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Eltek (ELTK)
:ELTK
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Eltek (ELTK) AI Stock Analysis

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Eltek

(NASDAQ:ELTK)

Rating:70Outperform
Price Target:
$11.00
▲(4.76%Upside)
Eltek's overall stock score reflects a well-managed balance sheet and stable profitability, tempered by revenue challenges and negative Free Cash Flow. The stock is fairly valued with neutral technical indicators. While future growth prospects are promising, current operational issues must be resolved to realize potential gains.

Eltek (ELTK) vs. SPDR S&P 500 ETF (SPY)

Eltek Business Overview & Revenue Model

Company DescriptionEltek Ltd. (ELTK) is a leading global manufacturer of high-performance printed circuit boards (PCBs), serving a wide range of industries including defense, medical, aerospace, and telecommunications. The company specializes in the design and production of complex and technologically advanced PCBs, offering solutions that meet rigorous quality and reliability standards.
How the Company Makes MoneyEltek generates revenue primarily through the design, manufacture, and sale of advanced printed circuit boards (PCBs). The company's key revenue streams include custom-designed PCBs for defense, aerospace, medical, and telecommunications applications. Eltek's expertise in producing high-reliability and high-performance PCBs allows it to secure contracts with major industry players, contributing significantly to its earnings. Additionally, strategic partnerships and long-term contracts with clients in critical sectors provide a stable revenue base. The company also invests in research and development to innovate and enhance its product offerings, which helps maintain its competitive edge and attract new customers.

Eltek Earnings Call Summary

Earnings Call Date:May 20, 2025
(Q1-2025)
|
% Change Since: 5.74%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there are strong indicators of future growth through capacity expansions and increased demand, the current quarter faced significant profitability challenges due to higher costs and equipment optimization issues.
Q1-2025 Updates
Positive Updates
Increased Revenue
Revenues for Q1 2025 totaled $12.8 million compared to $11.8 million in Q1 2024, indicating an increase in demand for Eltek's products.
Financial Income Growth
Financial income increased to $0.5 million in Q1 2025 due to the devaluation of the Israeli Shekel against the U.S. dollar and interest earned on interest-bearing accounts.
Strong Product Demand
Continued strong demand for Eltek's products across all segments, expecting no material impact from U.S. tariffs in the near- to medium-term.
Future Capacity Expansion
Plans to complete the installation of new plating lines by mid-2026, which will significantly increase production capacity and profitability.
Negative Updates
Decrease in Gross Profit
Gross profit decreased to $2.2 million in Q1 2025 from $3.3 million in Q1 2024, primarily due to higher labor costs and lower yields during the quarter.
Operating Profit Decline
Operating profit fell to $0.7 million in Q1 2025 compared to $1.7 million in Q1 2024.
Challenges with New Equipment
Faced challenges in optimizing new equipment performance, affecting production yield and profitability due to unavailable technical support personnel.
Delayed Equipment Delivery
A 2-month delay in the delivery of a significant coating line from a European supplier.
Net Income Drop
Net income decreased to $1 million or $0.15 per share in Q1 2025 from $1.7 million or $0.27 per share in Q1 2024.
Company Guidance
During the Eltek Ltd 2025 First Quarter Financial Results Conference Call, the company provided guidance that highlighted several key metrics and operational updates. Revenues for Q1 2025 were reported at $12.8 million, a year-over-year increase from $11.8 million in Q1 2024. However, gross profit decreased to $2.2 million from $3.3 million in the same period last year, primarily due to higher labor costs and lower yields associated with the ramp-up of new production equipment. Operating profit was $0.7 million, down from $1.7 million in Q1 2024, while net income was reported at $1 million or $0.15 per share, compared to $1.7 million or $0.27 per share in the previous year. EBITDA also saw a decline to $1.2 million from $2.1 million year-over-year. The company faced challenges due to delays in equipment delivery and operational disruptions but remained optimistic about future profitability as new plating lines were expected to significantly enhance production capacity by mid-2026. Eltek also noted ongoing strong demand for its products, which is causing increased lead times for customer deliveries and emphasized its strategic efforts to diversify its supply base and improve operational efficiency through a comprehensive IT system overhaul.

Eltek Financial Statement Overview

Summary
Eltek maintains strong financial health with robust profitability indicated by stable margins and low leverage. However, the decline in revenue and negative Free Cash Flow due to high capital expenditures are concerns that need addressing to ensure future growth.
Income Statement
75
Positive
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.
Balance Sheet
80
Positive
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.
Cash Flow
65
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue46.53M46.70M39.65M33.82M36.71M
Gross Profit10.34M13.10M8.27M6.90M7.74M
EBITDA6.68M9.16M4.51M3.73M4.62M
Net Income4.22M6.35M3.19M5.04M2.61M
Balance Sheet
Total Assets60.16M47.17M41.52M42.78M35.16M
Cash, Cash Equivalents and Short-Term Investments17.24M12.14M7.37M9.28M4.74M
Total Debt6.02M6.66M11.30M13.75M11.19M
Total Liabilities18.96M20.30M20.50M21.71M19.89M
Stockholders Equity41.19M26.87M21.02M21.07M15.27M
Cash Flow
Free Cash Flow-4.97M6.43M802.00K2.34M2.17M
Operating Cash Flow4.54M8.86M3.83M3.88M3.25M
Investing Cash Flow-15.87M-2.96M-3.03M-1.65M-1.14M
Financing Cash Flow9.61M-3.81M-1.64M2.12M814.00K

Eltek Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price10.50
Price Trends
50DMA
10.26
Negative
100DMA
9.59
Positive
200DMA
10.15
Positive
Market Momentum
MACD
0.06
Positive
RSI
48.05
Neutral
STOCH
31.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELTK, the sentiment is Neutral. The current price of 10.5 is above the 20-day moving average (MA) of 10.38, above the 50-day MA of 10.26, and above the 200-day MA of 10.15, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 48.05 is Neutral, neither overbought nor oversold. The STOCH value of 31.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
$70.50M20.358.80%1.81%1.05%-51.90%
67
Neutral
$56.98M37.3312.53%22.59%
63
Neutral
$34.16B5.47-11.67%1.85%5.30%-18.30%
59
Neutral
$73.98M-18.75%-18.62%-112.68%
57
Neutral
$141.14M-24.86%2.59%-48.02%
56
Neutral
$56.78M40.688.17%8.40%-18.22%
48
Neutral
$24.43M6.41-9.81%-12.87%-148.14%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ELTK
Eltek
10.18
0.00
0.00%
LPTH
Lightpath Technologies
3.53
2.24
173.64%
MIND
MIND Technology
7.34
2.72
58.87%
NSYS
Nortech Systems
8.95
-5.18
-36.66%
LINK
Interlink Electronics
7.76
3.49
81.73%
SOTK
Sono-Tek
3.56
-0.63
-15.04%
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.Date of analysis: Jun 13, 2025