Methode Electronics Soars 13.38% on New Programs, Data Center Demand

Methode Electronics surged 13.38% in pre-market trading on April 28, 2025, driven by a series of strategic initiatives and market developments.

Methode Electronics is focusing on new program launches and demand in non-transportation sectors to drive future revenue growth. The company has already launched 20 new programs this fiscal year and plans to introduce an additional 33 over the next five quarters. This strategy aims to diversify revenue streams beyond the traditional automotive sector, with a particular emphasis on industrial lighting and user interfaces.

Operational improvements and management restructuring are also key components of Methode's strategy. The company is working to enhance margins and strategic execution by improving operational efficiency and reducing breakeven sales points. These efforts are expected to positively impact net margins and future earnings. Additionally, the company has hired new leaders from outside the organization to enhance strategic direction and operational efficiency.

Methode Electronics is experiencing strong growth in data center sales, driven by demand for power products as technology evolves. This growth is expected to lead to record sales for the year, further impacting future revenues. However, the company faces risks such as the decline in revenue from the roll-off of two major auto programs and operational inefficiencies from past management practices. These factors could influence the company's net margins and future profitability.