MTRN · Materion
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $170
Note written ·
Price against the kill line
20.0% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $170.00, on record since 10 November 2026. The shares are down 29.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $170, which would fall under the 5 November 2026 close of $177.47 and show the rebound failing. A cut to the $7.10–$7.40 adjusted earnings-per-share guidance, or backlog no longer growing from a year earlier at the next report, would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 2 October 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 567
- Revenue, change on a year (%)
- +27.5
- Gross margin (%)
- 18.3
- Operating margin (%)
- 8.9
- Net cash, cash less debt ($M)
- −383
- Price to earnings (×)
- 41.3
- Enterprise value to sales (×)
- 2.1
- Enterprise value to operating income (×)
- 32.9
All filed numbers
What Materion reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 567 | +27.5 | 18.3 | 8.9 |
| first filed | 614 | +42.2 | 17.0 | 8.4 |
| first filed | 550 | +30.8 | 14.9 | 5.1 |
| first filed | 490 | +12.1 | 13.0 | 2.2 |
| first filed | 445 | +1.9 | 19.4 | 7.9 |
| first filed | 432 | +1.4 | 19.1 | 8.5 |
| Pre-tax income ($M) | 44.2 |
| Net income ($M) four quarters: 103 | 38.3 |
| Diluted shares, change on a year (%) against the quarter to 26 September 2025 | +1.3 |
| Operating cash flow ($M) | 162 |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 15.4 |
| Debt ($M) long-term debt | 399 |
| Net cash, cash less debt ($M) | −383 |
| Deferred revenue ($M) −25.6% on a year | 34.5 |
| Backlog, orders not yet delivered ($M) +456.3% on a year | 120 |
| Receivables ($M) | 269 |
| Inventory ($M) | 486 |
| Shareholders' equity ($M) | 1,029 |
| Market value ($M) | 4,254 |
| Enterprise value, market value plus net debt ($M) | 4,637 |
| Enterprise value to sales (×) | 2.1 |
| Enterprise value to operating income (×) | 32.9 |
| Price to earnings (×) | 41.3 |
| Price to book value (×) | 4.1 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 2.6% of shares outstanding sold short, 1.8 days of average trading to cover, −11.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $706K |
| 12 monthsfrom | $0 | $18.5M |
The thesis
Materion's record backlog (up about 35% from a year earlier) and raised 2026 earnings guidance of $7.10–$7.40 per share make the shares modestly more likely than not to beat the S&P 500 over three months. The fourth-quarter report, estimated for 24 February 2027, settles whether the numbers hold.
The shares closed at $208.16 on 12 November 2026, up from $186.11 on 6 November 2026 but 26.4% lower than three months earlier (adjusted daily closes). The third-quarter report on 4 November 2026 showed adjusted earnings per share of $1.93 against $1.41 a year earlier, and the company lifted its full-year range from $6.80–$7.20. The market sold the shares through that result, then recovered part of the fall.
Bullish and bearish views on Materion Corporation
The bull case on Materion Corporation (MTRN), in brief: orders and backlog keep growing. The bear case: the shares fell through a beat and raise.
Bull case
- Orders and backlog keep growing. Backlog reached an all-time high, up about 35% from a year earlier, and incoming orders were a record, up about 25% (Materion third-quarter release, 4 November 2026). Backlog growth was about 30% at the second-quarter report on 5 August 2026.
- Guidance rose again. Full-year adjusted earnings per share guidance moved to $7.10–$7.40 from $6.80–$7.20. A news-wire headline on 4 November 2026 put the consensus estimate at $7.02, below the new range.
- Profit grew faster than sales. Value-added sales were $313.7 million, up 19% from $263.9 million. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $70.7 million, 22.5% of value-added sales against 21.0% a year earlier.
- Cash conversion was strong. Free cash flow was about $45.8 million in the quarter, 120% of net income (company release, 4 November 2026).
- Management expects a stronger fourth quarter. CEO Jugal Vijayvargiya said on 4 November 2026 that the company expects a meaningful step up in sales, supported by record backlog.
- Some analysts stayed positive after the report. Seaport Global upgraded Materion to Buy with a $250 target on 5 November 2026. Freedom Capital Markets kept Buy with a $280 target the same day, and KeyBanc kept Overweight with a $232 target.
Bear case
- The shares fell through a beat and raise. The close was $186.11 on 6 November 2026, down from $219.12 on 22 October 2026. The 52-week high is $324.99, set intraday on 5 October 2026, and the last close is 35.9% below it.
- Reported net sales missed. A news-wire headline on 4 November 2026 put net sales at $567.3 million against a $611.4 million estimate. Pass-through metal cost of $253.6 million, up from $180.9 million, explains most of the gap, but headline screens show the miss.
