Investors looking for stocks in the Electronics - Miscellaneous Components sector might want to consider either CTS (CTS) or OSI Systems (OSIS) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strateg ...

Core Viewpoint - CTS has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on an upward trend in earnings estimates, which significantly influences stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is effective for individual investors as it focuses on earnings estimate revisions, which are strongly correlated with near-term stock price movements [2][3]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Business Improvement Indicators - Rising earnings estimates and the Zacks rating upgrade for CTS suggest an improvement in the company's underlying business, which could lead to higher stock prices as investors respond positively [4]. Importance of Earnings Estimate Revisions - Empirical research supports the correlation between earnings estimate revisions and stock movements, making it beneficial for investors to track these revisions for investment decisions [5]. - The Zacks Rank system utilizes four factors related to earnings estimates to classify stocks, with a strong historical performance of Zacks Rank 1 stocks averaging a +25% annual return since 1988 [6]. Current Earnings Estimates for CTS - CTS is projected to earn $2.41 per share for the fiscal year ending December 2026, with no year-over-year change, while the Zacks Consensus Estimate has increased by 0.4% over the past three months [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of "buy" and "sell" ratings across over 4,000 stocks, with only the top 5% receiving a "Strong Buy" rating [8]. - CTS's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.While many investors like to look for momentum i ...

Company Performance - CTS has achieved a year-to-date performance increase of approximately 32.8%, significantly outperforming the average return of -2.1% for the Computer and Technology sector [4] - The Zacks Consensus Estimate for CTS' full-year earnings has increased by 0.4% over the past quarter, indicating an improving earnings outlook [3] Industry Comparison - CTS is part of the Electronics - Miscellaneous Components industry, which consists of 26 stocks and currently ranks 52 in the Zacks Industry Rank. This industry has seen an average gain of 8% so far this year, with CTS outperforming this average [5] - Another notable stock in the Computer and Technology sector is KLA (KLAC), which has increased by 19.4% year-to-date and belongs to the Electronics - Miscellaneous Products industry, currently ranked 57 [4][6]

