Motorcar Parts Of America Inc (NASDAQ: MPAA)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0000918251
Market Cap 241.09 Mn
P/B 0.93
P/E 97.92
P/S 0.31
ROIC (Qtr) -23.61
Div Yield % 0.00
Rev 1y % (Qtr) 6.38
Total Debt (Qtr) 186.66 Mn
Debt/Equity (Qtr) 0.72

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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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 75.36M provides robust 0.40x coverage of total debt 186.66M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 986.37M provides 5.28x coverage of total debt 186.66M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 75.36M provides strong 15.73x coverage of stock compensation 4.79M, indicating sustainable incentive practices.
  • Robust free cash flow of 70.04M exceeds capital expenditure of 5.32M by 13.18x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 986.37M provides 5.74x coverage of working capital 171.95M, indicating strong operational backing.

Bear case

  • Operating cash flow of 75.36M barely covers its investment activities of (5.23M), with a coverage ratio of -14.40, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 15.71M against inventory of 372.59M, 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 (5.23M) provide weak support for R&D spending of 13.76M, which is -0.38x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 75.36M provides insufficient coverage of deferred revenue obligations of 296.17M, which is 0.25x, raising concerns about future service delivery capabilities.
  • Free cash flow of 70.04M represents just -1.30x of debt issuance (53.93M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

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 80.07 Bn 32.23 4.59 8.40 Bn
2 AZO Autozone Inc 57.24 Bn 23.23 2.97 12.05 Bn
3 APTV Aptiv PLC 19.67 Bn 66.67 0.98 8.03 Bn
4 GPC Genuine Parts Co 17.83 Bn 22.05 0.74 6.40 Bn
5 MGA Magna International Inc 15.86 Bn 15.36 0.38 7.48 Bn
6 ALV Autoliv Inc 9.72 Bn 12.92 0.92 2.19 Bn
7 MBLY Mobileye Global Inc. 9.47 Bn -28.17 4.88 0.00 Bn
8 BWA Borgwarner Inc 8.87 Bn 66.21 0.63 3.90 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.43 1.16
EV to Cash from Ops. EV/CFO 5.70 9.30
EV to Debt EV to Debt 2.30 34.64
EV to EBIT EV/EBIT 6.71 4.45
EV to EBITDA EV/EBITDA 4.79 7.40
EV to Free Cash Flow [EV/FCF] EV/FCF 6.13 17.25
EV to Market Cap EV to Market Cap 1.78 1.58
EV to Revenue EV/Rev 0.54 3.42
Price to Book Value [P/B] P/B 0.93 -0.33
Price to Earnings [P/E] P/E 97.92 11.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.64
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.18
Dividend per Basic Share Div per Share (Qtr) 0.00 0.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 13.70
Interest Coverage Int. cover (Qtr) 1.22 -110.44
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -183.01 -13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 50.87 27.17
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -80.56 5.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 83.23 -8.06
EBIT Growth (1y) % EBIT 1y % (Qtr) 102.78 -22.36
EBT Growth (1y) % EBT 1y % (Qtr) 138.39 -123.98
EPS Growth (1y) % EPS 1y % (Qtr) 103.82 -110.42
FCF Growth (1y) % FCF 1y % (Qtr) 57.49 24.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.28 16.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.80 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.25
Cash Ratio Cash Ratio (Qtr) 0.04 0.69
Current Ratio Curr Ratio (Qtr) 1.46 2.88
Debt to Equity Ratio Debt/Equity (Qtr) 0.72 0.22
Interest Cover Ratio Int Coverage (Qtr) 1.22 -110.44
Times Interest Earned Times Interest Earned (Qtr) 1.22 -110.44
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.60 -952.44
EBIT Margin % EBIT Margin % (Qtr) 8.11 -997.37
EBT Margin % EBT Margin % (Qtr) 1.46 -987.56
Gross Margin % Gross Margin % (Qtr) 20.30 -122.43
Net Profit Margin % Net Margin % (Qtr) 0.30 -979.78