Motorcar Parts Of America Inc (NASDAQ: MPAA)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0000918251
Market Cap 199.48 Mn
P/B 0.77
P/E 102.40
P/S 0.26
ROIC (Qtr) 17.95
Div Yield % 0.00
Rev 1y % (Qtr) -9.93
Total Debt (Qtr) 196.23 Mn
Debt/Equity (Qtr) 0.76
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About

Motorcar Parts of America Inc (MPAA), a prominent player in the $130 billion non-discretionary automotive aftermarket for replacement hard parts in North America, specializes in the supply of automotive aftermarket non-discretionary replacement parts and test solutions and diagnostic equipment. The company's product portfolio includes light-duty rotating electrical products, wheel hub products, brake-related products, turbochargers, and test solutions and diagnostic equipment. MPAA's operations are structured into three segments: Hard Parts, Test...

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Investment thesis

Bull case

  • Strong tangible asset base of 987.78M provides 5.03x coverage of total debt 196.23M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 27.66M exceeds capital expenditure of 5.11M by 5.41x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 987.78M provides 5.92x coverage of working capital 166.97M, indicating strong operational backing.
  • Tangible assets of 987.78M provide robust 9.35x coverage of other current liabilities 105.59M, indicating strong asset backing.
  • Operating cash flow of 32.77M provides strong 58.21x coverage of tax liabilities 563000, showing excellent fiscal position.

Bear case

  • Operating cash flow of 32.77M barely covers its investment activities of (5M), with a coverage ratio of -6.55, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 17.51M against inventory of 398.98M, the 0.04 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Investment activities of (5M) provide weak support for R&D spending of 14.21M, which is -0.35x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 32.77M provides insufficient coverage of deferred revenue obligations of 295.11M, which is 0.11x, raising concerns about future service delivery capabilities.
  • Operating earnings of 58.39M show weak coverage of depreciation charges of 19.58M, with a 2.98 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Auto Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ORLY O Reilly Automotive Inc 79.05 Bn 31.82 4.53 8.40 Bn
2 AZO Autozone Inc 62.61 Bn 25.41 3.25 12.05 Bn
3 ALSN Allison Transmission Holdings Inc 21.28 Bn 43.99 10.65 2.40 Bn
4 MGA Magna International Inc 18.84 Bn 22.73 0.45 6.69 Bn
5 GPC Genuine Parts Co 18.74 Bn 27.28 1.22 6.40 Bn
6 APTV Aptiv PLC 18.21 Bn 110.36 0.89 7.95 Bn
7 BWA Borgwarner Inc 13.42 Bn 48.46 0.94 3.90 Bn
8 MOD Modine Manufacturing Co 11.46 Bn 117.21 3.99 0.62 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.37 1.25
EV to Cash from Ops. EV/CFO 11.30 14.01
EV to Debt EV to Debt 1.89 36.85
EV to EBIT EV/EBIT 6.34 21.23
EV to EBITDA EV/EBITDA 4.59 9.40
EV to Free Cash Flow [EV/FCF] EV/FCF 13.39 -2.78
EV to Market Cap EV to Market Cap 1.86 1.79
EV to Revenue EV/Rev 0.48 3.03
Price to Book Value [P/B] P/B 0.77 0.00
Price to Earnings [P/E] P/E 102.40 12.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.87
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 13.37
Dividend per Basic Share Div per Share (Qtr) 0.00 0.42
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 14.12
Interest Coverage Int. cover (Qtr) 1.19 -114.22
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -131.84 -15.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 61.99 20.52
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -71.96 35.51
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 42.95 -1.89
EBIT Growth (1y) % EBIT 1y % (Qtr) 42.30 -6.91
EBT Growth (1y) % EBT 1y % (Qtr) 156.79 -105.73
EPS Growth (1y) % EPS 1y % (Qtr) 111.36 -467.53
FCF Growth (1y) % FCF 1y % (Qtr) 11.13 15.37
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.40 23.99
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.78 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.08
Cash Ratio Cash Ratio (Qtr) 0.04 0.72
Current Ratio Curr Ratio (Qtr) 1.43 2.95
Debt to Equity Ratio Debt/Equity (Qtr) 0.76 0.09
Interest Cover Ratio Int Coverage (Qtr) 1.19 -114.22
Times Interest Earned Times Interest Earned (Qtr) 1.19 -114.22
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.10 -988.62
EBIT Margin % EBIT Margin % (Qtr) 7.58 -1,028.09
EBT Margin % EBT Margin % (Qtr) 1.22 -1,019.44
Gross Margin % Gross Margin % (Qtr) 19.20 -124.68
Net Profit Margin % Net Margin % (Qtr) 0.30 -1,011.37