Strattec Security Corp. (STRT)
NASDAQConsumer DiscretionaryAuto - PartsSnapshot 2026-09-09
$72.16-2.93%
Close 2026-09-09 · 1-day change
NASDAQConsumer DiscretionaryAuto - PartsSnapshot 2026-09-09
Broken: Primary pillar broken — Maintain gross margin between 18% and 20%: 15.6% vs 18.0% target.
Strattec keeps gross margins near 18% to 20%. Free cash flow stays about $10 million. Revenue holds near $132 million despite EV market challenges. The company buys back shares, showing strong capital return.
Revenue may decline more than 3% to 4% due to EV cancellations. Margins could fall below 18%. Free cash flow might weaken. The company faces elevated risk and sector headwinds.
The price is about 33% below our fair value near $115. Analysts expect flat revenue growth. We see value if Strattec meets margin and cash flow targets.
Breaks if: buyback program is canceled or materially reduced
Breaks if: free cash flow falls below $10 million next quarter
Breaks if: gross margin falls below 18% next quarter
Sustain gross margin within the long-term target range of 18% to 20% through pricing, cost actions, and operational improvements.
Stated as a priority in 3 of last 3 quarters. Management targets 18%-20% gross margin long term. Fiscal 2026 gross margin was 16.5%, below target, reflecting foreign exchange and tariff headwinds. The trajectory shows persistent focus but margin remains below target, indicating limited progress toward the stated goal.
“Gross margin expanded to 16.5% for fiscal 2026, below target range.”
“Continuing to target 18% to 20% margins over next few years.”
“Long term goal remains 18% to 20% gross margin.”
Breaks if: revenue decline exceeds 4% YoY next quarter
Strattec expects a revenue decline of 3% to 4% year-over-year due to EV cancellations and lower production.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a turnaround story with a focus on improving business performance. The current thesis state indicates some weakening, as recent financial performance has dropped within its industry.
The market currently prices STRT as relatively cheap compared to its peers, with a notable expectations gap. This suggests that investors may not be fully accounting for the challenges the company faces.
Management is focused on transforming the business and maintaining gross margins, but recent results show mixed progress. Revenue pressures from EV cancellations and production changes indicate ongoing challenges that could impact future performance.
The long-term thesis hinges on management's ability to execute its transformation plan and external factors like inflation and sector performance. Key triggers include guidance changes and earnings results from major sector players.
In the next 1 to 3 years, STRT's performance will depend on its management execution amid sector headwinds and economic conditions. Not investment advice.
The most important moves since the prior daily snapshot.
Yes, our read has weakened. The company faces potential margin pressures, which could affect performance. A recent downgrade by Freedom Broker highlights these concerns. Additionally, a sharp drop in stock price suggests the market may be repricing the thesis.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.