Breaking Down Stoneridge, Inc. (SRI) Financial Health: Key Insights for Investors

You're looking at Stoneridge, Inc. (SRI) and seeing a classic auto-tech story right now: a fight between macro headwinds and proprietary product success. The direct takeaway is that while the core commercial vehicle market is slowing-forcing management to cut the 2025 full-year revenue guidance to the low end of $860 million to $870 million-operational improvements are defintely holding the line. Here's the quick math on the near-term tension: Q3 2025 sales hit $210.3 million, which is solid, but the company still posted a GAAP net loss of $(9.4) million for the quarter, reflecting those market pressures and non-operating foreign exchange costs. Still, the growth story is clear: MirrorEye sales are up a massive 78% year-to-date, plus the company has generated $16.2 million in adjusted free cash flow (cash from operations minus capital expenditures) through the first nine months of 2025. That's real money. The question you need to answer is whether the updated $30 million to $32 million adjusted EBITDA guidance for 2025 is enough to manage the $171.1 million in total debt as the commercial vehicle cycle cools.

Revenue Analysis

You're looking for a clear picture of Stoneridge, Inc. (SRI)'s top-line health, and the main takeaway is this: the core business is facing near-term pressure from macroeconomic headwinds, but its advanced technology segment is growing fast. The company updated its full-year 2025 revenue guidance to the low end of the previously provided range, now projecting between $860 million and $870 million, a clear signal of market caution.

Breaking Down the Primary Revenue Streams

Stoneridge, Inc. operates across three main reporting segments, with its Electronics division serving as the primary revenue engine. For the third quarter of 2025 (Q3 2025), the company reported total sales of $210.3 million. The Electronics segment, which includes the high-growth MirrorEye Camera Monitor System, is crucial to the company's future, so its performance is key to understanding the overall financial health you can read about in Breaking Down Stoneridge, Inc. (SRI) Financial Health: Key Insights for Investors.

Here's the quick math on how the segments contributed to that Q3 2025 total:

• Electronics: Generated $128.0 million in sales, making it the largest contributor.
• Control Devices: Brought in $72.5 million, primarily from switches and sensors.
• Stoneridge Brazil: Accounted for $18.9 million, driven by local OEM and aftermarket sales.

Year-over-Year Growth and Market Headwinds

The overall revenue trend is a mixed bag, which is why the full-year guidance was lowered. The trailing twelve months (TTM) revenue ending September 30, 2025, was $874.36 million, representing a year-over-year decrease of -4.92%. This decline reflects the challenging environment in the North American and European commercial vehicle end markets, where customer production volumes have been reduced.

Still, you need to look past the aggregate number to see where the real growth is happening. The company's future is defintely tied to its advanced technology uptake.

The MirrorEye Effect: A Significant Change

The most significant change in the revenue mix is the accelerating adoption of the MirrorEye Camera Monitor System. This product is a massive opportunity, and its sales have increased by a staggering 78% year-to-date compared to the same period in 2024. This growth is a powerful counter-trend to the broader market softness affecting the Electronics segment.

Plus, the company announced an incremental $185 million in program awards and expansions in Q3 2025, including a new MirrorEye OEM program. This new business win is a strong indicator of future revenue stability, even as the company navigates the ongoing strategic review for its Control Devices segment. The immediate action for you is to monitor the Control Devices review-a sale could significantly alter the capital structure and focus the company entirely on the higher-margin, high-tech Electronics business.

Profitability Metrics

You need to know if Stoneridge, Inc. (SRI) can actually make money in a tough market, and the short answer is: they are still operating at a loss, but they are defintely showing material operational improvement. The key takeaway for 2025 is that while the company is guiding for a razor-thin positive adjusted operating margin, the focus has shifted to aggressive cost control to offset commercial vehicle market headwinds.

