A Look At Sensata Technologies (ST) Valuation After Its New EV Focused STEV Contactor Launch

Sensata Technologies Holding (ST) has put its STEV high voltage contactor series front and center, aiming at electric and plug in hybrid vehicle demand, where safety, efficiency, and scalable integration are key concerns for OEMs.

See our latest analysis for Sensata Technologies Holding.

The STEV launch lands at a time when Sensata Technologies Holding’s shares have been firming up, with a 90 day share price return of 12.70% and a 1 year total shareholder return of 26.62% contrasting with weaker 3 and 5 year total shareholder returns. Recent analyst updates and product news appear to be feeding into a gradual reset of expectations around both growth potential and risk for investors watching the stock at its latest share price of $35.22.

If this EV focused story has your attention, it could be a good moment to widen your watchlist and check out auto manufacturers as potential next ideas.

With shares up 26.62% over 1 year but weaker 3 and 5 year total returns, and the stock trading below both analyst targets and some intrinsic estimates, is Sensata a value opportunity, or is future growth already priced in?

Most Popular Narrative: 10% Undervalued

At a last close of $35.22 versus a narrative fair value of about $39.13, the current price sits below what this widely followed view considers reasonable. This sets up a valuation story built on improving profitability, buybacks and a defined discount rate.

Ongoing strategic focus on applications for electrified powertrains (including electrical protection and tire pressure monitoring systems) across global automotive and NEV markets increases content-per-vehicle, expanding Sensata's addressable market and supporting topline and earnings growth as electrification accelerates worldwide.

Read the complete narrative.

Want to see what kind of revenue lift, margin step up and profit multiple are baked into that fair value? The narrative leans on steady top line expansion, a sharp climb in profitability and a lower future P/E than many peers use. Curious how those moving parts line up over the next few years to support that number? Read on to see the full earnings and valuation blueprint behind this call.

Result: Fair Value of $39.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are clear pressure points, including tougher pricing and technology shifts in China and elsewhere, as well as Sensata's higher net leverage, that could challenge this buyback and margin story.

Find out about the key risks to this Sensata Technologies Holding narrative.

Build Your Own Sensata Technologies Holding Narrative

If you see the story differently or want to stress test every assumption against the data yourself, you can spin up a fresh narrative of your own in just a few minutes: Do it your way.

A great starting point for your Sensata Technologies Holding research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If you stop with just one company, you risk missing out on other setups that might suit your style and timeframe, so give yourself options across sectors.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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