Why Has Littelfuse Stock Failed To Outperform The S&P, Despite Strong Sales Growth?

LFUS: Littelfuse logo

Littelfuse Inc. (NASDAQ: LFUS) stock price rose around 40% from $172 in 2018 end to $240 currently, primarily due to favorable changes in its revenue. Additionally, the company, a producer of circuit protection products and a variety of electronic switches and automotive sensors, witnessed a rise in its P/S multiple over this period, and its revenue per share has also increased, despite a roughly unchanged outstanding share count. Even then, the stock has underperformed the S&P, which returned roughly 55% over this period.

In our interactive dashboard, Why Littelfuse Stock Moved: LFUS Stock Has Gained 40% Since 2018, we break down the factors behind this move.

(A) LFUS’ Total Revenue has grown 30% from $1.7 billion in FY 2018 to around $2.2 billion on an LTM basis

  • LFUS’ total revenue first dropped from $1.7 billion in FY ’18 to $1.4 billion in FY ’20, before bouncing back strongly to $2.1 billion in FY ’21, and currently stands even higher at $2.2 billion.
  • Despite weak numbers in FY ’19 and FY ’20, the company’s recent jump in sales means that revenue numbers now stand almost 30% higher than its FY ’18 levels.
  • As of FY ’21, LFUS’ largest segment is the Electronics segment, making up around 62% of the company’s net sales, with Transportation and Industrial sales bringing in the remaining 38%.
  • For details about LFUS revenues and comparison to peers, see Littelfuse (LFUS) Revenue Comparison
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(B) Revenue per share (RPS) increased 31% from $69.13 in 2018 to $90.71 currently

  • LFUS revenue rose from $1.7 billion in 2018 to $2.2 billion currently, while the outstanding share count decreased marginally from 24.9 million in 2018 to 24.7 million currently.
  • Due to this, RPS has risen from $69.13 in FY ’18 to $90.71 currently.

(C) Price-To-Sales (P/S) multiple for LFUS surged from 2.5x in 2018 to 4.4x by 2020 end, but has pulled back to 2.6x currently, still slightly higher than its 2018 level

  • Despite LFUS’ weak performance between 2018-end to 2020, its P/S multiple rose strongly from 2.5x in 2018 to as high as 4.4x in 2020, on the back of rising investor expectations surrounding a jump in demand for the company’s products.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 2.6x.
  • For additional details about the company stock returns and comparison to peers, see Littelfuse (LFUS) Stock Return Comparison.

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Returns Jul 2022
MTD [1]
YTD [1]
Total [2]
 LFUS Return -5% -24% 58%
 S&P 500 Return 0% -20% 70%
 Trefis Multi-Strategy Portfolio 2% -21% 210%

[1] Month-to-date and year-to-date as of 7/13/2022
[2] Cumulative total returns since the end of 2016

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