STRATTEC SECURITY CORPORATION Common Stock (STRT)

FairStock Score: 78/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $61 million in annual free cash flow (18.6% yield on market cap)
• Solid return on equity of 11.4% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.01, providing financial flexibility
• FairStock composite score of 78/100 places it in the top tier across value, quality, and momentum factors

AI Analysis

STRATTEC SECURITY CORPORATION Common Stock is a micro-cap consumer cyclical company valued at $330 million. The business generates $586 million in annual revenue with a 0.8% net margin and $61 million in free cash flow. From a quality standpoint, STRATTEC shows healthy Altman Z-Score of 3.5 and adequate 11% ROE. On valuation, the stock is attractively valued at 12.1x earnings, with a modest 15% margin of safety vs Graham Number. Growth dynamics show revenue growing at 5.9% and profit growth of 275.1%. Our composite FairStock Score of 78/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $61 million in annual free cash flow (18.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer cyclical space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer