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Bear of the Day: Motorcar Parts of America (MPAA)

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Headquartered in Torrance, CA, Motorcar Parts of America (MPAA) is a supplier for remanufactured and new parts, which are sold in more than 25,000 outlets in the U.S. and Canada. Its products include starters, alternators, master cylinders, hub assemblies and bearings, brake power boosters, and turbochargers.

Shares Plunge After Weak Results

The company reported adjusted net income of $9.7 million, or $0.50 per diluted share, compared with $12.4 million, or $0.64 per diluted share, in the same period a year earlier. Adjusted EPS also missed the Zacks Consensus Estimate of $0.55.

"The first half of fiscal 2018 was a challenging period, even though we achieved market share gains.   As widely reported by industry observers, we are experiencing industry softness and related headwinds,” said the CEO.

Falling Estimates

Analysts have slashed their estimates for the company after weak results.  Zacks Consensus Estimates for the current and next fiscal year have fallen to $2.13 per share and $2.49 per share from $2.35 and $2.66 respectively, before the results.

Bottom Line

The stock has fallen to a Zacks Rank #5 (Strong Sell) after weak results. Further, it has Style Scores of “F” for Growth, “C” for both Value and Momentum, and “D” for VGM.

Additionally, the “Automotive - Replacement Parts” industry is currently 241 out 265 Zacks Industries (bottom 9%) suggesting near-term weakness. It’s better to avoid this stock as of now.

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