Nortech Systems (NSYS) AI Stock Analysis

• Market Cap: $25.92M
• Dividend Yield: N/A
• Average Volume (3M): 5.70K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.24
• Revenue Growth: -14.49%
• EPS Growth: -149.37%
• Country: US
• Employees: 701
• Sector: Healthcare
• Sector Strength: 45
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.11
• Shares Outstanding: 2,786,134
• 10 Day Avg. Volume: 6,743
• 30 Day Avg. Volume: 5,698
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.81
• Enterprise Value/Revenue: 0.40
• Enterprise Value/Gross Profit: 3.22
• Enterprise Value/Ebitda: -42.14
• 1Y Price Target: $9.00
• Price Target Upside: -8.91% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 51 Neutral
• Price Target: $9.00 ▼(-8.91% Downside)

Nortech Systems faces significant financial challenges, with negative profitability and cash flow issues being the most pressing concerns. While technical indicators show some neutral momentum, the valuation remains unattractive due to negative earnings. The earnings call provided a balanced view with both positive operational improvements and persistent financial challenges. The recent corporate event of amending the credit line adds some stability, but overall, the stock score reflects the need for substantial improvements in financial performance.

Nortech Systems Business Overview & Revenue Model

Company Description

Nortech Systems (NSYS) is a publicly traded company that operates primarily in the electronics manufacturing services (EMS) sector. The company specializes in providing engineered electronic components, systems, and services for a wide range of industries, including aerospace, defense, medical, and industrial markets. Nortech focuses on delivering high-quality products and solutions such as custom electronic assemblies, design and engineering services, and supply chain management, enhancing its clients' operational efficiencies and product reliability.

How the Company Makes Money

Nortech Systems generates revenue through multiple key streams. The primary source of income comes from the manufacturing and assembly of electronic components and systems, which are tailored to meet the specific needs of various industries. The company engages in long-term contracts with clients, ensuring a steady flow of income. Additionally, Nortech offers design and engineering services, which create additional revenue opportunities by helping clients develop new products. The company's strategic partnerships with technology providers and suppliers also play a significant role in its earnings, enabling it to provide integrated solutions and enhancing its competitive position in the market.

Nortech Systems Financial Statement Overview

Summary

Nortech Systems is facing financial difficulties, with declining revenues, negative profitability, and cash flow challenges. The balance sheet shows moderate leverage, but the negative return on equity is concerning. Overall, the company needs to address its operational inefficiencies and improve cash flow management to enhance financial stability.

Income Statement

Nortech Systems has experienced declining revenue growth, with a negative growth rate in the TTM period. The gross profit margin has decreased over time, indicating pressure on profitability. The net profit margin is negative, reflecting ongoing losses. EBIT and EBITDA margins have also turned negative, highlighting operational challenges.

Balance Sheet

The company's debt-to-equity ratio has improved slightly but remains moderate, suggesting manageable leverage. However, the return on equity has turned negative in the TTM period, indicating inefficiencies in generating returns for shareholders. The equity ratio is stable, reflecting a balanced capital structure.

Cash Flow

Nortech Systems faces significant cash flow challenges, with negative operating and free cash flows in the TTM period. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is unfavorable, indicating cash flow issues relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	117.60M	128.13M	139.33M	134.12M	115.17M	104.11M
Gross Profit	14.57M	16.72M	23.10M	20.48M	15.86M	8.46M
EBITDA	-1.11M	1.54M	8.00M	3.87M	4.97M	1.58M
Net Income	-3.22M	-1.29M	6.87M	2.01M	7.15M	-1.55M
Balance Sheet
Total Assets	74.83M	72.44M	75.13M	69.54M	67.09M	57.63M
Cash, Cash Equivalents and Short-Term Investments	652.00K	916.00K	960.00K	1.03M	643.00K	352.00K
Total Debt	21.01M	18.04M	14.18M	18.06M	20.21M	21.79M
Total Liabilities	41.44M	38.43M	39.78M	41.46M	40.98M	38.92M
Stockholders Equity	33.39M	34.01M	35.34M	28.08M	26.11M	18.72M
Cash Flow
Free Cash Flow	-4.18M	-3.52M	485.00K	2.96M	-5.90M	844.00K
Operating Cash Flow	-3.56M	-2.25M	1.77M	5.40M	-4.54M	1.36M
Investing Cash Flow	-610.00K	-1.26M	-1.28M	-2.43M	-730.00K	5.50M
Financing Cash Flow	3.28M	2.77M	-1.28M	-2.67M	3.93M	-3.96M

Nortech Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 9.88 is above the 20-day moving average (MA) of 9.29, above the 50-day MA of 8.84, and above the 200-day MA of 9.44, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 64.80 is Neutral, neither overbought nor oversold. The STOCH value of 57.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NSYS.

Nortech Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPSH	68 Neutral	50.11M	-27.25	-21.61%	―	7.47%	-133.39%
LGL	64 Neutral	38.08M	176.50	0.00%	―	26.84%	-45.92%
NSYS	51 Neutral	$25.92M	6.41	-9.26%	―	-14.49%	-149.37%
REFR	44 Neutral	48.12M	-27.34	-50.35%	―	-4.46%	-17.79%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Nortech Systems Corporate Events

Nortech Systems Announces Senior VP Retirement Plan

On August 18, 2025, John Lindeen, Senior Vice President of Global Operations at Nortech Systems, announced his intention to retire and resign, effective by the end of the first quarter of 2026. The company has begun the search for a permanent replacement, ensuring a smooth transition in its leadership team.

Nortech Systems Amends Credit Line for Stability

On July 29, 2025, Nortech Systems amended its $15 million senior secured revolving line of credit with Bank of America, NA, extending the expiration to August 31, 2026. This amendment provides Nortech Systems with an extended financial runway, potentially enhancing its operational stability and flexibility in the coming year.

Nortech Systems to Sell Blue Earth Facility

On June 16, 2025, Nortech Systems Incorporated entered into an agreement to sell its facility in Blue Earth, MN, to Clark Equities LLC for $0.5 million. The transaction, expected to close by July 16, 2025, is subject to customary conditions, including due diligence and regulatory approvals, potentially impacting the company’s operational footprint.