $0.01 quarterly EPS on $298.10M in revenue as proof of an operational turnaround while trailing net margin sits at -3.5% and P/E remains -18.0.
Treating a 101.8% 6-month share surge and 100/100 momentum score as fundamental validation rather than multiple expansion disconnected from a low 0.7% ROA.
Assuming sustained dividend stability and capital returns when gross margin is restricted to 19.9%.
Revenue growth YoY drops below 15.9%
Revenue growth YoY drops below 15.9%
Monitor These Triggers
3 Checkpoints · Next PrintRevenue Growth YoY (baseline: 15.9%)
Market context
Snapshot returns at report publication
1 month
+37.6%
3 months
+50.8%
6 months
+101.8%
1 year
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At a Glance
A smaller company is on a steady trend at unprofitable earnings.
Top Holders
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