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Financial Data and Key Metrics Changes - For Q4 2025, the company reported sales of $137 million, a 9% increase year-over-year, with diversified end markets growing 16% [4][21] - Full-year sales reached $541 million, up 5% from $515 million in 2024, with diversified end market sales accounting for 59% of overall revenue in Q4 [4][22] - The adjusted diluted earnings per share for Q4 were $0.62, up from $0.50 in Q4 2024, while full-year adjusted diluted earnings were $2.23, compared to $2.12 in 2024 [6][23] Business Line Data and Key Metrics Changes - Medical end market sales increased by 41% in Q4 compared to the prior year, with full-year sales at $85 million, up 21% from $70 million in 2024 [7][22] - Aerospace and defense sales for 2025 were $83 million, a 20% increase from $69 million in 2024, although Q4 sales were down 4% year-over-year [9][22] - Industrial end market sales rose 16% in Q4 compared to the prior year, with full-year sales at $140 million, up 12% from $125 million in 2024 [11][22] Market Data and Key Metrics Changes - The transportation market faced challenges, with sales of $234 million in 2025, down 7% from $250 million in 2024, and Q4 sales were essentially flat at $56 million [14][22] - The North American light vehicle market is expected to be in the $15-$16 million unit range, while European production is forecasted at $16-$17 million, and China volumes are expected to be around $32 million [17] Company Strategy and Development Direction - The company is focused on diversification to drive growth and margin expansion, with an emphasis on vehicle powertrain-agnostic solutions [59] - The strategic initiative "Evolution 2030" aims to enhance growth, operational rigor, and community engagement [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth momentum across diversified markets, with expectations for solid demand in medical and industrial sectors [16][18] - For 2026, the company anticipates sales in the range of $550-$580 million and adjusted diluted EPS between $2.30 and $2.45, assuming current market conditions persist [18] Other Important Information - The company generated $29 million in operating cash flow for Q4 and $102 million for the full year, maintaining a strong balance sheet with a cash balance of $82 million [23] - The company repurchased approximately 1.4 million shares totaling $57 million in 2025, returning $62 million to shareholders through dividends and buybacks [24] Q&A Session Summary Question: Insights on smart actuator customer preferences - Management confirmed ongoing development on both legacy and new platforms, with enhancements in cost-production efforts expected [30][31] Question: New product expectations for 2026 - Management highlighted approximately $100 million in new business awards and advancements in current sensing technologies [32] Question: Revenue impact from SyQwest and government funding - Management noted that revenue was lighter than expected due to timing of government funding but anticipates normalization in 2026 [38] Question: Visibility in industrial opportunities - Management indicated improving visibility and steady growth in industrial bookings, with a book-to-bill ratio of 1.11 [41] Question: Assessment of the transportation market - Management expressed a conservative outlook, suggesting the market may be bottoming out, with expectations for a mixed performance in light vehicle sales [42][43] Question: M&A market opportunities - Management is actively working on the M&A pipeline, focusing on diversification and niche technologies, but noted that valuations remain high [46] Question: Market assessment outside transportation - Management reported good momentum across diversified markets, with no significant concerns in any regions [48]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported sales of $137 million, a 9% increase year-over-year, with diversified end markets growing 16% [4][18] - The full year sales reached $541 million, up 5% from $515 million in 2024, with diversified end market sales accounting for 59% of overall revenue in Q4 [4][19] - The adjusted diluted earnings per share for Q4 were $0.62, up from $0.50 in Q4 2024, and for the full year, adjusted diluted earnings were $2.23, compared to $2.12 in 2024 [5][20] Business Line Data and Key Metrics Changes - Medical end market sales increased by 41% in Q4 2025, reaching $85 million for the full year, up 21% from $70 million in 2024 [6][7] - Aerospace and defense sales for 2025 were $83 million, a 20% increase from $69 million in 2024, although Q4 sales were down 4% due to program timing [9][10] - Industrial end market sales rose 16% in Q4 compared to the prior year, with full year sales at $140 million, up 12% from $125 million in 2024 [11][12] - Transportation sales were $234 million for 2025, down 7% from $250 million in 2024, with Q4 sales essentially flat at $56 million [13][14] Market Data and Key Metrics Changes - The company noted strong demand across diversified markets, with no significant concerns reported in any geographic areas [31] - The North American light vehicle market is expected to be in the $15-$16 million unit range, while European production is forecasted at $16-$17 million, and China volumes are expected to be around $32 million [16] Company Strategy and Development Direction - The company is focused on diversification as a strategic priority to drive growth and margin expansion, particularly in vehicle powertrain-agnostic solutions [34] - The Evolution 2030 strategic initiative emphasizes growth, operational rigor, and community engagement [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth momentum across diversified markets, with expectations for solid demand in medical and industrial sectors [15][17] - For 2026, the company anticipates sales in the range of $550-$580 million and adjusted diluted EPS between $2.30 and $2.45, assuming current market conditions persist [17] Other Important Information - The company generated $29 million in operating cash flow for Q4 and $102 million for the full year, maintaining a strong balance sheet with a cash balance of $82 million [20][21] - The company repurchased approximately 1.4 million shares totaling $57 million in 2025, returning $62 million to shareholders through dividends and buybacks [21] Q&A Session Summary Question: Insights on smart actuator customer preferences - Management confirmed ongoing development on both legacy and new platforms, enhancing cost-production efforts [22][23] Question: Revenue guidance and new product introductions - Management indicated that new products are contributing to revenue growth, with significant awards secured in Q4 [23][27] Question: Assessment of SyQwest revenue timing - Management noted that revenue was lighter than expected due to government funding timing but anticipates normalization in 2026 [25][26] Question: Visibility in industrial opportunities - Management expressed improved visibility and steady growth in industrial bookings, with a book-to-bill ratio of 1.11 [28] Question: Transportation market outlook - Management remains cautious but optimistic about potential improvements in the transportation sector, particularly in the second half of 2026 [29] Question: M&A market opportunities - Management is actively pursuing diversification and niche technologies but noted that valuations remain high [30] Question: Overall assessment of diversified markets - Management reported good momentum across diversified markets, with no significant concerns in any regions [31][32]

分组1 - CTS reported quarterly earnings of $0.62 per share, exceeding the Zacks Consensus Estimate of $0.60 per share, and up from $0.53 per share a year ago, representing an earnings surprise of +3.33% [1] - The company posted revenues of $137.27 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 1.04%, compared to year-ago revenues of $127.43 million [2] - CTS shares have increased approximately 29.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.7% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $136.83 million, and for the current fiscal year, it is $2.40 on revenues of $561.5 million [7] - The Zacks Industry Rank for Electronics - Miscellaneous Components is in the top 16% of over 250 Zacks industries, indicating strong performance potential [8]

CTS Corporation 4th Quarter and Full-Year 2025 Earnings Call February 10, 2026 Cautionary Statement Regarding Forward-Looking Statements Readers are cautioned that the statements contained in this document regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are, or may be deemed to be, "forward-looking statements" as defined by the "safe harbor" provisions in the Private Securities Litigation Reform Act of 1995. Such statemen ...

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