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NVE Corp (NVEC)
NASDAQ:NVEC
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NVE (NVEC) AI Stock Analysis

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NVEC

NVE

(NASDAQ:NVEC)

Rating:67Neutral
Price Target:
$69.00
▲(8.76%Upside)
NVE Corporation's overall stock score is driven by strong financial fundamentals and an attractive dividend yield, offset by weak technical indicators and declining revenue growth. Challenges in the defense sector are notable, but management's strategic cost reductions and focus on R&D provide some optimism for future growth.

NVE (NVEC) vs. SPDR S&P 500 ETF (SPY)

NVE Business Overview & Revenue Model

Company DescriptionNVE Corporation develops and sells devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information in the United States and internationally. The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data. Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position or speed primarily for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers for industrial Internet of Things market. In addition, it undertakes contracts for research and development, and licensing of spintronic magnetoresistive random access memory technology. NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.
How the Company Makes MoneyNVE Corporation generates revenue primarily through the sale of its spintronics-based products, including sensors and couplers, to various industries requiring high-performance and reliable component solutions. The company's key revenue streams include product sales to industrial, healthcare, and consumer electronics markets, where its products are used in applications such as machine health monitoring, biomedical devices, and data communication systems. Additionally, NVE benefits from licensing its proprietary technology and intellectual property to other companies, which provides an additional source of income. Strategic partnerships with industry leaders also contribute to its earnings by enhancing market reach and product development capabilities.

NVE Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q1-2026)
|
% Change Since: -21.35%|
Next Earnings Date:Oct 15, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong operational performance with increased R&D revenue and significant cost reductions. However, there were challenges with decreased product sales, gross margin, and net income, primarily due to volatility in the defense sector. The company is optimistic about future growth driven by new equipment deployment, tax credits, and promising leads from trade shows.
Q1-2026 Updates
Positive Updates
Strong Revenue and Earnings
The company reported strong revenue and earnings for the quarter, driven by an increase in distributor and nondefense sales despite a decrease in defense sales.
Increase in Contract R&D Revenue
Contract R&D revenue increased by 17%, partially offsetting the 11% decrease in product sales.
Decrease in Total Expenses
Total expenses decreased by 20% for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, mainly due to an 18% decrease in R&D expense and a 23% decrease in SG&A.
Advanced Manufacturing Investment Tax Credit
The 25% advanced manufacturing investment tax credit was extended, with expected credits between $700,000 and $800,000 for fiscal 2026.
Strong Profitability Metrics
Operating margin was 62%, pretax margin was 70%, and net margin was 59%.
Deployment of New Equipment
The company deployed new wafer fabrication equipment and expects to complete their two-year multimillion dollar expansion soon.
Market Expansion Through Trade Shows
The company promoted new products at major trade shows in Germany and Silicon Valley, leading to promising leads for future sales.
Negative Updates
Decrease in Revenue and Product Sales
Revenue decreased by 10% year-over-year due to an 11% decrease in product sales, primarily impacted by a decrease in defense industry sales.
Decrease in Gross Margin
Gross margin decreased to 81% from 86% due to a less profitable product mix and strengthening distributor sales.
Decrease in Net Income
Net income for the first quarter of fiscal 2026 decreased by 13% to $3.58 million, compared to $4.1 million for the prior year quarter.
Volatility in Defense Sales
The PUF business, which is linked to defense sales, showed weakness due to variability from procurement cycles, affecting overall revenue.
Company Guidance
During the NVE Corporation Conference Call for the quarter ended June 30, 2025, guidance was provided that highlighted a 10% year-over-year revenue decrease, primarily due to an 11% drop in product sales, offset by a 17% rise in contract R&D revenue. The company noted a decline in defense sales, which are typically volatile due to procurement cycles, but observed stabilization in nondefense sales and a recovery in distributor sales. Gross margin fell to 81% from 86%, reflecting a less profitable product mix and a strengthening of distributor sales, which usually have lower margins. Total expenses were reduced by 20%, with R&D and SG&A expenses decreasing by 18% and 23%, respectively. The net income for the quarter decreased by 13% to $3.58 million, or $0.74 per diluted share. Operating margin was 62%, pretax margin was 70%, and net margin was 59%. The company made fixed asset purchases of $1.06 million, mainly for wafer fabrication equipment, and anticipates realizing $700,000 to $800,000 in advanced manufacturing investment tax credits in fiscal 2026. They also paid a $1 per share dividend, with operating cash flow of $5.19 million covering the $4.84 million dividend. The call emphasized the expectation of sequential growth in military orders and a focus on new product developments and market expansions.

