Littelfuse LFUS recently completed the acquisition of the 200mm wafer fab in Dortmund, Germany, from Elmos Semiconductor SE, a move set to become effective on Dec. 31, 2024. 

The acquisition aligns with Littelfuse’s vision of empowering a sustainable, connected, and safer world while significantly enhancing its capabilities in power semiconductors. 

The Dortmund fab positions Littelfuse to capitalize on long-term growth opportunities across various industrial sectors, including energy storage, automation, motor drives, renewables, power supplies, and charging infrastructure, reinforcing its leadership in the global industrial technology space.

Strong Product Portfolio Aids Littelfuse’s Prospects

Strategic deals are playing an important role in shaping Littelfuse’s growth trajectory. Acquiring businesses with advanced technologies has broadened the company's product offerings and strengthened its presence in key industries like automotive and industrial automation.

Building on this momentum in October, Littelfuse introduced the RCMP20 Residual Current Monitor Series, setting new standards in EV charging safety with advanced features like the largest current transformer aperture, enhanced thermal performance and high EMI resilience.

Further strengthening its industrial footprint in August, Littelfuse introduced the SRP1 Solid-State Relays, engineered for superior reliability, durability, and extended lifespan in industrial and commercial machinery applications.

In the third quarter of 2024, the company also secured significant design wins in the Electronics and Transportation sectors, such as a fuse win for a North American data center and multiple wins in the gaming, medical, and telecom industries.

LFUS Faces Challenges Despite Outperforming Peers

Littelfuse’s expanding portfolio, strong design wins in the Electronics and Transportation sectors and acquisitions are continuously helping the company fend off its competitors. 

The company has outperformed some of its direct peers, including ON Semiconductor ON, Infineon Technologies IFNNY and STMicroelectronics STM, which also operate within the advanced electronics solutions segment.

ON, IFNNY and STM shares have plunged 24.1%, 21.8% and 50.2% over the trailing 12 months, respectively.

However, Littelfuse shares have lost 12.5% in the trailing 12 months against the Zacks Computer & Technology sector’s rise of 34.2%. and the Zacks Electronics - Miscellaneous Components sector’s rally of 26.4%. 

The underperformance can be attributed to persistent macroeconomic uncertainties, cautious customer ordering patterns, weak demand in Europe and China, and product pruning actions, particularly in its Transportation segment.

LFUS Earnings Estimate Revision Shows Mixed Trend

For fourth-quarter 2024, Littelfuse expects revenues between $510 million and $540 million. Non-GAAP earnings are expected to be between $1.90 and $2.10 per share.

The Zacks Consensus Estimate for LFUS fourth-quarter 2024 revenues is pegged at $524.73 million, indicating a year-over-year decline of 1.70%. 

The consensus mark for fourth-quarter earnings is currently pegged at $2.03 cents per share, unchanged over the past 30 days and indicating a year-over-year increase of 0.50%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

LFUS Shares: Buy, Sell or Hold?

We point out that LFUS stock is not so cheap, as the Value Score of C suggests a stretched valuation at this moment.

The forward 12-month Price/Sales ratio for LFUS stands at 2.53, higher than its Zacks Electronics - Miscellaneous Components sector’s 2.50, reflecting a stretched valuation.

Littelfuse carries a Zacks Rank #3 (Hold), which implies investors should wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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