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Frequency Electronics
(NASDAQ:FEIM)
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Rating:61Neutral
Price Target:
$80.00
▲(36.29% Upside)
Action:Reiterated
Date:05/30/26
FEIM scores as moderately attractive: a strong balance sheet and improving profitability are offset by weak recent cash flow (the largest fundamental risk). Technically, the trend is strong but appears overbought, and valuation is stretched with a very high P/E. The latest earnings call adds support via record backlog and sizable new contract wins, though near-term margins and revenue timing remain key watch items.
Positive Factors
Record backlog and contract wins
A record funded backlog (~$83M) plus two new ~$45M contracts materially increases multi-quarter revenue visibility. This provides durable program-level tailwinds, supports phased production planning, and underpins potential scale-driven margin recovery as awards convert to revenue.
Negative Factors
Weak operating cash generation
Negative operating and free cash flow over the last twelve months undermines earnings quality and heightens execution risk. Persistent cash deficits could force reliance on collections or external funding, complicating delivery of backlog and funding of R&D over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog and contract wins
A record funded backlog (~$83M) plus two new ~$45M contracts materially increases multi-quarter revenue visibility. This provides durable program-level tailwinds, supports phased production planning, and underpins potential scale-driven margin recovery as awards convert to revenue.
Read all positive factors
Frequency Electronics Key Performance Indicators (KPIs)
Any
Revenue By Segment
Breaks down earnings from different business units or product lines, highlighting which areas are driving growth and which may need strategic adjustments. Offers insight into the company's diversification and market focus.
Breaks down earnings from different business units or product lines, highlighting which areas are driving growth and which may need strategic adjustments. Offers insight into the company's diversification and market focus.
Data provided by:
The Fly
The FlyFrequency Electronics (FEIM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$653.01M
Dividend YieldN/A
Average Volume (3M)172.98K
Price to Earnings (P/E)89.1
Beta (1Y)1.13
Revenue Growth3.69%
EPS Growth-68.76%
CountryUS
Employees200
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.75
Shares Outstanding9,841,927
10 Day Avg. Volume174,037
30 Day Avg. Volume172,980
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)3.21
Price to Sales (P/S)2.56
P/FCF Ratio-55.23
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue10.31
Enterprise Value/Gross Profit27.16
Enterprise Value/Ebitda78.69
Forecast
1Y Price Target
$75.00Price Target Upside27.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.14
Revenue Forecast (FY)$80.93M
Frequency Electronics Business Overview & Revenue Model
Company Description
Frequency Electronics, Inc. (FEIM) is a firm dedicated to the design, development, production, and sale of highly precise timing and frequency control products and their associated components. These specialized items are primarily intended for mic...
How the Company Makes Money
Frequency Electronics makes money primarily by selling precision timing and frequency control hardware and related services to customers in the U.S. government/defense ecosystem and commercial aerospace/space markets.
Key revenue streams include:...
Frequency Electronics Earnings Call Summary
Earnings Call Date:Mar 11, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jul 09, 2026
Earnings Call Sentiment Positive
The call presented a mix of strong strategic and financial positives—notably two significant contract awards (~$45M), a record $83M backlog (up ~18.6% YoY), substantial growth in DoD revenue (+68.9%), solid liquidity (working capital ~$32M, debt free), and clear progress toward new markets (proliferated satellites, Alt PNT, quantum sensing). Near-term operating results were impacted by revenue timing shifts, mix-related margin pressure, higher operating expenses (including ~ $500K nonrecurring investment), and a large YoY drop in net income largely due to prior-year discrete tax benefits. Overall, management communicated confidence in pipeline expansion, backlog progression toward $100M, and long-term margin improvement as production scales.Positive Updates
Two New Contracts Announced (~$45M)
Announced two contracts valued at approximately $45 million (one traditional satellite program and one proliferated-satellite program). Management stated both are significant, will enter backlog in the current fiscal fourth quarter, and reflect wins in both traditional and next-generation markets.
Negative Updates
Year-over-Year Revenue Decline
Consolidated revenue declined to $16.9M from $18.9M in the same period last year, a decrease of $2.0M (-10.6%). Management cited prior-year expedited satellite program execution and timing shifts of new bookings as drivers.
Read all updates
Q3-2026 Updates
Positive
Negative
Two New Contracts Announced (~$45M)
Announced two contracts valued at approximately $45 million (one traditional satellite program and one proliferated-satellite program). Management stated both are significant, will enter backlog in the current fiscal fourth quarter, and reflect wins in both traditional and next-generation markets.
