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Nortech Systems
(NASDAQ:NSYS)
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Rating:61Neutral
Price Target:
$15.50
▲(108.61% Upside)
Action:Reiterated
Date:06/02/26
The score is driven by improving financial performance (return to profitability, better cash flow, and lower debt) and strong technical momentum. These positives are tempered by a high valuation (P/E ~47.8), thin margins and recent operating volatility, plus credit-related risks highlighted by the recent covenant breach despite the new facility.
Positive Factors
Improved Leverage
Debt reduced materially to $8.8M and a ~0.25x debt/equity ratio meaningfully improves financial flexibility. Lower leverage reduces interest and refinancing strain, supports working-capital and bid capacity for new programs, and helps withstand cyclical EMS demand swings.
Negative Factors
Thin Profitability Margins
Very slim operating and net margins limit the firm's ability to absorb cost inflation, invest in automation, or offer competitive pricing. Low margin geometry reduces free-cash-flow leverage from revenue growth and makes earnings highly sensitive to mix and supply-chain swings.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved Leverage
Debt reduced materially to $8.8M and a ~0.25x debt/equity ratio meaningfully improves financial flexibility. Lower leverage reduces interest and refinancing strain, supports working-capital and bid capacity for new programs, and helps withstand cyclical EMS demand swings.
Read all positive factors
Nortech Systems (NSYS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$40.66M
Dividend YieldN/A
Average Volume (3M)4.23K
Price to Earnings (P/E)39.6
Beta (1Y)0.20
Revenue Growth0.81%
EPS GrowthN/A
CountryUS
Employees701
SectorHealthcare
Sector Strength45
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.37
Shares Outstanding2,794,534
10 Day Avg. Volume3,988
30 Day Avg. Volume4,226
Financial Highlights & Ratios
PEG Ratio1.01
Price to Book (P/B)0.60
Price to Sales (P/S)0.17
P/FCF Ratio9.91
Enterprise Value/Market Cap1.46
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit3.02
Enterprise Value/Ebitda15.32
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Nortech Systems Business Overview & Revenue Model
Company Description
Nortech Systems Incorporated, founded in 1990 and headquartered in Maple Grove, Minnesota, specializes in delivering comprehensive design and manufacturing solutions. The company provides end-to-end services for various intricate systems, includin...
How the Company Makes Money
Nortech Systems primarily makes money by providing contract manufacturing and related services to OEM customers. Revenue is generated mainly from (1) manufacturing and assembling electronic and electromechanical products—such as printed circuit bo...
Nortech Systems Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant improvements in manufacturing efficiencies, certifications, and technological advancements, contributing to an improved adjusted EBITDA. However, these were offset by decreased net sales, increased tax expenses, and reduced inventory levels, creating a balanced outlook.Positive Updates
Improved Manufacturing Efficiencies
Increased manufacturing efficiencies across customer programs transferred to new plants, driving sustained performance improvement and positive mix shift. Achievements in restructuring efforts and cost discipline were noted.
Negative Updates
Decrease in Net Sales
Net sales for 2025 totaled $3.5 million, representing a 2.9% decrease from $31.4 million in 2024, impacted by a decrease in aerospace and defense sales and delays in customer product approvals.
Read all updates
Q3-2025 Updates
Positive
Negative
Improved Manufacturing Efficiencies
Increased manufacturing efficiencies across customer programs transferred to new plants, driving sustained performance improvement and positive mix shift. Achievements in restructuring efforts and cost discipline were noted.
