SENSATA TECHNOLOGIES HOLDING PLC (ST): what the price assumes

In the published model solve dated 2026-Q2, anchored at $47.62, SENSATA TECHNOLOGIES HOLDING PLC (ST) is priced for +13.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/ST

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.3pp.

How unusual the bet is: within-range

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.1%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 15.8%); the trailing year was depressed.

Bullet Takeaways

• Sensata makes mission-critical sensors whose content per vehicle rises with each new emissions, safety, and electrification requirement, and it is shifting its mix toward higher-margin Aerospace, Defense and Industrial segments running roughly 27% to 28% operating margins.
• The biggest risk is that the price outruns the fundamentals: no valuation method reaches about $45.32, while auto production is forecast down roughly 2% in 2026 and precious-metal inflation is running about 100% year over year against the sensors' cost base.
• Watch the pace of aerospace and industrial growth versus automotive softness, whether management holds its committed 19% annual margin floor, and net-debt reduction against the roughly $2.23 billion balance.

Bull Case

Valuing a sensor company is really about content per unit, not units, and that is where Sensata is interesting. The 10-K explains that its end market has "historically been driven by three principal trends: growth in the number of vehicles produced globally and expansion in the number and" sophistication of the systems those vehicles carry. Sensata makes the small, mission-critical devices that "translate a physical parameter" such as pressure, temperature, or position into a signal a vehicle's electronics can act on, and every tightening of emissions, safety, and electrification rules adds more of them per car. So even when global auto production is flat or falling, Sensata's revenue per vehicle can rise, which is the whole bull case in one sentence.

The recent reorganization sharpens that story. Sensata dissolved its old segments and built three new ones, Automotive, Industrials, and Aerospace, Defense and Commercial Equipment, and the non-automotive pieces are now the growth and margin engine. In the first quarter of 2026, Aerospace, Defense and Commercial Equipment revenue reached about $226 million at a roughly 28% segment operating margin, and Industrials about $184 million at roughly 27%, both well above the automotive segment's still-healthy 23.5%. The 10-K notes the company aims to "leverage innovation from the automotive side of the business, ensuring scalability and reliability" across these markets. Double-digit organic growth in aerospace and defense is diversification that lifts the blended margin.

Management is running the business for margin protection and cash. First-quarter adjusted operating margin was about 18.6%, free cash flow of roughly $105 million represented 83% conversion, and net leverage fell as debt came down. The CFO put a floor under it, committing to a 19% annual margin even if automotive markets weaken, and the share count has fallen about 2% a year, evidence of real buyback deployment. A company with rising content per vehicle, a growing high-margin aerospace and industrial mix, and an explicit margin-floor commitment is defending its economics deliberately rather than hoping the cycle cooperates.

Bear Case

The moat-erosion question is where the bear starts, because Sensata's advantage is being chipped at from two sides. Its core has long been automotive sensing, and the 10-K itself flags that customers are "adopting specific environmental requirements, including renewable-energy commitments, emissions-reduction targets" that reshape vehicle architectures, while the shift to electric powertrains removes some of the combustion-related sensing content Sensata historically supplied even as it adds new content elsewhere. The company is betting the new content outweighs the lost content, but that is a bet, not a certainty, and the transition is where a supplier's position is most vulnerable to being designed out.

The near-term pressure is a shrinking end market and cost inflation. The IHS forecast calls for a roughly 2% decline in global auto production in 2026, and automotive is still Sensata's largest segment at about $525 million of quarterly revenue. On top of soft volumes, the company is absorbing precious-metal inflation running roughly 100% year over year, a direct hit to the cost of the materials inside its sensors. Management's 19% margin-floor commitment is itself an admission that margins are under threat; a floor is something you promise when the market fears the number could fall below it.

The valuation leaves no room for the moat to slip. At about $45.32 (July 10, 2026), no valuation family reaches the price. The asset methods are extreme because trailing return on equity collapsed to under 2% on recent charges, and the earnings-power and peer-multiple methods land well below the price. Even reading operating income on the healthier mid-cycle basis rather than the charge-depressed trailing basis, the price sits above what the methods support. Net debt of about $2.23 billion runs roughly 3.8 times pre-tax operating income at interest coverage near 4 times, manageable but not trivial for a cyclical supplier. The bet the price makes is that content-per-vehicle growth and the aerospace mix overcome falling auto volumes, metal inflation, and the electrification transition all at once, with little margin for any one of them to go wrong.

