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Frequency Electronics (FEIM)
:FEIM
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Frequency Electronics (FEIM) AI Stock Analysis

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FEIM

Frequency Electronics

(NASDAQ:FEIM)

Rating:76Outperform
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 (FEIM) vs. SPDR S&P 500 ETF (SPY)

Frequency Electronics Business Overview & Revenue Model

Company DescriptionFrequency 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 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: 20.69%|
Next Earnings Date:Sep 11, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with record revenue and significant financial growth metrics. However, there are challenges such as decreased revenue from non-space government contracts, a reduction in backlog, and increased expenses. Despite these lowlights, the positive financial achievements and strategic direction indicate a promising outlook.
Q3-2025 Updates
Positive Updates
Record Revenue Quarter
This was the highest revenue quarter for Frequency Electronics in 10 years, driven by progress on specific programs and conversion of a historically high backlog into revenue.
Substantial Year-over-Year Revenue Growth
For the nine months ended January 31, 2025, consolidated revenue was $49.8 million, a 25.4% increase from $39.7 million in the prior fiscal year.
Gross Margin Improvement
Gross margin and rate increased compared to the same period in fiscal year 2024, driven by successful completion of major milestones in large space programs.
Significant Operating Income Increase
Operating income for the nine months ended January 2025 was $8.5 million, up from $2.5 million in the prior year.
Strong Net Income Growth
Net income for the nine months ended January 31, 2025 was $20.5 million, compared to $3 million in the previous fiscal year.
Debt-Free and Strong Liquidity
The company remains debt-free with adequate liquidity to meet its needs for the next 12 months.
Negative Updates
Decrease in Non-Space U.S. Government Revenue
Revenue from non-space U.S. government and DoD customers decreased from $21.1 million to $19.5 million, reflecting a decline in this segment's contribution to total revenue.
Reduction in Backlog
The fully-funded backlog decreased to $73 million from $78 million at the previous fiscal year end.
Cash Decrease
Cash decreased by $12.8 million since year-end, with a $9.6 million dividend payment accounting for a significant portion of the decrease.
Increased SG&A and R&D Expenses
SG&A expenses increased primarily due to payroll-related expenses and costs from the Quantum Summit. R&D expense rose to $4.5 million from $2.3 million, reflecting a focus on product advancement.
Company Guidance
During the Frequency Electronics' third quarter fiscal 2025 earnings call, the company reported significant financial improvements with consolidated revenue reaching $49.8 million for the nine months ending January 31, 2025, up from $39.7 million in the prior year. Revenue from commercial and U.S. government satellite programs rose to approximately $28.8 million, accounting for 58% of total revenue, compared to 41% in the previous period. Operating income surged to $8.5 million, up from $2.5 million, driven by successful completion of major space program milestones. The company also recorded a substantial income tax benefit of $11.6 million, contributing to a net income of $20.5 million or $2.18 per share, compared to $3 million or $0.32 per share in the prior year. With a strong balance sheet, a working capital of $27 million, and a current ratio of 2.2 to 1, Frequency Electronics is well-positioned to meet future financial needs despite a decrease in cash by $12.8 million since year-end. The company forecasts continued revenue growth, supported by a robust backlog of $73 million and strategic investments in R&D, particularly in quantum sensing and satellite technologies.

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
85
Very Positive
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
72
Positive
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
78
Positive
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.
BreakdownDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue69.81M55.27M40.78M48.30M54.25M
Gross Profit30.10M18.58M7.85M8.60M16.92M
EBITDA11.73M7.70M-2.88M-5.58M3.62M
Net Income23.80M5.59M-5.50M-8.66M680.00K
Balance Sheet
Total Assets93.74M83.25M74.50M85.88M86.02M
Cash, Cash Equivalents and Short-Term Investments4.72M18.32M12.05M21.52M20.12M
Total Debt8.76M6.18M7.64M9.10M10.08M
Total Liabilities38.12M43.44M41.61M39.19M30.61M
Stockholders Equity55.62M39.82M32.89M46.69M55.41M
Cash Flow
Free Cash Flow-3.24M7.22M257.00K2.18M10.92M
Operating Cash Flow-1.43M8.71M1.18M4.04M12.16M
Investing Cash Flow-1.81M-1.49M8.67M-2.28M-1.19M
Financing Cash Flow-9.94M0.00-9.35M0.00-4.96M

Frequency Electronics Technical Analysis

Technical Analysis Sentiment
Positive
Last Price27.36
Price Trends
50DMA
24.56
Positive
100DMA
21.18
Positive
200DMA
18.53
Positive
Market Momentum
MACD
1.16
Positive
RSI
57.00
Neutral
STOCH
31.32
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 27.36 is below the 20-day moving average (MA) of 28.42, above the 50-day MA of 24.56, and above the 200-day MA of 18.53, indicating a bullish trend. The MACD of 1.16 indicates Positive momentum. The RSI at 57.00 is Neutral, neither overbought nor oversold. The STOCH value of 31.32 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 17 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$252.55M21.0139.51%4.63%328.61%
76
Outperform
$266.16M11.1149.88%3.71%26.30%317.51%
63
Neutral
$167.02M12.278.61%5.06%29.66%
61
Neutral
$34.98B7.37-10.82%1.91%8.82%-8.66%
55
Neutral
$147.87M29.71111.75%-10.99%
54
Neutral
$278.90M-1.32%12.39%-123.62%
42
Neutral
130.79%-392.49%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FEIM
Frequency Electronics
27.36
13.68
100.00%
AVNW
Aviat Networks
23.19
-4.53
-16.34%
CRNT
Ceragon Networks
1.99
-1.09
-35.39%
BKTI
BK Technologies
72.89
50.97
232.53%
INSG
Inseego
11.04
-1.98
-15.21%
SATX
SatixFy Communications
2.96
2.30
348.48%
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: Apr 10, 2025