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

LFUS: Littelfuse logo
LFUS
Littelfuse

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
Relevant Articles
  1. Abercrombie & Fitch Stock Down 40%, What’s Next?
  2. Is A Fall Imminent For Walgreens Stock After An 8% Rise In A Month?
  3. Where Is Deutsche Bank Stock Headed?
  4. What’s Happening With Baidu Stock?
  5. What’s Next For General Motors Stock?
  6. After Flat Week, Can Akamai Stock Turn Things Around?

(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.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Jul 2022
MTD [1]
2022
YTD [1]
2017-22
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

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates