Portfolio: Zacks Deep Value

Littelfuse (NASDAQ: LFUS) presents a compelling investment opportunity as a specialized supplier of circuit protection and power control solutions positioned at the intersection of electrification megatrends. The company operates with a narrow but defendable competitive moat in critical electrical protection markets, where battery electric vehicles require five times the circuit protection content of traditional vehicles, and expanding charging infrastructure drives demand for its power semiconductor business. Strong Q2 2025 results demonstrated this positioning with 10% revenue growth to $613 million, EPS of $2.85 beating estimates by 22%, and robust free cash flow conversion of 114%, driven by particular strength in the industrial segment’s 17% organic growth from renewables, grid storage, and data centers. Strategic acquisitions have expanded capabilities in HVAC systems and e-mobility infrastructure while diversifying the company’s three-segment approach across electronics, transportation, and industrial applications.

Forward and Shiller P/E ratios in the 20s range, compared to the 10-year average of 32x, suggests valuation remains attractive, which boosts its potential return profile in addition to strong fundamentals. Near-term headwinds include tariff impact reversals, power semiconductor execution challenges, and slower customer conversion cycles, while cyclical exposure to automotive and industrial markets creates earnings volatility, but Littelfuse maintains strong market leadership in niche circuit protection categories and benefits from structural electrification trends.