Frequency Electronics (FEIM) AI Stock Analysis

• Market Cap: $201.46M
• Dividend Yield: 4.8%
• Average Volume (3M): 264.23K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.53
• Revenue Growth: 24.10%
• EPS Growth: 603.04%
• Country: US
• Employees: 200
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 1.60
• Shares Outstanding: 9,676,513
• 10 Day Avg. Volume: 363,141
• 30 Day Avg. Volume: 264,228
• PEG Ratio: 0.30
• Price to Book (P/B): 1.85
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 236.52
• Enterprise Value/Market Cap: 0.38
• Enterprise Value/Revenue: 0.32
• Enterprise Value/Gross Profit: 2.63
• Enterprise Value/Ebitda: 2.43
• 1Y Price Target: $27.00
• Price Target Upside: 23.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 76 Outperform
• Price Target: ―

Frequency Electronics has demonstrated strong financial performance with significant growth in revenue and profitability, supported by a stable balance sheet and attractive valuation. The positive earnings call sentiment further bolsters its outlook. However, the limited technical indicators and some challenges, such as a decrease in non-space government revenue, slightly temper the overall score.

Frequency Electronics Business Overview & Revenue Model

Company Description

Frequency Electronics, Inc., together with its subsidiaries, designs, develops, manufactures, and sells precision time and frequency control products and components for microwave integrated circuit applications. It operates through two segments, FEI-NY and FEI-Zyfer. The FEI-NY segment offers precision time, frequency generation, and synchronization products and subsystems used in communication satellites, terrestrial cellular telephone, or other ground-based telecommunication stations; and other components and systems for the United States military. The FEI-Zyfer segment designs, develops, and manufactures products for precision navigation and timing primarily incorporating global positioning system technologies into radar systems, airborne SIGINT/COMINT platforms, information networks, test equipment, military command and control terminals, and satellite ground stations. The company's products are used in commercial, government satellites, secure communications, command, control, communication, computer, intelligence, security and reconnaissance, and electronic warfare applications for the United States government on land, sea, and air-borne platforms. It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia. Frequency Electronics, Inc. was founded in 1961 and is headquartered in Mitchel Field, New York.

How the Company Makes Money

Frequency 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 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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 21.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 21.92 is above the 20-day moving average (MA) of 21.03, above the 50-day MA of 19.48, and above the 200-day MA of 16.25, indicating a bullish trend. The MACD of 0.71 indicates Positive momentum. The RSI at 56.28 is Neutral, neither overbought nor oversold. The STOCH value of 25.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FEIM.

Frequency Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BKTI	77 Outperform	$174.61M	18.48	36.41%	―	5.18%	―
FEIM	76 Outperform	$201.46M	8.65	52.23%	4.80%	24.10%	603.04%
AVNW	73 Outperform	$309.72M	―	-1.32%	―	12.39%	-123.62%
CRNT	71 Outperform	$226.54M	9.94	15.02%	―	11.94%	377.86%
Sector *	63 Neutral	$33.76B	6.14	-11.84%	1.84%	5.29%	-18.23%
INSG	56 Neutral	$123.96M	24.42	111.75%	―	1.60%	―
SATX	42 Neutral	$256.48M	―	50.55%	―	130.79%	-392.49%