What Happened?
Shares of sensor manufacturer Sensata Technology (NYSE:ST) jumped 9.3% in the morning session after the company reported strong fourth-quarter results, which beat analysts' revenue, EBITDA, and EPS expectations. Notably, margins expanded significantly, as operating Margin rose to 8.1%, up from -20.3% in the same quarter last year. Inventory levels also improved. On the other hand, its revenue and EPS guidance for the next quarter missed. Overall, the outlook made this a weaker quarter because markets are forward-looking, but investors seem to be rewarding the stock for its current print.
The shares closed the day at $28.05, up 8.7% from previous close.
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What The Market Is Telling Us
Sensata Technologies’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 20.4% on the news that the company reported strong first quarter results which exceeded analysts' EPS expectations. Its revenue also outperformed Wall Street's estimates. That guidance for next quarter which was in line with expectations shows that this company is on track.
The company also announced the retirement of CEO and President Jeff Cote; Martha Sullivan was Appointed Interim President and CEO. Also, in consultation with activist investors, Elliott Investment Management, Sensata appointed Phillip Eyler to the Company's Board. Phillip Eyler will serve on the CEO Search Committee and the Nominating and Governance Committee. Zooming out, we think this was still a decent, albeit mixed, quarter.
Sensata Technologies is up 2.8% since the beginning of the year, but at $28.01 per share, it is still trading 34.9% below its 52-week high of $43.02 from May 2024. Investors who bought $1,000 worth of Sensata Technologies’s shares 5 years ago would now be looking at an investment worth $562.56.
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