Read all positive updates
Company Guidance
During the Nortex Systems Incorporated Third Quarter 2025 Earnings Conference Call, the company provided guidance highlighting several key metrics. Despite a 2.9% decrease in net sales to $30,500,000 from $31,400,000 in 2024, the company reported an improvement in gross profit, which increased to $5,000,000 or 16.4% of net sales, compared to $3,800,000 or 12.2% in the prior year. This improvement was attributed to increased facility utilization and manufacturing productivity. The company also mentioned a strong customer backlog of $77.3 million, consistent with the previous quarter, and an adjusted EBITDA of $1.3 million, significantly up from $143,000 in 2024. While operating expenses decreased by $46,000, the company faced a substantial income tax expense of $818,000, resulting in a net loss of $146,000 for the quarter. The company remains optimistic about future growth, emphasizing its strategic focus on leveraging its advanced fiber optic capabilities and nearshore manufacturing advantages.Nortech Systems Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
66
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Dec 2025 | Mar 2025 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 121.79M | 118.36M | 128.13M | 139.33M | 134.12M | 115.17M |
| Gross Profit | 19.63M | 18.01M | 16.72M | 23.10M | 20.48M | 15.86M |
| EBITDA | 3.87M | 2.26M | 1.54M | 8.00M | 5.81M | 10.39M |
| Net Income | 1.03M | -252.00K | -1.29M | 6.87M | 2.01M | 7.15M |
Balance Sheet | ||||||
| Total Assets | 76.64M | 71.92M | 72.44M | 75.13M | 69.54M | 67.09M |
| Cash, Cash Equivalents and Short-Term Investments | 1.96M | 1.66M | 916.00K | 960.00K | 1.03M | 643.00K |
| Total Debt | 17.99M | 15.71M | 18.04M | 14.18M | 16.51M | 20.21M |
| Total Liabilities | 41.93M | 37.37M | 38.43M | 39.78M | 41.46M | 40.98M |
| Stockholders Equity | 34.71M | 34.55M | 34.01M | 35.34M | 28.08M | 26.11M |
Cash Flow | ||||||
| Free Cash Flow | 2.97M | 2.08M | -3.52M | 485.00K | 2.96M | -5.83M |
| Operating Cash Flow | 4.11M | 2.74M | -2.25M | 1.77M | 5.40M | -4.54M |
| Investing Cash Flow | -117.00K | -157.00K | -1.26M | -1.28M | -2.43M | -730.00K |
| Financing Cash Flow | -2.98M | -1.87M | 2.77M | -1.28M | -2.67M | 3.93M |
Nortech Systems Technical Analysis
Neutral
7.43
Price Trends
14.86
Negative
12.85
Positive
10.63
Positive
Market Momentum
0.23
Positive
42.16
Neutral
16.58
Positive
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 7.43 is below the 20-day moving average (MA) of 16.37, below the 50-day MA of 14.86, and below the 200-day MA of 10.63, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 42.16 is Neutral, neither overbought nor oversold. The STOCH value of 16.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NSYS.
Nortech Systems Risk Analysis
Nortech Systems disclosed 33 risk factors in its most recent earnings report. Nortech Systems 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
Nortech Systems Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $40.66M | 39.56 | 3.03% | ― | 0.81% | ― | |
58 Neutral | $542.72M | -15.17 | -9.42% | 5.93% | -2.76% | 42.91% | |
53 Neutral | $35.32M | -4.48 | -55.84% | ― | -14.98% | -185.63% | |
53 Neutral | $97.31M | 885.96 | 0.15% | ― | 41.39% | ― | |
52 Neutral | $90.65M | 270.70 | 0.17% | ― | 13.08% | -55.05% | |
52 Neutral | $67.10M | -45.42 | -12.20% | ― | 9.64% | 45.26% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
NSYS
Nortech Systems
14.55
5.81
66.48%
DAIO
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3.76
0.59
18.61%
LGL
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MEI
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15.30
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56.81%
CPSH
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5.05
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LINK
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4.26
-0.86
-16.80%
Nortech Systems Corporate Events
Executive/Board ChangesShareholder Meetings
Nortech Systems Shareholders Back Board, Pay and Incentives
Positive
May 14, 2026
On May 13, 2026, Nortech Systems shareholders elected six directors to one-year terms, with strong support for all nominees, and approved on an advisory basis the compensation of the company’s named executive officers. Shareholders also rati...
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.