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Frequency Electronics (FEIM)
NASDAQ:FEIM
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Frequency Electronics
(NASDAQ:FEIM)
Rating:76Outperform
Price Target:―
Frequency Electronics (FEIM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$212.11M
Dividend Yield4.41%
Average Volume (3M)273.53K
Price to Earnings (P/E)9.1
Beta (1Y)0.53
Revenue Growth24.10%
EPS Growth603.04%
CountryUS
Employees200
SectorTechnology
Sector Strength91
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.34
Shares Outstanding9,676,513
10 Day Avg. Volume353,308
30 Day Avg. Volume273,530
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)1.85
Price to Sales (P/S)0.00
P/FCF Ratio236.52
Enterprise Value/Market Cap0.36
Enterprise Value/Revenue0.32
Enterprise Value/Gross Profit2.63
Enterprise Value/Ebitda2.43
Forecast
1Y Price Target
$27.00Price Target Upside19.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Frequency Electronics Business Overview & Revenue Model
Company DescriptionFrequency Electronics, Inc. (FEIM) is a leading provider in the precision time and frequency generation technology sector. The company specializes in developing and manufacturing advanced timing, frequency control, and synchronization products for various markets, including space, defense, commercial communications, and other industrial applications. Their core products include precision oscillators, frequency synthesizers, and time and frequency systems that are critical for ensuring the accuracy and reliability of communications and data transfer systems.
How the Company Makes MoneyFrequency Electronics makes money primarily through the sale of its high-precision timing and frequency control products. The company's revenue model is based on manufacturing and supplying these specialized products to government and commercial entities that require precise time and frequency solutions, such as aerospace and defense contractors, telecommunication companies, and satellite operators. Key revenue streams include contracts with government agencies, such as the Department of Defense, as well as partnerships with major aerospace and defense firms. Additionally, Frequency Electronics generates income through research and development services, often funded by government grants or contracts, which further contribute to their earnings.
Frequency Electronics Earnings Call Summary
Earnings Call Date:Jul 10, 2025
(Q3-2025)
| % Change Since: 0.00%|
Next Earnings Date:Sep 11, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment with record-breaking revenue and significant net income growth, driven by strong performance in space programs. Despite some challenges such as a decline in non-space government revenue and a decrease in the backlog, the company's strategic positioning in high-growth markets like proliferated satellites and quantum sensing indicates a positive trajectory.Q3-2025 Updates
Positive Updates
Record Revenue Growth
Consolidated revenue for the nine months ended January 31, 2025, was $49.8 million, a significant increase from $39.7 million for the same period of the prior fiscal year. This marks the highest revenue quarter for the company in 10 years.
Increase in Operating Income
Operating income for the nine months ending January 31, 2025, was $8.5 million compared to $2.5 million in the prior year, driven by the completion of major milestones in a large space program.
Strong Net Income Growth
Consolidated net income for the nine months ending January 31, 2025, was $20.5 million or $2.18 per share compared to $3 million or $0.32 per share in the previous fiscal year.
Significant Tax Benefit
The company recorded an income tax benefit of $11.6 million for the nine months ending January 31, 2025, including a discrete tax benefit of $11.9 million.
Growing Strategic Importance
The company has increased its strategic importance in larger addressable markets such as proliferated satellites and quantum sensing, which is expected to drive future revenue and profitability.
Negative Updates
Decline in Non-Space Government Revenue
Revenues from non-space U.S. government and DoD customers decreased to $19.5 million from $21.1 million in the same period of the prior fiscal year.
Decrease in Fully-Funded Backlog
The fully-funded backlog at the end of January 2025 was approximately $73 million, down from approximately $78 million at the previous fiscal year end.
Cash Position Decrease
Cash decreased by approximately $12.8 million since year-end, with the dividend paid in Q2 accounting for approximately $9.6 million of this decrease.