For the full 2025 fiscal year, Stoneridge, Inc. is guiding for an Adjusted Gross Margin between 21.0% and 21.5%, with sales expected to land between $860 million and $870 million. This gross margin is the first hurdle, and it shows the company is largely keeping its direct costs in check. However, when you look at the industry average for Auto Parts, which sits at about 23.4% as of November 2025, Stoneridge, Inc. is still lagging its peers by nearly 200 basis points. That's a structural gap they need to close.

The real pressure point is further down the income statement. The company's full-year 2025 Adjusted Operating Margin guidance is extremely tight, projected at just 0.25% to 0.50%. This is a massive underperformance compared to the broader automotive supplier average, which rebounded to an average of 6.4% in the third quarter of 2025. Here's the quick math: a 0.50% margin on a midpoint of $865 million in sales is only about $4.3 million in operating profit, leaving almost no cushion for unexpected costs.

When you get to the bottom line, the picture is still challenging. Stoneridge, Inc. reported an Adjusted Net Loss Margin of (2.4)% for the third quarter of 2025. This means for every dollar of sales, the company lost 2.4 cents after all expenses. Compare this to the Auto Parts industry's average Net Profit Margin of 1.6%, and you see the work ahead. They are not yet profitable in a GAAP sense, but the sequential momentum is what matters right now.

Operational efficiency is the bright spot and the clear focus of management's strategy. They are executing well on cost management, which is the only reason the operating margin is even guided to be positive. This focus is visible in the quarter-over-quarter trends:

• Adjusted operating margin improved by 100 basis points from Q2 to Q3 2025.
• Material costs improved by 200 basis points in Q3 2025 versus Q2 2025.
• Quality-related costs were reduced by $5.3 million year-to-date compared to the same period in 2024.

This shows a clear, actionable push to improve the gross margin trend, which is a necessary foundation for future profitability. The operational gains are offsetting the sales decline driven by lower customer production volumes, especially in the North American commercial vehicle market.

The following table summarizes the key profitability metrics against the industry benchmark, providing a clear map of where Stoneridge, Inc. stands and where the market is. For a full analysis of the company's financial stability, including its debt and cash flow position, you should read the full post: Breaking Down Stoneridge, Inc. (SRI) Financial Health: Key Insights for Investors.

Next Step: Focus your review on the sustainability of the 200 basis point material cost improvement as a leading indicator of future gross margin expansion.

Debt vs. Equity Structure

You're looking at Stoneridge, Inc. (SRI)'s balance sheet, and the first thing to check is how they fund their operations-the mix of debt versus equity. As of September 30, 2025, Stoneridge, Inc. has a total debt load of approximately $171.1 million, which is a significant figure, but it's crucial to see it in context. Their net debt, after accounting for the $54.0 million in cash and cash equivalents, stands at about $117.2 million.

The core of their financing is debt, mostly structured through a revolving credit facility. This is a common tool for capital-intensive businesses like auto parts suppliers, but the near-term maturity is a key risk. The current credit facility is set to mature on November 2, 2026.

Here's the quick math on how leveraged (debt-financed) the company is:

• Total Debt (Q3 2025): $171.1 million
• Total Shareholder Equity: $251.2 million
• Debt-to-Equity Ratio: 0.681 (or 68.1%)

A Debt-to-Equity (D/E) ratio of 0.681 means that for every dollar of shareholder equity, Stoneridge, Inc. uses about 68 cents of debt to finance its assets. Compared to the 'Auto Parts' industry average D/E ratio of around 0.59 (59%) as of late 2025, Stoneridge, Inc. is running slightly more leveraged than its peers. Still, a D/E ratio below 1.0 is generally seen as healthy, suggesting the company relies more on shareholder capital than borrowed funds, which is defintely a positive sign for long-term stability.

The real-time action here is the recent credit agreement amendment on November 5, 2025. Stoneridge, Inc. secured covenant relief, which is a signal that they were getting close to breaching the terms of their loan agreement due to weaker-than-expected operating results. This amendment also reduced their borrowing capacity, but critically, it bought them breathing room. The adjusted net debt to trailing twelve-month EBITDA leverage ratio was 3.67x as of Q3 2025, which is comfortably below the new required maximum of 4.50x under the amended facility.