Valuation

Sensata is a case where reading the earnings base correctly is half the analysis. The trailing operating income in the raw EDGAR data is depressed by recent charges, showing a margin near 7%, while the business on a mid-cycle basis and on the recent GAAP quarterly result runs closer to 15% operating margin, and adjusted margin near 18.6%. The two bases differ by more than 10%, so they should be read as different measurement lenses, not one substituted for the other. On either basis, at $45.32 (July 10, 2026) no valuation family reaches the price: peer multiples land near $20 to $26, the earnings-power methods near $19 to $23, and the asset methods far lower because trailing return on equity fell under 2% on the charges. The price is a bet beyond what any standard trailing frame supports.

The most concrete way to see the bet is the margin the price needs versus what the business shows. To justify the current level, Sensata has to move its whole-company operating margin up toward the low-teens on a sustained basis, from a depressed trailing figure, while its largest end market shrinks. The recent segment margins, roughly 23% to 28% in aerospace, defense, and industrials, are the reason to believe that mix shift can carry it, but the automotive segment is the anchor, and IHS expects auto production down about 2% in 2026. The price works if the high-margin non-automotive segments keep growing double-digits and lift the blend; it does not if automotive weakness drags the average down faster than the mix improves.

Solvency bounds the downside but does not cushion the valuation. Net debt of about $2.23 billion runs roughly 3.8 times pre-tax operating income, interest coverage is near 4 times, and free cash flow of about $105 million in the quarter at 83% conversion is funding both debt reduction and buybacks that shrank the share count about 2% a year. The company is not burning cash, and the balance sheet is serviceable, but it carries enough leverage that a cyclical downturn in automotive would tighten the margin math. A buyer at today's price is underwriting a successful mix shift toward aerospace and industrial content, sustained content-per-vehicle gains, and margin recovery through metal inflation, with every trailing method sitting below the price as the measure of how much is riding on that transition.

Catalysts

The first-quarter 2026 print in late April set the frame: revenue of about $935 million, up 2.6% year over year with 4.2% organic growth, adjusted EPS up about 10% to $0.86, and adjusted operating margin near 18.6%. By segment, Automotive was about $525 million at a 23.5% margin, Aerospace, Defense and Commercial Equipment about $226 million at 28.1%, and Industrials about $184 million at 27.1%. For the second quarter, management guided revenue of $950 million to $980 million and adjusted EPS of $0.89 to $0.95, with adjusted operating margin expanding toward 19.2% to 19.4%.

The forces to watch are the ones management named. CEO Stephan Von Schuckmann pointed to demand risk from geopolitical events and oil prices, and the CFO reiterated a 19% annual margin-floor commitment with readiness to act if automotive markets deteriorate. The two swing factors into the back half of 2026 are the roughly 2% forecast decline in global auto production and precious-metal inflation running about 100% year over year, both of which press on the margin that the valuation depends on. The next quarterly report is the key checkpoint on whether the aerospace and industrial mix can keep lifting the blended result against those headwinds.

Peer Cohorts (Per Segment, With Filing Citations)

Automotive (reported)