Company Guidance
During the Frequency Electronics' Third Quarter Fiscal 2025 Earnings Release Conference Call, CEO Thomas McClelland highlighted significant growth in revenue, gross margin, and operating income for the quarter and year-to-date, marking the highest revenue quarter for the company in a decade. Revenue from commercial and U.S. government satellite programs rose to $28.8 million, accounting for 58% of consolidated revenue, while non-space U.S. government and DoD customer revenue decreased to $19.5 million, representing 39% of consolidated revenue. R&D expenses increased to $4.5 million, reflecting a focus on product modernization. Operating income improved to $8.5 million, up from $2.5 million in the previous year, driven by successful completion of large space programs. The company reported a consolidated net income of $20.5 million or $2.18 per share, and a strong balance sheet with a working capital of $27 million and a current ratio of 2.2:1. The fully-funded backlog stood at $73 million. CFO Steve Bernstein noted a decrease in contract liabilities by $7.4 million quarter-over-quarter, while emphasizing the company's debt-free status and adequate liquidity to meet future operational needs.Frequency Electronics Financial Statement Overview
Summary
Frequency Electronics demonstrates strong financial health with impressive revenue and profit growth. The balance sheet indicates low leverage and a solid equity base, contributing to financial stability. While cash flow metrics show positive growth, there is room to improve cash conversion efficiency. The company is well-positioned in the Hardware & Equipment industry, with a promising trajectory.Income Statement
Frequency Electronics has shown a strong performance in the TTM, with a significant increase in total revenue by 18.32% compared to the previous year. The gross profit margin improved to 44.15%, and the net profit margin rose substantially to 35.34%, indicating enhanced profitability. The EBIT and EBITDA margins also showed impressive growth, demonstrating effective cost management and operational efficiency.85
Very Positive
Balance Sheet
The company's balance sheet is stable, with a favorable debt-to-equity ratio of 0.10, reflecting low leverage and a strong equity position. The equity ratio of 59.98% suggests a solid financial foundation. However, the return on equity (ROE) is quite high at 44.59%, driven by the substantial net income in the TTM, which may not be sustainable.72
Positive
Cash Flow
Frequency Electronics exhibits robust cash flow dynamics, with a free cash flow growth rate of 25.26%, indicating efficient cash management. The operating cash flow to net income ratio of 0.27 is moderate, suggesting a need for improved conversion of earnings into cash. The free cash flow to net income ratio of 0.23 further highlights this area for potential enhancement.78
Positive
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 65.40M | 55.27M | 40.78M | 48.30M | 54.25M | 41.51M |
| Gross Profit | 28.88M | 18.58M | 7.85M | 8.60M | 16.92M | 5.79M |
| EBITDA | 11.52M | 7.70M | -2.88M | -5.58M | 3.62M | -8.13M |
| Net Income | 23.11M | 5.59M | -5.50M | -8.66M | 680.00K | -9.99M |
Balance Sheet | ||||||
| Total Assets | 86.43M | 83.25M | 74.50M | 85.88M | 86.02M | 91.31M |
| Cash, Cash Equivalents and Short-Term Investments | 5.52M | 18.32M | 12.05M | 21.52M | 20.12M | 14.38M |
| Total Debt | 5.00M | 6.18M | 7.64M | 9.10M | 10.08M | 11.31M |
| Total Liabilities | 34.59M | 43.44M | 41.61M | 39.19M | 30.61M | 37.04M |
| Stockholders Equity | 51.84M | 39.82M | 32.89M | 46.69M | 55.41M | 54.27M |
Cash Flow | ||||||
| Free Cash Flow | 5.06M | 7.22M | 257.00K | 2.18M | 10.92M | -2.89M |
| Operating Cash Flow | 6.21M | 8.71M | 1.18M | 4.04M | 12.16M | -1.41M |
| Investing Cash Flow | -2.00M | -1.49M | 8.67M | -2.28M | -1.19M | -3.43M |
| Financing Cash Flow | -9.94M | 0.00 | -9.35M | 0.00 | -4.96M | 4.96M |
Frequency Electronics Technical Analysis
Positive
22.67
Price Trends
19.64
Positive
17.85
Positive
16.36
Positive
Market Momentum
0.78
Positive
59.34
Neutral
50.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FEIM, the sentiment is Positive. The current price of 22.67 is above the 20-day moving average (MA) of 21.44, above the 50-day MA of 19.64, and above the 200-day MA of 16.36, indicating a bullish trend. The MACD of 0.78 indicates Positive momentum. The RSI at 59.34 is Neutral, neither overbought nor oversold. The STOCH value of 50.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FEIM.
Frequency Electronics Risk Analysis
Frequency Electronics disclosed 18 risk factors in its most recent earnings report. Frequency Electronics 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
Frequency Electronics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $168.99M | 16.44 | 36.41% | ― | 5.18% | ― | |
76 Outperform | $212.11M | 9.11 | 49.82% | 4.41% | 24.10% | 603.04% | |
73 Outperform | $314.94M | ― | -1.32% | ― | 12.39% | -123.62% | |
71 Outperform | $229.20M | 10.21 | 15.02% | ― | 11.94% | 377.86% | |
63 Neutral | $34.16B | 5.78 | -11.85% | 1.82% | 5.31% | -18.32% | |
54 Neutral | $123.21M | 23.83 | 111.75% | ― | 1.60% | ― | |
42 Neutral | $256.48M | ― | 50.55% | ― | 130.79% | -392.49% |
* Technology Sector Average
Performance Comparison
FEIM
Frequency Electronics
22.67
14.45
175.79%
AVNW
Aviat Networks
24.20
-4.33
-15.18%
CRNT
Ceragon Networks
2.51
-0.11
-4.20%
BKTI
BK Technologies
42.81
29.35
218.05%
INSG
Inseego
8.05
-3.53
-30.48%
SATX
SatixFy Communications
2.96
2.29
341.79%
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.