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Eltek Ltd (ELTK)
NASDAQ:ELTK
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Eltek
(NASDAQ:ELTK)
Rating:72Outperform
Price Target:
$11.50
▲(11.87% Upside)
Eltek (ELTK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$69.02M
Dividend Yield1.85%
Average Volume (3M)8.69K
Price to Earnings (P/E)22.2
Beta (1Y)0.20
Revenue Growth6.75%
EPS Growth-52.37%
CountryUS
Employees329
SectorTechnology
Sector Strength86
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.05
Shares Outstanding6,714,040
10 Day Avg. Volume8,115
30 Day Avg. Volume8,686
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue1.37
Enterprise Value/Gross Profit6.37
Enterprise Value/Ebitda10.97
Forecast
1Y Price Target
$11.50Price Target Upside11.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Eltek Business Overview & Revenue Model
Company DescriptionEltek (ELTK) is a technology company specializing in the design and manufacturing of advanced power and thermal management solutions. It operates primarily in the telecommunications and data center sectors, providing products such as power systems, power supplies, and thermal management solutions that are crucial for maintaining the reliability and efficiency of electronic systems. Eltek focuses on innovation and sustainability, serving a global customer base with its high-performance solutions.
How the Company Makes MoneyEltek generates revenue through the sale of its power and thermal management products, which include power systems for telecommunications networks and data centers. The company utilizes a direct sales model, targeting both original equipment manufacturers (OEMs) and end-users. Key revenue streams include product sales, maintenance contracts, and service agreements. Eltek has established significant partnerships with major telecommunications companies and data center operators, which contribute to its earnings through long-term contracts and repeat business. Additionally, the company invests in research and development to create innovative solutions that can command premium pricing, further enhancing its revenue potential.
Eltek Earnings Call Summary
Earnings Call Date:Aug 14, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and improved profitability, driven by successful capacity expansion and strong demand in the defense sector. However, this was offset by one-time financial expenses, cash flow challenges, and recruitment difficulties.Q2-2025 Updates
Positive Updates
Revenue Growth
Revenues for Q2 2025 totaled $12.5 million, representing a 20% increase compared to the same period last year. Revenues for the first half of 2025 reached $25.3 million, up from $22.2 million in the first half of 2024.
Gross Profit and Margin Expansion
Gross profit totaled $3 million, nearly double from the same quarter last year, with gross margin expanding to 24.1% from 15.6% in Q2 2024.
Operational Income Increase
Operational income rose to $1.5 million, up from $0.4 million in Q2 2024, indicating improved profitability.
Strong Defense Market Performance
The defense market accounted for approximately 65% of total revenues, supported by increased demand both domestically and internationally.
Infrastructure and Capacity Expansion
Key infrastructure initiatives include a new 40-meter coating line expected by the end of 2025 and a completed upgrade to the cooling system, providing 20% surplus capacity.
Negative Updates
One-time Financial Expenses
Recorded $1 million in one-time financial expenses due to a 9% devaluation of the U.S. dollar against the Israeli shekel.
Cash Flow Challenges
Cash flow used in operating activities amounted to $2.9 million in Q2 2025, primarily due to increased trade receivables and inventory.
Recruitment Challenges
Facing challenges in recruiting qualified manufacturing personnel, with efforts underway to address this through a government program.
