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CTS
(NYSE:CTS)
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Rating:71Outperform
Price Target:
$65.00
▲(14.90% Upside)
Action:Reiterated
Date:10/28/26
The score is driven by strong financial performance (improving margins, re-accelerating growth, low leverage, and solid FCF) and a notably positive earnings update with raised 2026 guidance and strong bookings. Offsetting this is a mixed technical picture (negative MACD and price below the 100-day average) and only moderate valuation support (P/E 23 and a very low dividend yield).
Positive Factors
Diversified end-market growth
Growth is broadening beyond a single end market, with diversified revenue reaching 60% of sales and increasing 7% year over year. This mix reduces reliance on transportation, supports more resilient demand, and gives CTS multiple secular avenues for sustained expansion.
Negative Factors
Gross-margin normalization risk
The record 42.2% adjusted gross margin was partly supported by favorable mix and timing that may not persist. Subsequent normalization could reduce operating leverage and moderate earnings growth, even if underlying execution and demand remain healthy.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified end-market growth
Growth is broadening beyond a single end market, with diversified revenue reaching 60% of sales and increasing 7% year over year. This mix reduces reliance on transportation, supports more resilient demand, and gives CTS multiple secular avenues for sustained expansion.
Read all positive factors
CTS (CTS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.78B
Dividend Yield0.26%
Average Volume (3M)246.40K
Price to Earnings (P/E)24.3
Beta (1Y)1.39
Revenue Growth7.47%
EPS Growth29.54%
CountryUS
Employees3,492
SectorGeneral
Sector StrengthN/A
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)2.57
Shares Outstanding28,556,194
10 Day Avg. Volume219,749
30 Day Avg. Volume246,395
Financial Highlights & Ratios
PEG Ratio1.24
Price to Book (P/B)2.29
Price to Sales (P/S)2.33
P/FCF Ratio14.65
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue2.87
Enterprise Value/Gross Profit7.14
Enterprise Value/Ebitda11.67
Forecast
1Y Price Target
$73.50Price Target Upside29.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)2.65
Revenue Forecast (FY)$573.53M
CTS Business Overview & Revenue Model
Company Description
CTS Corporation is a global enterprise specializing in the production and distribution of vital electronic components, such as sensors, actuators, and connectivity solutions, with operations spanning North America, Europe, and Asia. Its extensive ...
How the Company Makes Money
CTS primarily makes money by selling engineered electronic components and sensing solutions to OEMs and other manufacturers, with revenue recognized from product shipments (and, where applicable, under contract terms for engineered/custom products...
CTS Earnings Call Summary
Earnings Call Date:Oct 27, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 09, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall. CTS reported revenue growth, record gross margin and adjusted EPS, strong cash generation, healthy bookings, significant medical and industrial momentum, a substantial aerospace and defense backlog, progress in transportation initiatives, and raised full-year 2026 guidance. The main challenges were medical book-to-bill timing, a year-over-year Aerospace and Defense sales decline, expected normalization from unusually favorable gross-margin mix, transportation market uncertainty, and Millar EBITDA not initially being accretive.Positive Updates
Revenue Growth and Record Profitability
Third-quarter revenue was $149.6 million, up 5% year-over-year and 3% sequentially. Adjusted gross margin reached a record 42.2%, up 330 basis points year-over-year; adjusted EBITDA margin was 24.7%, up approximately 90 basis points; and adjusted diluted EPS was a record $0.77, compared with $0.60 in the prior-year quarter.
Negative Updates
Medical Bookings Below Replacement Level
Medical new business wins were affected by the timing of orders, resulting in a book-to-bill ratio of 0.66 for the quarter.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue Growth and Record Profitability
Third-quarter revenue was $149.6 million, up 5% year-over-year and 3% sequentially. Adjusted gross margin reached a record 42.2%, up 330 basis points year-over-year; adjusted EBITDA margin was 24.7%, up approximately 90 basis points; and adjusted diluted EPS was a record $0.77, compared with $0.60 in the prior-year quarter.