• ROK (Rockwell Automation, Inc.)
• FY2025 10-K: …sensing, industrial components, and configured-to-order products. The Software & Control segment includes control and visualization software and hardware, digital twin, simulation and information software, and network and security infrastructure. The Lifecycle Services segment includes digital consulting,…
• FY2025 10-K: …Meritor Automotive, Inc., filed as Exhibit 2.1 to the Company's Current Report on Form 8-K dated October 10, 1997, is hereby incorporated by reference. 10-h-2 Employee Matters Agreement dated as of September 30, 1997 by and between the Company and Meritor Automotive, Inc., filed as Exhibit 2.2 to the Company's…
• PH (PARKER-HANNIFIN CORPORATION)
• FY2025 10-K: …and custom products are also used in the replacement of original products. We market our Diversified Industrial Segment products primarily through field sales employees and independent distributors located throughout the world. Aerospace Systems Segment . Our Aerospace Systems Segment products are used in commercial…
• FY2025 10-K: Systems Segment designs, manufactures and provides aftermarket support for highly engineered airframe and engine solutions for both OEMs and end users. Our components and systems are utilized across commercial transport, defense fixed wing, business jets, regional transport, helicopter and energy applications.…
• FLS (FLOWSERVE CORP)
• FY2025 10-K: …sales and services are derived from sales of replacement equipment, as well as maintenance, advanced diagnostic, repair and retrofitting services ("Aftermarket"). Each of our two business segments generates Original Equipment and Aftermarket revenues. 72 The following table presents our customer revenues…
• FY2025 10-K: …Through our manufacturing platform and global network of QRCs, we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics and turnkey maintenance programs. As of December 31, 2025, we have approximately 16,000 employees globally and a footprint of manufacturing facilities and…
• XYL (Xylem Inc.)
• FY2025 10-K: …Notes due 2046. Incorporated by reference to Exhibit 4.1 of Xylem Inc.'s Form 8-K filed on October 11, 2016 (CIK No. 1524472, File No. 1-35229). 10.1 # Xylem 2011 Omnibus Incentive Plan (Amended and Restated as of February 24, 2016). Incorporated by reference to Exhibit 10.6 of Xylem Inc.'s Form 10-K Annual Report…
• FY2025 10-K: …0001524472 false 2025 FY http://www.xyleminc.com/20251231#RestructuringAndAssetImpairmentLosses http://fasb.org/us-gaap/2025#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2025#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2025#OtherAccruedLiabilitiesNoncurrent…
• IEX (IDEX CORP)
• FY2025 10-K: …Albans, Vermont and Santa Ana, California), Canada (Ottawa), England (Dorset, Stevenage and Whetstone), the Netherlands (Didam, Eerbeek, Hapert and Wijchen) and India (Pune). • Mott Corporation specializes in the design, customization and manufacturing of sintered porous metal components and engineered solutions used…
• FY2025 10-K: 2023-01-01 2023-12-31 0000832101 us-gaap:OperatingSegmentsMember iex:MaterialProcessingTechnologiesMember iex:HealthAndScienceTechnologiesMember 2025-01-01 2025-12-31 0000832101 us-gaap:OperatingSegmentsMember iex:MaterialProcessingTechnologiesMember iex:HealthAndScienceTechnologiesMember 2024-01-01 2024-12-31…
• EMR (EMERSON ELECTRIC CO.)
• FY2025 10-K: …technology and software company that provides innovative solutions for customers in a wide range of end markets around the world. Through its leading automation portfolio, Emerson helps process, hybrid and discrete manufacturers optimize operations, protect personnel, reduce emissions and achieve their sustainability…
• FY2025 10-K: -10-01 2023-09-30 0000032604 us-gaap:OperatingSegmentsMember emr:IntelligentDevicesMember srt:AmericasMember emr:DiscreteAutomationMember 2023-10-01 2024-09-30 0000032604 us-gaap:OperatingSegmentsMember emr:IntelligentDevicesMember emr:AsiaMiddleEastAndAfricaMember emr:DiscreteAutomationMember 2023-10-01 2024-09-30…
• AME (AMETEK, Inc.)
• FY2025 10-K: 224; AMETEK, Inc. 2011 Omnibus Incentive Compensation Plan, dated as of May 3, 2011 (the "2011 Plan") . Exhibit 4 to Form S-8 dated May 6, 2011, SEC File No. 1-12981. 4.4† Amendment No. 1 to the 2011 Plan. Exhibit 4.5 to 2012 Form 10-K, SEC File No. 1-12981. 4.5† AMETEK, Inc. 2020 Omnibus Incentive Compensation Plan…
• FY2025 10-K: 2025. 10.10† AMETEK, Inc. Supplemental Executive Retirement Plan, amended and restated as of October 1, 2018 . Exhibit 10.3 to Form 10-Q dated September 30, 2018, SEC File No. 1-12981. 10.11* Form of Executive Change of Control Separation Agreement for executive officers 10.12* AMETEK, Inc. 2020 Omnibus Incentive…
• DOV (DOVER Corp)
• FY2025 10-K: Climate & Sustainability Technologies. For financial information about our segments and geographic areas, see Note 19 - Segment Information in the consolidated financial statements in Item 8 of this Form 10-K. Engineered Products Our Engineered Products segment provides a wide range of equipment, components, software,…
• FY2025 10-K: …of traditional and clean fuels (including liquefied natural gas, hydrogen, and electric vehicle charging), cryogenic gases, and other hazardous substances along the supply chain, and safe and efficient operation of convenience retail, retail fueling and vehicle wash establishments. • Imaging & Identification segment…