Company Guidance
During the Eltek Ltd. 2025 Second Quarter Financial Results Conference Call, several key financial metrics were highlighted. The company reported a 20% increase in revenues to $12.5 million compared to the same period last year, with first-half revenues of $25.3 million, up from $22.2 million in 2024. Gross profit nearly doubled to $3 million, with a gross margin expansion to 24.1% from 15.6% in Q2 2024, attributed to improved operational efficiencies and a favorable product mix. Operating income rose to $1.5 million, a significant increase from $0.4 million in Q2 2024, while net income was $0.4 million or $0.05 per fully diluted share. EBITDA stood at $2 million, representing 15.6% of revenue. The company also recorded a onetime financial expense of $1 million due to a 9% devaluation of the U.S. dollar against the Israeli shekel. Eltek's cash, cash equivalents, and short-term bank deposits totaled $11.2 million as of June 30, 2025, with no outstanding debt. The company anticipates that incremental revenue will significantly impact profitability, potentially contributing approximately $0.50 on a dollar to their gross profit.Eltek Financial Statement Overview
Summary
Eltek demonstrates strong financial health with robust profitability and a well-managed balance sheet. Stable margins and low leverage are strengths, but the decline in revenue and negative Free Cash Flow indicate areas for improvement.Income Statement
Eltek shows a stable profitability with a Gross Profit Margin of 22.2% and a Net Profit Margin of 9.1% for 2024. However, there's a decline in revenue from the previous year by 0.4%, which indicates a need for revenue growth strategies. EBIT and EBITDA margins remain healthy, reflecting efficient operations despite the slight revenue dip.75
Positive
Balance Sheet
The company's financial structure is strong, with a Debt-to-Equity Ratio of 0.15, indicating low leverage. A solid Return on Equity of 10.3% signifies effective use of equity capital. Furthermore, the Equity Ratio stands at 68.5%, showing a high proportion of assets financed by equity, enhancing financial stability.80
Positive
Cash Flow
Eltek's cash flow situation is mixed, with negative Free Cash Flow indicating high capital expenditures. The Operating Cash Flow to Net Income Ratio of 1.07 suggests efficient cash generation from operations, but the Free Cash Flow to Net Income Ratio is negative, highlighting the impact of significant investments on cash reserves.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 49.56M | 46.53M | 46.70M | 39.65M | 33.82M | 36.71M |
| Gross Profit | 10.68M | 10.34M | 13.10M | 8.27M | 6.90M | 7.74M |
| EBITDA | 6.21M | 6.68M | 9.16M | 4.51M | 3.73M | 4.62M |
| Net Income | 3.10M | 4.22M | 6.35M | 3.19M | 5.04M | 2.61M |
Balance Sheet | ||||||
| Total Assets | 64.42M | 60.16M | 47.17M | 41.52M | 42.78M | 35.16M |
| Cash, Cash Equivalents and Short-Term Investments | 11.15M | 17.24M | 12.14M | 7.37M | 9.28M | 4.74M |
| Total Debt | 6.52M | 6.02M | 6.66M | 11.30M | 13.75M | 11.19M |
| Total Liabilities | 19.77M | 18.96M | 20.30M | 20.50M | 21.71M | 19.89M |
| Stockholders Equity | 44.65M | 41.19M | 26.87M | 21.02M | 21.07M | 15.27M |
Cash Flow | ||||||
| Free Cash Flow | -7.59M | -4.97M | 6.43M | 802.00K | 2.34M | 2.17M |
| Operating Cash Flow | -1.15M | 4.54M | 8.86M | 3.83M | 3.88M | 3.25M |
| Investing Cash Flow | -5.74M | -15.87M | -2.96M | -3.03M | -1.65M | -1.14M |
| Financing Cash Flow | -1.23M | 9.61M | -3.81M | -1.64M | 2.12M | 814.00K |
Eltek Technical Analysis
Positive
10.28
Price Trends
10.32
Negative
9.90
Positive
10.13
Positive
Market Momentum
-0.02
Negative
51.15
Neutral
63.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELTK, the sentiment is Positive. The current price of 10.28 is above the 20-day moving average (MA) of 10.22, below the 50-day MA of 10.32, and above the 200-day MA of 10.13, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 51.15 is Neutral, neither overbought nor oversold. The STOCH value of 63.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ELTK.
Eltek Risk Analysis
Eltek disclosed 49 risk factors in its most recent earnings report. Eltek reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Eltek Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $69.02M | 22.24 | 7.51% | 1.85% | 6.75% | -52.37% | |
67 Neutral | $80.65M | 51.48 | 12.53% | ― | 22.59% | ― | |
61 Neutral | $35.48B | 7.70 | -10.11% | 1.88% | 8.73% | -9.23% | |
56 Neutral | $53.47M | 37.53 | 8.17% | ― | -2.47% | -16.94% | |
51 Neutral | $26.19M | 6.41 | -9.26% | ― | -14.49% | -149.37% | |
51 Neutral | $90.95M | ― | -15.12% | ― | -7.12% | -11.00% | |
47 Neutral | $229.51M | ― | -24.86% | ― | 2.59% | -48.02% |
* Technology Sector Average
Performance Comparison
ELTK
Eltek
10.28
-0.08
-0.77%
LPTH
Lightpath Technologies
5.35
4.06
314.73%
MIND
MIND Technology
10.12
6.59
186.69%
NSYS
Nortech Systems
9.40
-2.43
-20.54%
LINK
Interlink Electronics
9.22
5.25
132.24%
SOTK
Sono-Tek
3.40
-0.74
-17.87%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.