<div id="readability-page-1"><div><p>David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.'  So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company.  As with many other companies <strong>Sensata Technologies Holding plc</strong> (NYSE:ST) makes use of debt.  But should shareholders be worried about its use of debt?</p><p>This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.</p><h2> When Is Debt Dangerous? </h2><p> Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow.   In the worst case scenario, a company can go bankrupt if it cannot pay its creditors.  However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control.  Of course, debt can be an important tool in businesses, particularly capital heavy businesses.  When we examine debt levels, we first consider both cash and debt levels, together. </p> <h2> How Much Debt Does Sensata Technologies Holding Carry? </h2><p> The chart below, which you can click on for greater detail, shows that Sensata Technologies Holding had US$3.18b in debt in September 2025; about the same as the year before.    However, because it has a cash reserve of US$791.3m, its net debt is less, at about US$2.39b.  </p><figure><img height="1052" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/82392972-debt-equity-history-analysis-1-dark-2/1766398295598?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="1642" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/82392972-debt-equity-history-analysis-1-dark-2/1766398295598"/><figcaption>NYSE:ST Debt to Equity History December 22nd 2025</figcaption></figure><h2> A Look At Sensata Technologies Holding's Liabilities </h2><p> The latest balance sheet data shows that Sensata Technologies Holding had liabilities of US$794.4m due within a year, and liabilities of US$3.56b falling due after that.   Offsetting this, it had US$791.3m in cash and US$725.0m in receivables that were due within 12 months.   So its liabilities outweigh the sum of its cash and (near-term) receivables by US$2.84b.   </p><p> Sensata Technologies Holding has a market capitalization of US$4.94b, so it could very likely raise cash to ameliorate its balance sheet, if the need arose.  But we definitely want to keep our eyes open to indications that its debt is bringing too much risk.  </p><p><span> Check out our latest analysis for Sensata Technologies Holding </span></p> <p> We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short).  The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio). </p> <p> Sensata Technologies Holding's debt is 2.9 times its EBITDA, and its EBIT cover its interest expense 3.9 times over.  Taken together this implies that, while we wouldn't want to see debt levels rise, we think it can handle its current leverage.        The good news is that Sensata Technologies Holding grew its EBIT a smooth 34% over the last twelve months.  Like a mother's loving embrace of a newborn that sort of growth builds resilience, putting the company in a stronger position to manage its debt.      There's no doubt that we learn most about debt from the balance sheet.  But it is future earnings, more than anything, that will determine Sensata Technologies Holding's ability to maintain a healthy balance sheet going forward.  So if you're focused on the future you can check out this <strong>free</strong> report showing analyst profit forecasts. </p><p> Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it.   So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow.    During the last three years, Sensata Technologies Holding generated free cash flow amounting to a very robust 80% of its EBIT, more than we'd expect.  That positions it well to pay down debt if desirable to do so.   </p> <h2>Our View</h2><p> Sensata Technologies Holding's conversion of EBIT to free cash flow suggests it can handle its debt as easily as Cristiano Ronaldo could score a goal against an under 14's goalkeeper.   But, on a more sombre note, we are a little concerned by its interest cover.      All these things considered, it appears that Sensata Technologies Holding can comfortably handle its current debt levels.  Of course, while this leverage can enhance returns on equity, it does bring more risk, so it's worth keeping an eye on this one.    There's no doubt that we learn most about debt from the balance sheet.  However, not all investment risk resides within the balance sheet - far from it.     <strong> We've identified 1 warning sign </strong> with Sensata Technologies Holding , and understanding them should be part of your investment process.   </p> <p> When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt <strong>100% free</strong>, right now. </p><div><p>Mobile Infrastructure for Defense and Disaster</p><p>The next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.</p><p>Get the investor briefing before the next round of contracts</p><p><span>Sponsored On Behalf of CiTech</span></p></div></div></div>

<p>The article analyzes Sensata Technologies Holding's (NYSE:ST) financial health, focusing on its debt levels. As of September 2025, the company had $3.18 billion in debt and $791.3 million in cash, resulting in a net debt of $2.39 billion. Despite liabilities exceeding cash and receivables by $2.84 billion, the company has a market cap of $4.94 billion, suggesting it could raise cash if needed. Sensata's debt is 2.9 times its EBITDA, with an interest cover of 3.9 times. The company generated free cash flow amounting to 80% of its EBIT, indicating it can manage its debt comfortably.</p>

Is Sensata Technologies Holding (NYSE:ST) A Risky Investment?