The company is clearly balancing its growth financing by leaning on debt, but they are actively managing that risk. The recent amendment shows a proactive approach to maintaining compliance and managing their capital structure ahead of the 2026 maturity. The key takeaway for investors is that while leverage is manageable, the debt structure is currently their primary financial constraint, not an engine for new, aggressive growth. For a deeper dive into the company's performance, check out Breaking Down Stoneridge, Inc. (SRI) Financial Health: Key Insights for Investors.

Here is a summary of the capital structure metrics:

Next Step: Monitor the company's cash flow generation, specifically free cash flow, as a primary indicator of their ability to pay down the revolving credit facility or secure favorable refinancing terms before the November 2026 maturity.

Liquidity and Solvency

You need to know if Stoneridge, Inc. (SRI) can cover its near-term obligations while also funding its growth. The short answer is yes, the company's liquidity position is generally solid, but it is heavily dependent on continued operational efficiency and a successful debt management strategy as a major credit facility looms.

The core of a company's immediate financial health is its ability to pay its bills. We look at two key ratios for this, using the latest available figures from the third quarter of 2025 (Q3 2025).

• Current Ratio: At Q3 2025, Stoneridge, Inc.'s Current Ratio (Current Assets divided by Current Liabilities) stands at approximately 2.14. This is a strong figure, meaning the company holds $2.14 in current assets for every dollar of current liabilities. A ratio above 2.0 is defintely a healthy sign of short-term financial strength.
• Quick Ratio: The Quick Ratio (or Acid-Test Ratio), which strips out less-liquid inventory and prepaid expenses, is approximately 1.15. This ratio is more conservative, and a value above 1.0 is the benchmark. Stoneridge, Inc. passes this test, showing it can cover its immediate debts even if it can't sell any of its inventory immediately.

Here's the quick math on the liquidity positions as of September 30, 2025 (in thousands):

Working Capital and Cash Flow Trends

The positive liquidity ratios are supported by a deliberate and effective focus on improving working capital (Current Assets minus Current Liabilities). The most significant trend here is inventory management. Over the last twelve months leading up to Q3 2025, the company successfully reduced its inventory balance by a substantial $31 million, which directly frees up cash and improves the working capital position.

Looking at the Cash Flow Statement for the nine months ended September 30, 2025, we see a clear picture of cash generation and deployment:

• Operating Cash Flow (OCF): Net cash provided by operating activities totaled $25.2 million. This positive cash flow from the core business is the primary source of liquidity and a major strength.
• Investing Cash Flow: The company's focus on capital efficiency is evident. With an adjusted free cash flow of $16.2 million year-to-date, the estimated capital expenditures (CapEx) for property and equipment are roughly $9.0 million ($25.2M OCF - $16.2M FCF). This suggests prudent, focused investment, not a cash-burning spree.
• Financing Cash Flow: The trend is toward debt reduction, which is a positive signal. Stoneridge, Inc. achieved a net debt reduction of $12.6 million year-to-date. This cash is being used to de-lever the balance sheet, not to raise new capital or pay dividends.

Near-Term Liquidity Concerns and Actions

The main liquidity concern is the maturity of the company's revolving credit facility, which is due in November 2026. This is a near-term refinancing event that management is actively addressing.

Their clear action plan is to use the potential proceeds from the strategic review and possible sale of the Control Devices segment to significantly reduce debt. To buy time for this process, the company secured an amendment to its credit facility, extending interest coverage ratio relief at 2.5x through the first quarter of 2026. This is a smart move to manage covenant compliance while they finalize the strategic review. The full story of the company's financial standing is detailed in our deep dive: Breaking Down Stoneridge, Inc. (SRI) Financial Health: Key Insights for Investors.

Next Step: Portfolio Managers should model a debt-reduction scenario on the balance sheet using an assumed Control Devices sale price by the end of Q1 2026.