Read all positive updates
Company Guidance
Assuming the continuation of current market conditions for the full year 2026, sales are now expected in the range of $580 million-$590 million and adjusted diluted EPS in the range of $2.78-$2.88; the full-year tax rate is expected to be in the range of 20%-22%, excluding discrete items. Diversified end-market demand is expected to remain solid, medical is expected to show continued momentum, A&D revenue is expected to remain strong in the fourth quarter given the robust order backlog, industrial OEM and distribution demand is expected to remain healthy, and global light vehicle production volumes are forecasted to be flat to modestly down. Millar is expected to generate revenues of approximately $30 million on an annual basis, be accretive in the second half of 2027, and provide EPS accretion in the second half of 2027; gross margins are expected to be good in the next few quarters, but maybe not quite at the same level as the 42%.CTS Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
78
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 571.16M | 542.16M | 515.54M | 550.55M | 586.87M | 512.92M |
| Gross Profit | 230.03M | 208.73M | 188.21M | 188.19M | 209.61M | 183.24M |
| EBITDA | 140.74M | 123.81M | 108.17M | 109.50M | 113.22M | -32.58M |
| Net Income | 73.86M | 65.32M | 58.11M | 60.53M | 59.58M | -41.87M |
Balance Sheet | ||||||
| Total Assets | 822.09M | 764.31M | 766.11M | 741.17M | 748.49M | 664.46M |
| Cash, Cash Equivalents and Short-Term Investments | 143.88M | 82.30M | 94.33M | 163.88M | 156.91M | 141.47M |
| Total Debt | 88.77M | 121.91M | 117.09M | 96.86M | 109.36M | 74.75M |
| Total Liabilities | 235.37M | 212.53M | 235.26M | 214.34M | 242.26M | 200.88M |
| Stockholders Equity | 586.72M | 551.79M | 530.85M | 526.82M | 506.22M | 463.58M |
Cash Flow | ||||||
| Free Cash Flow | 108.31M | 86.37M | 80.64M | 74.07M | 106.86M | 70.50M |
| Operating Cash Flow | 123.47M | 102.11M | 99.29M | 88.81M | 121.20M | 86.14M |
| Investing Cash Flow | -15.05M | -18.51M | -140.56M | -18.10M | -111.19M | -15.90M |
| Financing Cash Flow | -74.21M | -98.44M | -27.93M | -65.40M | 4.34M | -20.71M |
CTS Technical Analysis
Positive
56.57
Price Trends
57.42
Positive
60.35
Positive
57.16
Positive
Market Momentum
-0.28
Negative
66.22
Neutral
73.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTS, the sentiment is Positive. The current price of 56.57 is below the 20-day moving average (MA) of 57.22, below the 50-day MA of 57.42, and below the 200-day MA of 57.16, indicating a bullish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 66.22 is Neutral, neither overbought nor oversold. The STOCH value of 73.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CTS.
CTS Risk Analysis
CTS disclosed 38 risk factors in its most recent earnings report. CTS reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CTS Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.19B | 55.02 | 11.27% | 0.12% | 25.26% | -4.61% | |
71 Outperform | $1.78B | 24.31 | 13.02% | 0.26% | 7.47% | 29.54% | |
70 Outperform | $5.95B | 16.29 | 12.57% | 1.17% | 3.84% | ― | |
65 Neutral | $9.83B | 286.78 | 1.47% | 0.79% | 18.72% | -74.52% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
52 Neutral | $808.68M | 202.37 | 1.08% | ― | 11.28% | ― | |
51 Neutral | $531.11M | -14.34 | -5.46% | 1.34% | 1.36% | 32.69% |
* General Sector Average
CTS
CTS
63.44
22.80
56.11%
BELFB
Bel Fuse Inc
235.73
85.29
56.70%
LFUS
Littelfuse
404.08
163.41
67.90%
MEI
Methode Electronics
15.43
8.93
137.24%
ST
Sensata
41.30
9.24
28.83%
VPG
Vishay Precision Group
59.16
20.83
54.34%
CTS Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
CTS showcases strong growth and diversified market momentum
Positive
Oct 27, 2026
In an investor presentation dated October 2026, CTS reported last-12-month revenue of $571 million as of September 2026, a 10% compound annual growth rate since 2019, with adjusted EBITDA margin at 24% and adjusted diluted EPS at $2.75, reflecting...
Business Operations and StrategyFinancial Disclosures
CTS boosts guidance on strong Q3 2026 performance
Positive
Oct 27, 2026
On October 27, 2026, CTS reported third-quarter 2026 results showing sales of $149.6 million, up 5% year over year, with diversified end-market revenue growing 7% and transportation sales rising 2%, while net income climbed to $17.8 million and ad...
Business Operations and StrategyFinancial Disclosures
CTS Lifts 2026 Outlook on Strong Q2 Results
Positive
Jul 28, 2026
CTS Corporation reported on July 28, 2026, that second-quarter 2026 sales rose 7% year over year to $144.8 million, with diversified end-market revenue up 15% and now accounting for 59% of total sales, while transportation revenue slipped 2%. Net ...
Business Operations and StrategyFinancial Disclosures
CTS Highlights Growth Strategy in July 2026 Investor Presentation
Positive
Jul 28, 2026
In July 2026, CTS released an investor presentation outlining its financial profile and growth strategy, highlighting last-twelve-month revenue of $564 million, an adjusted EBITDA margin of 24% and adjusted diluted EPS of $2.58, supported by a 10%...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.