Industrials (reported)

• TEL (TE CONNECTIVITY PLC)
• FY2025 10-K: …as compared to $3.8 billion in the first quarter of fiscal 2025. This increase reflects sales growth in both the Industrial Solutions and Transportation Solutions segments. The Industrial Solutions segment will benefit from the acquisition of Richards Manufacturing. We expect diluted earnings per share from…
• FY2025 10-K: …and consumer applications. The Transportation Solutions segment's major competitors include Yazaki, Aptiv, Sumitomo, Sensata, Honeywell, Molex, and Amphenol. Industrial Solutions The Industrial Solutions segment is a leading supplier of products that connect and distribute power, data, and signals. The primary…
• AME (AMETEK, Inc.)
• FY2025 10-K: …$ 761.9 million, respectively, in purchase obligations outstanding, which primarily consisted of contractual commitments to purchase certain inventories at fixed prices. The Company does not provide significant guarantees on a routine basis. The Company primarily issues guarantees, stand-by letters of credit and…
• FY2025 10-K: …of the Standard and Poor's 500 and the Russell 1000 Indices. Products and Services AMETEK's products are marketed and sold worldwide through two operating groups: Electronic Instruments ("EIG") and Electromechanical ("EMG"). Electronic Instruments is a leader in the design and manufacture of advanced instruments for…
• DOV (DOVER Corp)
• FY2025 10-K: , retail fueling and vehicle wash establishments. • Our Imaging & Identification segment supplies precision marking and coding, product traceability, brand protection and digital textile printing equipment, as well as related consumables, software and services to the global packaged and consumer goods, pharmaceutical,…
• FY2025 10-K: …services and software, represents approximately 40% of our total revenue. We see the following commonalities characterizing the majority of Dover businesses: • Attractive Markets : Our businesses generally operate in strategically attractive niche industrial markets with proven and well-understood long-term growth…
• ROK (Rockwell Automation, Inc.)
• FY2025 10-K: …Current Report on Form 8-K dated July 1, 2022, is hereby incorporated by reference. 10-j-2 $500,000,000 364-Day Term Loan Agreement dated as of May 16, 2025, among the Company, the Banks listed on the signature pages thereto, Bank of America, N.A., as Administrative Agent, U.S. Bank National Association, as…
• FY2025 10-K: …in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as…
• VNT (Vontier Corporation)
• FY2025 10-K: …steel, plastics and other resins, cast iron, aluminum and copper. Prices of oil and gas affect our costs for freight and utilities. We purchase raw materials from a large number of independent sources around the world. No single supplier is material, although for some components that require particular specifications…
• FY2025 10-K: …industrial technology company uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. The Company operates through three reportable segments which align to the Company's three operating segments: (i) Mobility Technologies, which…
• ITT (ITT INC.)
• FY2025 10-K: …end-users. IP's customers operate in global infrastructure and natural resource markets such as energy, chemical and petrochemical, pharmaceutical, general industrial, marine, mining, pulp and paper, food and beverage, power generation and biopharmaceutical. IP's marketplace-recognized brands include Goulds Pumps TM…
• FY2025 10-K: …financial statements upon adoption. NOTE 3 SEGMENT INFORMATION The Company's segments are reported on the same basis used by our chief operating decision maker (CODM) for evaluating performance and for allocating resources. The Company's CODM is the President and Chief Executive Officer. The CODM allocates resources…