Valuation Analysis

You need to know if Stoneridge, Inc. (SRI) is a bargain or a trap right now. The quick answer is that the market sees it as significantly undervalued based on its assets and future potential, despite the current lack of profitability.

As of November 20, 2025, the stock price sits at $5.48, which is near the lower end of its 52-week range of $3.54 to $9.10. The stock has fallen about 13.93% over the last 12 months, reflecting market concerns about near-term execution and the broader commercial vehicle market slowdown.

Here's the quick math on the key valuation multiples, which tell a compelling story of a company priced well below its intrinsic value:

• Price-to-Earnings (P/E) Ratio: N/A. Stoneridge, Inc. is currently unprofitable, with a consensus 2025 adjusted EPS of approximately ($0.42), so the trailing P/E ratio isn't applicable.
• Price-to-Book (P/B) Ratio: 0.62x. This is a crucial number. It means the stock is trading at only 62% of its book value (assets minus liabilities), suggesting the market is heavily discounting the company's underlying net assets.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: 10.73x (Trailing Twelve Months). This ratio is more relevant for a company focused on operational turnaround. Considering the updated 2025 Adjusted EBITDA guidance is between $30 million and $32 million, the company's Enterprise Value of approximately $282.44 million suggests a forward EV/EBITDA closer to 9.4x, which is reasonable for an auto-component supplier with high growth product lines like MirrorEye®.

To be fair, the market is pricing in risk, which is why the P/B is so low. What this estimate hides is the execution risk in hitting the high-growth targets for new technology like the MirrorEye® Camera Monitor System. You can read more about their strategic focus in their Mission Statement, Vision, & Core Values of Stoneridge, Inc. (SRI).

Stoneridge, Inc. does not pay a dividend, so the dividend yield and payout ratios are $0.00 and N/A, respectively. This is typical for a company reinvesting all capital back into growth and turnaround initiatives.

The analyst community is defintely leaning toward an 'undervalued' assessment. The consensus rating from five analysts is a Buy. The latest price target range, adjusted in November 2025, is between $13.00 and $16.00 per share, representing a potential upside of over 137% from the current price.

Here is a snapshot of the key valuation metrics:

The low P/B ratio and the strong analyst consensus suggest a classic deep-value play, but it's contingent on the company achieving its projected 2026 targets.

Risk Factors

You're looking at Stoneridge, Inc. (SRI) and wondering about the downside, which is smart. The company is in a tough, cyclical industry, so near-term risks are defintely a factor, even with the long-term potential of products like MirrorEye. Here's the quick math: the external market headwinds are strong, and they are directly impacting the company's ability to generate profit right now.

The biggest external risk is the sharp downturn in key commercial vehicle markets. For the 2025 fiscal year, the company is navigating a projected production decline of 27.7% in the North American commercial vehicle end market and a 6.4% decline in the European market compared to 2024. This market weakness is why Stoneridge, Inc. updated its full-year 2025 revenue guidance to the low end of its previously provided range, now expecting sales between $860 million and $870 million.

The operational and financial risks are clear in the Q3 2025 results. The company reported an Adjusted Earnings Per Share (EPS) loss of -$0.18, missing analyst expectations of -$0.07. Plus, as an international supplier, Stoneridge, Inc. is exposed to foreign exchange volatility, which resulted in a non-operating, non-cash FX expense of $2.4 million in the third quarter alone. That kind of currency swing can really eat into your margin.

Key Operational and Financial Risks

• Cyclical Demand: A significant decline in commercial, automotive, off-highway, and agricultural vehicle production could reduce sales and profitability, as the business is highly cyclical.
• Customer Concentration: Several key customers account for a significant percentage of total sales, making the company vulnerable to production cuts or loss of business from any single major buyer.
• Debt Maturity: The current credit facility is maturing in less than one year, specifically on November 2, 2026, which requires a refinancing plan soon.
• Supply Chain Volatility: Ongoing risks related to the timely supply of parts and components from vendors, which can be exacerbated by tariffs and trade considerations.

