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LOS ANGELES - Motorcar Parts of America, Inc. (NASDAQ: MPAA) has established a new stock trading plan under SEC Rule 10b5-1 to buy back shares as part of its ongoing $37 million repurchase authorization, the company announced today. The plan is designed to enable repurchases when typical trading restrictions are in place. The announcement comes as the stock, currently trading at $10.10, has shown remarkable momentum with a 52% gain over the past six months. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations.
The company previously reported in its fiscal third-quarter 10-Q filing that it had bought back 268,130 shares at an average price of $7.82 per share, spending $2.1 million of its repurchase program as of December 31, 2024. The current plan allows for continued repurchases up to the remaining $16.2 million authorized. While the company posted losses in the last twelve months, InvestingPro data shows analysts expect profitability in fiscal year 2025, with a consensus target price of $14 suggesting significant upside potential.
The 10b5-1 plan dictates that Motorcar Parts of America may repurchase shares within specific price, market, volume, and timing conditions. While the plan permits the company to proceed with repurchases, it is not obligated to do so and may terminate the plan at any time. There is no guarantee that any shares will be repurchased under the plan.
Motorcar Parts of America is known for remanufacturing, manufacturing, and distributing automotive aftermarket parts such as alternators, starters, and various brake components. The company caters to both the retail and professional repair markets across North America and has operational facilities in multiple countries.
This move comes as part of the company’s capital allocation strategy and reflects its confidence in the value of its stock. The information regarding the share repurchase plan is based on a press release statement from Motorcar Parts of America.
In other recent news, Motorcar Parts of America Inc reported its third-quarter fiscal year 2025 earnings, significantly exceeding Wall Street expectations. The company achieved an earnings per share (EPS) of $0.11, surpassing the forecasted $0.02, and reported revenue of $186.2 million, which also exceeded the expected $178.7 million. This performance marked a notable turnaround, with the company reporting a net income of $2.3 million compared to a net loss of $47.2 million in the same period last year. The company’s gross profit increased by 49.4%, reaching $44.9 million, and its gross margin improved to 24.1% from 17.5% the previous year. Additionally, Motorcar Parts of America successfully reduced its net debt by 26%, amounting to a decrease of $30.3 million. Analysts have noted the company’s strategic operational improvements and increased demand in its product lines as key factors in its financial success. The company also anticipates increased operating profit and gross margin for the fiscal year 2025, along with efforts to mitigate foreign exchange impacts. These developments reflect a positive trajectory for Motorcar Parts of America, driven by robust demand and operational efficiencies.
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