Methode Electronics, Inc. designs, manufactures, and markets component and subsystem devices in the United States and internationally. The company operates through Automotive, Interface, Power Products, and Other segments. The company was founded in 1946 and is based in Chicago, Illinois.
MEI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for MEI, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Methode Electronics Inc ranked in the 46th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 21.67%. The most interesting components of our discounted cash flow analysis for Methode Electronics Inc ended up being:
MEI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 25.76% of tickers in our DCF set.
Methode Electronics Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 13.27. This coverage rate is greater than that of 78.81% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 7. This value is greater than only 10.89% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
NVDA, NVT, NXPI, TEAM, and ICHR can be thought of as valuation peers to MEI, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.