- Price targets came down. KeyBanc lowered its target to $232 on 5 November 2026, from the $306 it set on 7 August 2026. Freedom Capital Markets also lowered its target, to $280.
- Insiders sold into the August high. CEO Jugal Vijayvargiya sold 24,336 shares at an average $291.62 and CFO Shelly Chadwick sold 1,705 shares at $293.00 on 7 August 2026, about $8.3 million combined (SEC Form 4 filings). Director Emily Liggett sold 1,012 shares at $232.42 on 1 September 2026.
- Metals sentiment weighs on the shares. Alphastreet tied the double-digit fall on 22 October 2026 to broad selling in metals and mining shares, a pressure that company results do not control.
Price setup
The shares closed at $208.16 on 12 November 2026. They rose from $186.11 on 6 November 2026 to $202.14 on 9 November 2026 and $210.51 on 11 November 2026. The three-month price change is −26.4%.
The 200-day average is $214.46, just above the last close. The 50-day average is $246.91, well above it, because the shares traded between roughly $270 and $325 in September and early October (adjusted daily closes, as of 12 November 2026). The 5 November 2026 close of $177.47 is the lowest close in the recent decline.
The 52-week closing low is $112.92 on 17 November 2025, so the shares remain far above where they traded a year ago. Form 4 filings since the 4 November 2026 report show no open-market sales by senior executives; the latest listed filings are director share awards on 16 October 2026.
Catalysts ahead
- ~24 February 2027 (est.): Fourth-quarter and full-year 2026 results. Shows whether the stronger fourth quarter, the $7.10–$7.40 earnings guidance and year-over-year backlog growth hold.
What would change the view
A daily close below $170, which would fall under the 5 November 2026 close of $177.47 and show the rebound failing. A cut to the $7.10–$7.40 adjusted earnings-per-share guidance, or backlog no longer growing from a year earlier at the next report, would also break the case.
The risks this note tracks, each with what would confirm it:
- Share-price weakness returns despite better results, driven by metals and mining sentiment. Confirmed by: a new round of double-digit declines across metals and mining shares, as on 22 October 2026.
- Analyst targets keep falling, signalling doubts about earnings durability. Confirmed by: more target cuts like KeyBanc's cut to $232 on 5 November 2026, or rating downgrades.
- Fourth-quarter sales fail to show the step-up management described. Confirmed by: a fourth-quarter report with value-added sales growth below the 19% reported for the third quarter, or backlog growth slowing from about 35%.
- Insider selling resumes at lower prices. Confirmed by: new SEC Form 4 filings showing open-market sales by senior executives after the 4 November 2026 report.
What it trades with
Alphastreet linked the 22 October 2026 decline to selling across metals and mining shares, so Materion has traded with that group as well as on its own results. Its end markets are broader than metals prices. Electronic Materials value-added sales were $103.4 million against $79.7 million a year earlier, and Performance Materials were $178.7 million against $157.1 million (company release, 4 November 2026). Sentiment toward defense, aerospace and semiconductor equipment demand therefore also feeds the shares.
The evidence, claim by claim (8)
- Third-quarter 2026 value-added sales were $313.7 million, up 19% from $263.9 million; net sales were $567.3 million versus $444.8 million. Materion third-quarter 2026 results release (Form 8-K) · as of
- Backlog reached an all-time high, up about 35% from a year earlier; incoming orders were also a record, up about 25%. Materion third-quarter 2026 results release (Form 8-K) · as of
- Full-year 2026 adjusted earnings per share guidance raised to $7.10–$7.40 from $6.80–$7.20; third-quarter adjusted earnings per share were $1.93 versus $1.41 a year earlier. Materion third-quarter 2026 results release (Form 8-K) · as of
- Adjusted EBITDA was $70.7 million, 22.5% of value-added sales versus 21.0% a year earlier; free cash flow was about $45.8 million. Materion third-quarter 2026 results release (Form 8-K) · as of
- Pass-through metal cost was $253.6 million versus $180.9 million a year earlier; it is excluded from value-added sales. Materion third-quarter 2026 results release (Form 8-K) · as of
- KeyBanc kept Overweight and lowered its target to $232; Freedom Capital Markets kept Buy with a $280 target; Seaport Global upgraded to Buy with a $250 target. Analyst-action news headlines · as of
- CEO Jugal Vijayvargiya sold 24,336 shares at an average $291.62 and CFO Shelly Chadwick sold 1,705 shares at $293.00, about $8.3 million combined. SEC Form 4 filings · as of
- Materion closed at $208.16, 35.9% below its $324.99 intraday 52-week high of 5 October 2026, with a three-month price change of −26.4%. Split-adjusted daily closes · as of
Sources
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