Nortech Systems (NSYS) AI Stock Analysis

• Market Cap: $24.16M
• Dividend Yield: N/A
• Average Volume (3M): 8.51K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.36
• Revenue Growth: -8.04%
• EPS Growth: -118.60%
• Country: US
• Employees: 701
• Sector: Healthcare
• Sector Strength: 57
• Industry: Hardware, Equipment & Parts
• EPS (TTM): -0.49
• Shares Outstanding: 2,760,993
• 10 Day Avg. Volume: 3,983
• 30 Day Avg. Volume: 8,507
• PEG Ratio: 0.06
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.89
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.98
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Nortech Systems is currently facing significant financial and operational challenges, reflected in declining revenue, profitability, and negative cash flows. The technical indicators are bearish, and the valuation metrics suggest low investor confidence. The earnings call outlined strategic efforts to improve long-term growth, but immediate pressures remain. The company's focus on cost management and innovation is promising, but the current financial state is a key concern.

Nortech Systems Business Overview & Revenue Model

Company Description

Nortech Systems Incorporated provides design and manufacturing solutions for electromedical devices, electromechanical systems, assemblies, and components in the United States, Mexico, and China. It offers a range of technical and manufacturing, and support services, including project management, designing, testing, prototyping, manufacturing, supply chain management, and post-market services. The company also provides manufacturing and engineering services for medical devices, printed circuit board assemblies, wire and cable assemblies, and higher-level electromechanical assemblies. In addition, it offers engineering and repair services. The company serves original equipment manufacturers in the aerospace and defense, medical, and industrial markets through business development teams and independent manufacturers' representatives. Nortech Systems Incorporated was founded in 1990 and is headquartered in Maple Grove, Minnesota.

How the Company Makes Money

Nortech Systems generates revenue primarily through its electronic manufacturing services, which involve designing, developing, and manufacturing complex electronic products and systems for its clients. The company operates on a contract manufacturing model, where it partners with original equipment manufacturers (OEMs) to produce customized electronic solutions that meet specific client needs. Key revenue streams include sales from its custom interconnect solutions, printed circuit board assemblies, and full system assemblies. Additionally, Nortech Systems benefits from long-term contracts and strategic partnerships with major players in the medical, aerospace, defense, and industrial sectors, which contribute to stable and recurring revenue. The company's ability to deliver high-quality, tailored solutions helps maintain strong relationships with its clients and drives its financial performance.

Nortech Systems Financial Statement Overview

Summary

Nortech Systems shows moderate financial health with stable profitability and a solid balance sheet. While it effectively manages leverage, challenges in revenue generation and cash flow conversion limit its financial performance. Improvements in cash flow operations are needed to support growth.

Income Statement

The company's income statement shows a stable gross profit margin of 15.3% in TTM, with a net profit margin of 3.3%, indicating moderate profitability. However, the revenue growth has been negative at -2.7% in the TTM, reflecting some challenges in revenue generation. The EBIT and EBITDA margins are also moderate at 2.8% and 4.2%, respectively, suggesting some room for improvement in operational efficiency.

Balance Sheet

Nortech Systems maintains a healthy equity ratio of 46.4% in the TTM, indicating a strong balance sheet position. The debt-to-equity ratio of 0.53 suggests manageable leverage, and a reasonable return on equity of 12.7% highlights effective use of equity capital. The company's capital structure appears stable with a focus on equity financing.

Cash Flow

Cash flow analysis reveals challenges with negative free cash flow in the TTM, impacting liquidity. The operating cash flow to net income ratio is negative, pointing to difficulties in converting income into cash. However, historical free cash flow trends show potential for improvement, and financing activities have provided additional liquidity support.

Breakdown
Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
139.33M	134.12M	115.17M	104.11M	116.33M
	Gross Profit
23.10M	20.48M	15.86M	8.46M	12.58M
	EBIT
5.95M	1.96M	2.27M	-2.06M	-2.00M
	EBITDA
8.00M	3.87M	4.97M	1.58M	2.44M
	Net Income Common Stockholders
6.87M	2.01M	7.15M	-1.55M	-1.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
960.00K	1.03M	643.00K	352.00K	351.00K
	Total Assets
75.13M	69.54M	67.09M	57.63M	61.41M
	Total Debt
14.18M	18.06M	20.21M	21.79M	20.62M
	Net Debt
13.22M	17.03M	19.57M	21.43M	20.27M
	Total Liabilities
39.78M	41.46M	40.98M	38.92M	41.43M
	Stockholders Equity
35.34M	28.08M	26.11M	18.72M	19.98M
Cash Flow		Free Cash Flow
485.00K	2.96M	-5.90M	844.00K	239.00K
	Operating Cash Flow
1.77M	5.40M	-4.54M	1.36M	997.00K
	Investing Cash Flow
-1.28M	-2.43M	-730.00K	5.50M	-758.00K
	Financing Cash Flow
-1.28M	-2.67M	3.93M	-3.96M	-525.00K

Nortech Systems Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSYS, the sentiment is Neutral. The current price of 8.75 is above the 20-day moving average (MA) of 8.26, below the 50-day MA of 9.23, and below the 200-day MA of 11.01, indicating a neutral trend. The MACD of -0.13 indicates Negative momentum. The RSI at 50.77 is Neutral, neither overbought nor oversold. The STOCH value of 54.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NSYS.

Nortech Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LGL	64 Neutral	$37.40M	87.66	1.11%	―	28.82%	60.24%
CPSH	61 Neutral	$23.24M	―	-18.07%	―	-13.83%	-476.23%
SGMA	57 Neutral	$9.00M	―	-19.30%	―	-22.27%	-1171.98%
Sector *	52 Neutral	$5.35B	3.96	-42.60%	2.86%	17.58%	1.27%
NSYS	45 Neutral	$24.16M	6.41	-3.73%	―	-8.04%	-118.60%
REFR	33 Underperform	$37.70M	―	-42.84%	―	46.83%	31.40%