Aerospace, Defense, and Commercial Equipment (reported)

• HEI (HEICO CORPORATION)
• FY2025 10-K: …and business aircraft, aircraft engines and related components and equipment. Due in large part to our established industry presence, we enjoy strong customer relations, name recognition and repeat business. We sell our products to a broad customer base consisting of domestic and foreign commercial and cargo…
• FY2025 10-K: …misappropriation or obsolescence from occurring by developing new techniques and improving existing methods and processes, which we will continue on an ongoing basis as dictated by the technological needs of our business. We believe that, based on our competitive pricing, reputation for high quality, short lead time…
• TDG (TransDigm Group Incorporated)
• FY2025 10-K: …that they will have a reduced incentive to certify another supplier because of the cost and time of the technical design and testing certification process. In addition, we believe that the availability, dependability and safety of our products are reasons for our customers to continue long-term supplier…
• FY2025 10-K: …following table sets forth, for the periods indicated, certain financial information by reportable segment, which includes a reconciliation of EBITDA As Defined to consolidated income from continuing operations before income taxes (in millions): Fiscal Year Ended September 30, 2025 Power & Control Airframe…
• CW (CURTISS-WRIGHT CORPORATION)
• FY2025 10-K: …The commercial aerospace business is primarily impacted by OEM production rates of new aircraft, while the defense business is primarily impacted by government funding and spending on new programs, primarily driven by the U.S. Government. Certain industrial businesses within our Aerospace & Industrial segment are…
• FY2025 10-K: …avionics and electronics, flight test equipment, and aircraft data management solutions. The Naval & Power reportable segment is comprised of businesses that primarily provide products to the naval defense and power & process markets, and to a lesser extent, the aerospace defense markets. The products offered include…
• WWD (WOODWARD, INC.)
• FY2025 10-K: …technology and design, product performance, and conformity with customer specifications. Additional factors are customer service and support, including on-time delivery and customer partnering, product quality, price, reputation, and local presence. Both of our segments operate in uniquely competitive environments.…
• FY2025 10-K: …to new product concepts. We believe this collaboration allows us to develop technology, new systems, and products that are aligned with our customers' needs and future performance, which increases the likelihood that our systems and components will be selected for inclusion in the platforms developed by our…
• TDY (TELEDYNE TECHNOLOGIES INC)
• FY2025 10-K: …systems engineering and integration, advanced technology application, software development and manufacturing solutions for defense, space, environmental and energy applications. Business segment results include net sales and operating income by segment but excludes corporate office expenses. Corporate expense…
• FY2025 10-K: …countermeasures, weapon systems, space, wireless and satellite communications and terminals and test equipment. We provide onboard avionics systems and ground-based applications that allow civil and military aircraft operators to access, manage and utilize their data more efficiently. Our products include aircraft…
• MRCY (MERCURY SYSTEMS, INC.)
• FY2025 10-K: …the U.S. government and original equipment manufacturers ("OEM") commercial aerospace companies. Our mission-critical products and solutions are deployed by our customers for a variety of applications including sensor and radar processing, electronic warfare, avionics, weapons, and command, control, communications,…
• FY2025 10-K: …by the growing demand for domestically designed, sourced and manufactured electronics for critical aerospace, defense and intelligence applications. Our primary market positioning is centered on making commercially available technologies profoundly more accessible to the aerospace and defense sector, specifically as…
• CR (CRANE COMPANY)
• FY2025 10-K: …as well as in Part II, Item 8 under Note 4, "Segment Information," in the Notes to Consolidated Financial Statements for sales, operating profit and assets employed by each segment. Aerospace & Advanced Technologies The Aerospace & Advanced Technologies segment supplies critical components and systems, including…
• FY2025 10-K: …sales growth and a slight foreign exchange benefit. We expect an improvement in operating profit driven primarily by productivity benefits and operating leverage on higher volumes, lower transaction related expenses, higher pricing net of inflation and contributions from the Druck, Panametrics, Reuter-Stokes, and…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.