NVE Financial Statement Overview

Summary
NVE exhibits robust financial health with high profitability and stable cash flows. The company's low leverage and strong margins provide a solid foundation, although recent revenue declines and modest return on equity suggest areas for improvement.
Income Statement
70
Positive
NVE has demonstrated strong profitability with a consistent gross profit margin around 84% and a net profit margin of approximately 58% in the latest year. However, the company experienced a decline in revenue growth, with a drop of 13.17% from the previous year, indicating potential challenges in maintaining its revenue base.
Balance Sheet
75
Positive
The company's financial stability is underscored by a low debt-to-equity ratio of 0.01, indicating minimal leverage risk. However, the equity ratio has slightly decreased to 97%, and the return on equity has slightly dropped to 24.18%, reflecting a slight decrease in financial efficiency.
Cash Flow
80
Positive
NVE maintains strong cash flow management, with a high operating cash flow to net income ratio of 0.95 and a free cash flow to net income ratio of 0.87. Despite a significant reduction in free cash flow growth in the latest year, the company remains highly efficient in converting income into cash.
BreakdownDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue25.87M29.80M38.25M26.99M21.37M
Gross Profit21.64M23.03M30.19M20.72M17.24M
EBITDA16.32M18.83M25.64M16.75M13.29M
Net Income15.06M17.12M22.69M14.51M11.69M
Balance Sheet
Total Assets64.28M66.78M69.26M67.47M72.50M
Cash, Cash Equivalents and Short-Term Investments21.73M22.20M17.18M31.29M18.11M
Total Debt838.22K355.15K518.71K602.14K731.73K
Total Liabilities2.01M1.21M2.18M2.90M1.61M
Stockholders Equity62.27M65.57M67.08M64.57M70.89M
Cash Flow
Free Cash Flow13.05M18.23M18.16M12.02M13.30M
Operating Cash Flow14.31M18.25M19.09M12.50M13.36M
Investing Cash Flow2.67M9.58M-8.53M7.02M8.42M
Financing Cash Flow-19.23M-19.21M-19.34M-19.50M-19.43M

NVE Technical Analysis

Technical Analysis Sentiment
Negative
Last Price63.44
Price Trends
50DMA
73.38
Negative
100DMA
67.38
Negative
200DMA
71.20
Negative
Market Momentum
MACD
1.00
Positive
RSI
29.56
Positive
STOCH
53.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVEC, the sentiment is Negative. The current price of 63.44 is below the 20-day moving average (MA) of 76.30, below the 50-day MA of 73.38, and below the 200-day MA of 71.20, indicating a bearish trend. The MACD of 1.00 indicates Positive momentum. The RSI at 29.56 is Positive, neither overbought nor oversold. The STOCH value of 53.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NVEC.

NVE Risk Analysis

NVE disclosed 13 risk factors in its most recent earnings report. NVE 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 3 New Risks
1.
We could incur losses on our marketable securities. Q1, 2024
2.
We face the risk of credit losses Q1, 2024
3.
Our business could be negatively impacted by cybersecurity events or information technology disruptions. Q1, 2024

NVE Peers Comparison

Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$146.94M176.22-0.31%-22.48%-102.37%
67
Neutral
$308.32M21.2123.09%6.31%-9.22%-13.57%
61
Neutral
$1.72B-26.43%-16.95%-2.47%
60
Neutral
$329.84M-24.31%-12.13%-39.21%
59
Neutral
$344.94M-4.71%-4.77%84.82%
56
Neutral
$406.73M-375.37%-10774.57%
50
Neutral
C$3.05B2.51-63.57%2.26%4.49%-6.15%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NVEC
NVE
63.44
-16.79
-20.93%
MRAM
Everspin Technologies
6.36
0.26
4.26%
VLN
Valens
3.12
0.94
43.12%
NVTS
Navitas Semiconductor
8.79
4.91
126.55%
BZAI
Blaize Holdings
4.33
-6.87
-61.34%
XPER
Xperi Inc
7.54
-0.41
-5.16%

NVE Corporate Events

Dividends
NVE Corporation Declares Quarterly Cash Dividend
Neutral
Jul 23, 2025

NVE Corporation announced that its Board of Directors has approved a quarterly cash dividend of $1.00 per share of common stock. This dividend is payable on August 29, 2025, to shareholders who are recorded as of August 4, 2025.

Dividends
NVE Corporation Declares Quarterly Cash Dividend
Positive
May 7, 2025

NVE Corporation announced that its Board of Directors has approved a quarterly cash dividend of $1.00 per share of common stock. This dividend is payable on May 30, 2025, to shareholders who are recorded as of May 19, 2025, indicating a continued commitment to returning value to its shareholders.

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: Jul 26, 2025