Read all positive updates
Company Guidance
Management gave directional guidance rather than formal targets: Q3 revenue was $16.9M (flat sequential, down from $18.9M YoY), with satellite revenue ~$4.2M (25%) and non-space U.S. government/DoD revenue ~$12.5M (74%); gross margin and gross‑margin rate declined year‑over‑year but are expected to move up over time as higher‑rate unit production and follow‑on business scale; SG&A ran ~21% of revenue (vs 18%), R&D was ~$1.8M (10%), operating income ~$1.3M, pretax ~$1.4M and net income ~$1.6M ($0.16/sh) versus $15.4M ($1.60/sh) prior. Fully funded backlog hit a record ~$83M (vs ~$70M at 4/30/25) and two new contracts (~$45M) will start entering Q4 backlog — management expects backlog “north of $100M” in the near term and indicated additional awards this calendar year. Balance sheet/ cash items: working capital ~$32M, current ratio ~2.6:1, debt‑free, >$11M collected since 2/1/26; about $500k of nonrecurring operating expenses contributed to a ~$540k increase in operating expenses, and management expects operating leverage going forward. They also reiterated continued R&D investment, optimism for Turbo (material near‑term growth, multi‑quarter/years upside, previously framed up to ~$20M), and that proliferated‑satellite programs may have lower initial margins but strong long‑term margins.Frequency Electronics Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
78
Positive
Cash Flow
32
Negative
| Breakdown | TTM | Apr 2025 | Apr 2024 | Apr 2023 | Apr 2022 | Apr 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 67.81M | 69.81M | 55.27M | 40.78M | 48.30M | 54.25M |
| Gross Profit | 25.74M | 30.10M | 18.58M | 7.85M | 8.60M | 16.92M |
| EBITDA | 8.88M | 14.30M | 7.70M | -2.88M | -5.58M | 3.62M |
| Net Income | 7.20M | 23.80M | 5.59M | -5.50M | -8.66M | 680.00K |
Balance Sheet | ||||||
| Total Assets | 94.19M | 93.74M | 98.47M | 90.78M | 84.76M | 98.53M |
| Cash, Cash Equivalents and Short-Term Investments | 86.00K | 4.72M | 18.32M | 12.05M | 21.52M | 20.12M |
| Total Debt | 8.13M | 8.76M | 6.18M | 7.64M | 9.10M | 9.07M |
| Total Liabilities | 33.95M | 38.12M | 58.66M | 57.89M | 38.07M | 43.12M |
| Stockholders Equity | 60.24M | 55.62M | 39.82M | 32.89M | 46.69M | 55.41M |
Cash Flow | ||||||
| Free Cash Flow | -4.67M | -3.24M | 7.22M | 257.00K | 2.18M | 10.92M |
| Operating Cash Flow | -934.00K | -1.43M | 8.71M | 1.18M | 4.04M | 12.16M |
| Investing Cash Flow | -2.88M | -1.81M | -1.49M | 8.67M | -2.28M | -1.19M |
| Financing Cash Flow | -1.57M | -9.94M | 0.00 | -9.35M | 0.00 | -4.96M |
Frequency Electronics Technical Analysis
Positive
58.70
Price Trends
63.20
Positive
56.57
Positive
48.36
Positive
Market Momentum
-0.01
Positive
49.25
Neutral
21.80
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 58.7 is below the 20-day moving average (MA) of 69.24, below the 50-day MA of 63.20, and above the 200-day MA of 48.36, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 49.25 is Neutral, neither overbought nor oversold. The STOCH value of 21.80 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $321.93M | 22.48 | 33.31% | ― | 14.16% | 38.26% | |
67 Neutral | $185.10M | 185.13 | 4.67% | ― | 13.61% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $653.01M | 89.09 | 12.49% | ― | 3.69% | -68.76% | |
61 Neutral | $176.36M | -23.08 | -17.50% | ― | 149.18% | 54.90% | |
54 Neutral | $62.92M | -0.96 | -9999.00% | ― | -8.31% | 77.99% | |
53 Neutral | $193.22M | -36.78 | -3.82% | ― | 7.22% | 46.78% |
* Technology Sector Average
FEIM
Frequency Electronics
66.35
45.22
214.08%
CMTL
Comtech Telecommunications
2.10
-0.51
-19.54%
KVHI
KVH Industries
9.91
4.50
83.18%
OCC
Optical Cable
20.97
17.55
513.16%
BKTI
BK Technologies
85.98
37.49
77.31%
AMPG
AmpliTech Group
6.96
4.82
225.23%
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.