Jun. 8 at 7:56 PM
$MPAA I loaded up on this when it sold off unnecessarily in February after reporting earnings. The business was fine back then, and it's in an even better spot today. While FY27 (ending March 2027) revenue guidance basically implies a flat year at the midpoint, they are expecting to exit FY2027 at an annualized run rate of about
$900M (which would be around a 14% revenue growth rate).
When First Brands Group (an automotive aftermarket supplier) went bankrupt, many of their customers purchased First Brand's inventory at liquidation prices, so it is going to take some time for those customers to burn through that inventory balance (hence the flat full year revenue guidance). The good news is that
$MPAA is in the right position to pick up some of that brake-related business when those customers burn through the liquidated inventory, as they already have relationships with those customers (and firm commitments to boot).
Add in gross margin accretion expectations going forward as volumes pick up, a much improved balance sheet, the potential for interest rate cuts to boost the bottom line (they factor receivables, so a 1% reduction in interest rates equates to around
$5-6M of additional net income annually), and more aged vehicles on the road, and I like how the business is positioned for the future.