To be fair, management isn't just sitting still. They have a clear mitigation strategy focused on operational improvements and a strategic pivot. They are exploring strategic alternatives, including a potential sale, for the Control Devices segment to focus resources on the higher-margin electronics business. This is a move to simplify the business and focus on technology like the MirrorEye® camera-based vision system, which is a major growth driver expected to offset some of the macroeconomic headwinds.

Here's the quick math on their balance sheet efforts: as of September 30, 2025, the company had total debt of $171.1 million and is actively working to reduce its leverage, targeting a compliance leverage ratio of 3.0x-3.5x by the end of 2025. They also saw material costs improve by 200 basis points compared to the second quarter of 2025, showing they are managing what they can control. You can review their long-term strategic direction, which guides these decisions, by looking at their Mission Statement, Vision, & Core Values of Stoneridge, Inc. (SRI).

Growth Opportunities

You're looking past the current market headwinds and asking the right question: where does Stoneridge, Inc. (SRI) actually grow from here? The direct takeaway is that their future growth hinges less on the overall commercial vehicle market and more on a focused, high-margin technology pivot, specifically their camera-vision systems.

The company is fundamentally repositioning itself, moving toward its high-tech Electronics segment. This is clear from the ongoing strategic review of the Control Devices segment, which could lead to a sale. This move is defintely designed to focus capital and resources on the higher-growth areas, like their flagship product, MirrorEye.

Here's the quick math on what's driving the top line:

• MirrorEye System: Sales for this camera monitor system soared by an impressive 78% year-to-date in 2025, cementing its status as the primary organic growth engine.
• New Program Awards: Stoneridge, Inc. secured an incremental $185 million in new program awards and expansions in 2025, a significant portion of which is tied to MirrorEye.
• Brazil Expansion: The Stoneridge Brazil segment is showing strong momentum, with sales jumping 23.5% in the third quarter of 2025 relative to the second quarter. This includes a major new electronic control unit award expected to generate approximately $85 million in lifetime revenue.

This is a classic portfolio optimization play. They are doubling down on what works-advanced technology-while exploring strategic alternatives for a more mature business unit.

Future Revenue and Earnings Outlook

While the strategic shift is underway, the near-term financial picture is more constrained by macroeconomic pressures, especially in North American and European commercial vehicle production. Still, the company is managing expectations and costs effectively.

For the 2025 fiscal year, Stoneridge, Inc. updated its full-year revenue guidance to the low end of the previously provided range, now expecting between $860 million and $870 million. This is a realistic adjustment given the industry slowdown, but it's crucial to see their specific product growth offsetting broader market declines.

What this estimate hides is the expected profitability turnaround. Analysts currently forecast earnings per share (EPS) to improve sharply, growing from a loss of ($0.42) per share to a positive $0.10 per share in the following year (likely 2026). This assumes the cost-control measures and high-margin product growth continue to take hold.

Competitive Edge and Strategic Focus

The company's main competitive advantage is its technology leadership in the camera vision systems space. Stoneridge, Inc. is recognized as the leading provider of camera vision systems globally. This isn't just a niche product; it's a safety and compliance solution, especially with the launch of the next-generation MirrorEye® Multi-Purpose II (MP II) system in 2025, which supports European regulation compliance.

They are also making internal improvements that create a structural advantage. Year-to-date quality-related costs have improved by $5.3 million, and material costs improved by 200 basis points in Q3 2025. These operational efficiencies are critical for margin expansion, especially when top-line growth is challenged by market volatility. Plus, they are actively managing their balance sheet, reducing net debt by $12.6 million year-to-date and targeting a lower compliance leverage ratio of 3.0x-3.5x by the end of 2025.

The strategic review of Control Devices, which is still in process, is the single most important near-term action that could accelerate their deleveraging and focus on the higher-margin Electronics business. To understand the full context of these numbers, you should read Breaking Down Stoneridge, Inc. (SRI) Financial Health: Key Insights for Investors.