Stock Analysis & Ideas

Superior Industries (NYSE:SUP): This Penny Stock is Set to Outperform

Story Highlights

With the ongoing momentum in its business, Superior Industries’ stock appears to be an attractive long-term bet. SUP stock also has an Outperform Smart Score on TipRanks.

Investors willing to put some of their cash into Penny stocks could leverage TipRanks’ Penny Stocks Screener to find attractive investment options. But before investing, it’s recommended that investors learn about the merits and demerits of investing in Penny stocks. Using our Screener, we came across Superior Industries International (NYSE:SUP), which has an Outperform Smart Score on TipRanks. Supporting the bull case is the company’s strong financial performance. Let’s take a closer look at the SUP stock. 

Is SUP Stock a Buy or Hold?

Superior Industries designs and manufactures aluminum wheels for OEMs (Original Equipment Manufacturers). Despite macro headwinds, the company continues to perform well and has delivered solid sales and adjusted EBITDA growth in Q3. 

SUP’s net sales jumped 31% year-over-year to $406 million, while its adjusted EBITDA recorded an increase of 21% in Q3. The company’s CEO, Majdi Abulaban, said, “Our strong performance in the third quarter reflects the agility of our teams as we delivered another quarter of solid margin expansion in a challenging operating environment.” 

Abulaban added that despite macro-economic headwinds, the company witnessed “small but meaningful improvements in light vehicle production in the North American and EU regions.” This gives him confidence that a recovery in light vehicle production will help the company to deliver profitable growth. 

Following the Q3 results, Barrington analyst Gary Prestopino maintained his Buy recommendation on the SUP stock. Further, his price target range of $10-$15 implies a massive upside potential of 130-246%. 

Prestopino maintained his “adjusted EBITDA estimates for 2022 and 2023 at $165 million and $185 million, respectively.” The analyst expects SUP to benefit from its leading premium wheel technologies.

Bottom Line 

The ongoing momentum in SUP’s business and a recovery in light vehicle production could significantly lift Superior Industries’ stock. Further, its growing adjusted EBITDA, differentiated portfolio, and opportunities in the premium wheels segment augur well for growth. 

SUP stock carries an Outperform Smart Score of eight on 10, according to our data-driven stock score. 

Disclosure

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