Investment Thesis
Stoneridge faces severe operational distress with -4.5% operating margins, -102.8M net losses, and 5.2% revenue decline in a cyclical automotive parts sector. Elevated leverage (1.01x debt/equity) combined with negative interest coverage (-10.6x) creates refinancing risk, while minimal free cash flow (1.4% FCF margin) provides limited flexibility for debt service or recovery investments.
Strengths
- Positive operating cash flow of 34.0M despite net losses indicates some underlying business generation
- Adequate short-term liquidity with 2.30x current ratio and 1.45x quick ratio
- Cash position of 66.3M provides modest buffer for near-term obligations
Risks
- Severe and worsening profitability: operating losses of -38.6M and net losses of -102.8M with negative operating margin
- Unsustainable leverage structure: debt-to-equity of 1.01x paired with negative interest coverage (-10.6x) creates refinancing and default risk
- Declining revenue (-5.2% YoY) and razor-thin gross margin (5.8%) limit recovery optionality in auto parts cyclical downturn
- Minimal free cash flow generation (12.2M or 1.4% FCF margin) insufficient for debt service and capital needs
Key Metrics to Watch
- Path to operating profitability and operating margin recovery
- Revenue stabilization and demand trends in electric vehicle transition
- Debt refinancing success and covenant compliance
- Interest coverage ratio improvement and ability to service debt
- Free cash flow sustainability and capital allocation decisions
Financial Metrics
Revenue
861.3M
Net Income
-102.8M
EPS (Diluted)
$-3.70
Free Cash Flow
12.2M
Total Assets
551.2M
Cash
66.3M
Profitability Ratios
Gross Margin
5.8%
Operating Margin
-4.5%
Net Margin
-11.9%
ROE
-57.2%
ROA
-18.7%
FCF Margin
1.4%
Balance Sheet & Liquidity
Current Ratio
2.30x
Quick Ratio
1.45x
Debt/Equity
1.01x
Debt/Assets
0.0%
Interest Coverage
-10.62x
Long-term Debt
180.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-16T13:48:23.257319 |
Data as of: 2025-12-31 |
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