| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 55.23 | 739 |
| Intrinsic value (DCF) | 2.14 | -67 |
| Graham-Dodd Method | 4.70 | -29 |
| Graham Formula | n/a |
Stoneridge, Inc. (NYSE: SRI) is a leading designer and manufacturer of engineered electrical and electronic components, modules, and systems for the automotive, commercial, off-highway, motorcycle, and agricultural vehicle markets. Operating globally across North America, South America, Europe, and other international markets, Stoneridge serves OEMs, Tier 1 suppliers, and aftermarket distributors. The company operates through three key segments: Control Devices (sensors, switches, actuators), Electronics (driver information systems, vision systems, connectivity solutions), and Stoneridge Brazil (telematics, vehicle security, and infotainment). Founded in 1965 and headquartered in Novi, Michigan, Stoneridge plays a critical role in vehicle electrification, safety, and connectivity trends. With a focus on innovation, the company supports the automotive industry's shift toward advanced driver-assistance systems (ADAS) and smart vehicle technologies. Despite recent profitability challenges, Stoneridge maintains a diversified customer base and positions itself as a niche player in specialized vehicle electronics.
Stoneridge presents a mixed investment profile. The company operates in growing segments like vehicle electrification and telematics, benefiting from long-term automotive technology trends. However, its recent financials show challenges, with negative net income (-$16.5M) and diluted EPS (-$0.60) in the latest reporting period. The company's $132M market cap and 1.221 beta suggest higher volatility compared to the broader market. Positive operating cash flow ($47.7M) indicates some operational strength, but significant debt ($208M) against $71.8M cash raises leverage concerns. The lack of dividends may deter income investors. Stoneridge could appeal to investors seeking exposure to automotive technology at a small-cap valuation, but execution risks and competitive pressures warrant caution.
Stoneridge competes in the fragmented automotive electronics and components sector, differentiating through specialized product offerings and engineering capabilities. The company's competitive advantage stems from its focus on niche applications (commercial/off-highway vehicles) and integrated system solutions that combine sensors, controls, and telematics. Its Stoneridge Brazil segment provides localized telematics expertise in an emerging market. However, Stoneridge faces intense competition from larger automotive suppliers with greater scale and R&D budgets. The company's relatively small size ($908M revenue) limits its ability to compete on price for high-volume programs. Technological differentiation in camera-based vision systems and connectivity products provides some insulation against commoditization. Stoneridge's strategy of targeting specific vehicle applications (rather than pursuing broad automotive platforms) helps maintain margins but may constrain growth opportunities. The lack of significant vertical integration compared to some competitors could be a disadvantage in cost-sensitive segments. The company's future positioning will depend on its ability to capitalize on vehicle connectivity trends while improving operational efficiency.