Methode Electronics(MEI) Plunges 10.13% on Q4 Loss, Guidance Cut

Methode Electronics(MEI) shares plummeted 10.13% intraday, marking the third consecutive day of decline, with a cumulative drop of 33.30% over the past three days. The stock price hit its lowest level since May 2025.

The strategy of buying MEI shares after they reached a recent high and selling them one week later yielded a significant loss. Over the past five years, the strategy resulted in a return of -61.64%, which is a substantial loss compared to the benchmark return of 56.99%. The maximum drawdown was -77.55%, indicating a high risk of substantial losses during market downturns. The Sharpe ratio was -0.54, suggesting that the risk-adjusted return was negative, further highlighting the strategy's poor performance.

Methode Electronics Inc reported a negative adjusted EBITDA of $7.1 million for Q4 2025, a significant decrease from the previous year. This financial performance has raised concerns among investors about the company's profitability and operational efficiency.

The company's adjusted net loss for Q4 2025 was $27.4 million, a substantial increase from the $7.9 million loss in the same quarter of fiscal 2024. This widening loss has further dampened investor sentiment, contributing to the stock's decline.

Methode Electronics also projected a notable shift in guidance, moving from reaffirming profitable organic sales growth to anticipating a $100 million sales decline in fiscal 2026. This revised outlook has raised questions about the company's future revenue prospects and its ability to navigate the current market challenges.

The company reported a decrease in revenue and expects full-year revenue in the range of $900 million to $1 billion, indicating a lower performance compared to previous years. This revenue outlook has added to the negative sentiment surrounding the stock, as investors reassess their expectations for the company's financial performance.