Why Motorcar Parts of America Surged Nearly 35% Higher Today
Key Points
It also posted net sales growth of almost 10%.
Management's guidance also impressed investors.
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Motorcar Parts of America (NASDAQ: MPAA) was a racecar of a stock as the trading week kicked off. Investors couldn't wait to catch a ride with the auto parts company after it released highly encouraging quarterly results. The company left many other stocks in the dust with an almost 35% gain on Monday.
Motoring higher
Just before market open, Motorcar Parts opened the hood on its fourth-quarter fiscal 2026 results. For the period, its net sales were slightly over $212 million, up nearly 10% year over year. More impressively, the automotive components company flipped to a net profit under generally accepted accounting principles (GAAP); this was $9.7 million, or $0.42 per share, against the year-ago loss of $722,000.
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Both results well exceeded the consensus analyst estimates. Collectively, pundits tracking Motorcar Parts were modeling only $176 million for net sales and $0.28 per share for GAAP bottom-line income.
In the earnings report, the company quoted CEO Selwyn Joffe as saying that "Notwithstanding some headwinds in fiscal 2026, including a large customer's ordering activity, we ended the year with a strong quarter and with significant new business commitments and opportunities which will phase in throughout fiscal 2027."
Green lights ahead, says management
Given this, Motorcar Parts expects notable growth throughout its new fiscal year (2027). The company guided for a net sales increase of 7.5% to 10.2% over fiscal 2026. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are forecast to hit $95 million to $100 million.
Motorcar Parts is currently selling into an industry where clients are keeping their machines on the road longer, a trend that would only be exacerbated should the economy stumble. A stock like this looks quite attractive at the moment.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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