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Strattec Security Corp

Strattec Security Corp

STRT
$82.36USD↓-1.16%-0.97 today

MARKET CAP

344.2M

P/E (TTM)

13.6x

FWD P/E

14.7x

DAY RANGE

$79 – $85

52W RANGE

$57
$93

AI Summary

Stalk
TrimMedium

Medium-term structure is bearish under Stage 4 decline with lower highs/lows and no mean-reversion eligibility, so the tradable side is down. Short-term execution lacks clear rejection but shows an oversold bounce, suggesting deferring entry. Execution should focus on resistance around the 9/21/50 EMA zone and look for rejection signals to sell. The long-term uptrend remains intact, providing structural support and helping define risk. Overall, we hold a bearish bias in the intermediate horizon but patiently stalk for resistance to confirm execution.

  • ↑Q3 operating cash flow of $11.4M and $107M cash cushion underpins strategic initiatives.
  • ↑Gross margin improved 560bps YoY to 16.5% after cost restructuring.
  • ↓Q4 revenue outlook down 3–4% YoY amid EV program cancellations and weaker OEM volumes.
Full analysis →

The case for & against

Bull & Bear analysis

Bearish

Strat Tech Security Corporation (NASDAQ: STRT) is a leading provider of advanced automotive security solutions, focusing on innovative access technology and digital key fob applications. Positioned within the automotive technology sector, the company is navigating significant transformations influenced by supply chain challenges, tariff impacts, and the shifting consumer demand landscape towards electric vehicles (EVs) and traditional internal combustion engines (ICE). Strat Tech's commitment to operational excellence and restructuring initiatives aims to maintain its competitive edge while adapting to the evolving automotive market.

Bull says

  • ↑Q3 operating cash flow of $11.4M and $107M cash cushion underpins strategic initiatives.
  • ↑Gross margin improved 560bps YoY to 16.5% after cost restructuring.
  • ↑Restructuring yields $5M annual savings, driving ongoing margin expansion.
  • ↑Pivot to digital key solutions and expanding content with existing clients.
  • ↑High earnings yield and strong profitability metrics imply attractive valuation.
  • ↑Robust balance sheet and positive momentum support recovery potential.

Bear says

  • ↓Q4 revenue outlook down 3–4% YoY amid EV program cancellations and weaker OEM volumes.
  • ↓Q3 revenue slid 4.5% YoY to $138M; net income fell to $3.2M.
  • ↓Tariffs and labor headwinds cost $9–12M annually, pressuring margins.
  • ↓Major customer exposure: Ford and Hyundai volumes down over 10% YoY.
  • ↓Negative earnings revisions, liquidity constraints and below-average scale raise caution.
  • ↓Currency swings and supply chain disruptions threaten near-term earnings stability.

Earnings Call · Q3 2025 · Mgmt. Guidance

Updated 06-15-2026neutral

Transcript signals

Bull points

  • Our gross profit for the quarter rose significantly to $23.1 million up from $14.7 million in the prior year period. Gross margin expanded by 560 basis points to 16%, driven by a $4.4 million benefit from a stronger U.S. dollar, strategic pricing actions, and continued operational improvements in material and labor cost efficiencies.
  • Net income attributable to Stratec was $5.4 million for the quarter, or $1.32 per diluted share, compared with $1.5 million, or $0.37 per share, in the third quarter last year. On an adjusted basis, earnings per share increased 305% to $1.50. Adjusted EBITDA rose sharply to $12.9 million, representing an adjusted EBITDA margin of 8.9%, up 450 basis points.
  • Operating cash flow was strong at 20.7 million, a meaningful turnaround from a use of cash in the same period last year. This improvement reflects enhanced profitability and disciplined working capital management.

Bear points

  • We anticipate these actions to be completed in the fourth quarter. The savings will phase in and be at full run rate in the first quarter of fiscal 2026.
  • We have currently mitigated about 30% of the tariff impact and are in the process of pursuing commercial recoveries for the balance.
  • We estimate the annualized impact of recently announced US tariffs to be $9 to $12 million in added costs before mitigation.
Read full transcript analysis ›