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NVE Corporation (NVEC)
:NVEC
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NVE (NVEC) AI Stock Analysis

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NVEC

NVE

(NASDAQ:NVEC)

Rating:74Outperform
Price Target:
$73.00
▲(9.41% Upside)
NVE's strong financial performance, particularly its profitability and balance sheet strength, is a key positive factor. However, technical indicators suggest potential bearish momentum, and mixed earnings call sentiment highlights challenges in revenue and sales. The attractive dividend yield supports the valuation score.

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 generates revenue primarily through the sale of its spintronic products, which are utilized in a wide range of applications across multiple sectors, including data storage, telecommunications, and industrial automation. The company's revenue model is based on direct sales to original equipment manufacturers (OEMs) and distributors, as well as licensing agreements for its patented technologies. Key revenue streams include the sale of sensors, isolators, and other devices, while ongoing partnerships with technology firms and collaborations in research and development help bolster its market position and drive further innovation. Additionally, NVE's focus on high-performance and energy-efficient solutions positions it well in growing markets, contributing to its overall earnings.

NVE Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q1-2026)
|
% Change Since: |
Next Earnings Date:Oct 15, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several positive developments, such as an increase in contract R&D revenue, a significant decrease in total expenses, and proactive capital investments. However, these were counterbalanced by a notable decrease in revenue, product sales, and gross margin, primarily due to challenges in defense sales. The sentiment is mixed with potential for future growth in defense and new product markets, but immediate financial metrics show declines.
Q1-2026 Updates
Positive Updates
Increase in Contract R&D Revenue
Contract R&D revenue increased by 17%, partially offsetting the decrease in product sales.
Decrease in Total Expenses
Total expenses decreased by 20% due to an 18% decrease in R&D expense and a 23% decrease in SG&A.
Operating Cash Flow and Dividend Coverage
Operating cash flow was $5.19 million, which more than covered the $4.84 million dividend paid.
New Product Launches and Trade Show Presence
Launched wafer-level chip scale sensors and advanced magnetic switch sensors, promoted at SENSOR+TEST and Sensors Converge trade shows.
Advanced Manufacturing Investment Tax Credit
The 25% advanced manufacturing investment tax credit was extended, expected to result in $700,000 to $800,000 in credits.
Positive Long-term Outlook for Defense Sales
Expectation of growth in the PUF business driven by DoD budget increases and defense budgets globally.
Negative Updates
Decrease in Revenue and Product Sales
Revenue decreased by 10% year-over-year due to an 11% decrease in product sales, primarily driven 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 lower margins from distributor sales.
Decrease in Net Income
Net income decreased by 13% to $3.58 million compared to $4.1 million in the prior year quarter.
Challenges in Defense Sales
Defense sales were variable and decreased, affecting overall revenue performance.
Company Guidance
In the recent NVE Corporation conference call for the first quarter of fiscal year 2026, the company provided guidance indicating a mixed financial performance. The quarter saw a 10% year-over-year revenue decrease, attributed to an 11% drop in product sales, partially offset by a 17% rise in contract R&D revenue. Despite a decrease in defense sales, nondefense and distributor sales showed encouraging signs of recovery. The gross margin fell to 81% from 86% due to a less profitable product mix, and total expenses were reduced by 20% due to decreases in R&D and SG&A expenses. Net income declined by 13% to $3.58 million, or $0.74 per diluted share, with comprehensive income at $3.65 million after accounting for unrealized gains. However, key profitability metrics remained strong, with an operating margin of 62%, pretax margin of 70%, and net margin of 59%. The company's capital expenditures were notable, with $1.06 million spent on fixed assets, primarily for wafer fabrication equipment. NVE also expects to benefit from a 25% advanced manufacturing investment tax credit, anticipating credits between $700,000 and $800,000. Additionally, operating cash flow was robust at $5.19 million, comfortably covering the $4.84 million quarterly dividend payout.

NVE Financial Statement Overview

Summary
NVE Corporation demonstrates strong profitability with high margins and effective cash flow management. The balance sheet is robust, with low leverage and substantial equity. However, declining revenue growth presents a potential risk that requires strategic attention.
Income Statement
78
Positive
The income statement shows resilient gross and net profit margins, with TTM gross profit margin at 82.35% and net profit margin at 57.72%. However, revenue growth has been declining, with a significant drop of 15.77% from 2023 to 2024 and a further decline in the trailing twelve months. Despite the contraction in revenue, the company maintains strong profitability metrics with an EBIT margin of 61.07% and EBITDA margin of 61.37% in TTM.
Balance Sheet
85
Very Positive
The balance sheet reflects a robust financial position with a low debt-to-equity ratio of 0.01 in TTM, indicating very low leverage. The equity ratio remains strong at 96.11%, showcasing financial stability. Return on equity (ROE) in TTM is impressive at 23.80%, reflecting efficient utilization of equity to generate profits.
Cash Flow
82
Very Positive
Cash flow analysis reveals a healthy free cash flow to net income ratio of 0.84 in TTM, indicating strong cash generation relative to net income. Operating cash flow to net income ratio stands at 0.94, demonstrating efficient conversion of income to cash. However, free cash flow growth has been inconsistent, showing a decrease from 2023 to 2024.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue25.20M25.87M29.80M38.25M26.99M21.37M
Gross Profit20.75M21.64M23.03M30.19M20.72M17.24M
EBITDA16.14M16.32M18.83M25.84M16.75M13.29M
Net Income14.54M15.06M17.12M22.69M14.51M11.69M
Balance Sheet
Total Assets63.55M64.28M66.78M69.26M67.47M72.50M
Cash, Cash Equivalents and Short-Term Investments15.83M21.73M22.20M17.18M31.29M18.11M
Total Debt892.30K921.23K355.15K518.71K602.14K731.73K
Total Liabilities2.46M2.01M1.21M2.18M2.90M1.61M
Stockholders Equity61.09M62.27M65.57M67.08M64.57M70.89M
Cash Flow
Free Cash Flow12.25M13.05M18.23M18.16M12.02M13.30M
Operating Cash Flow13.65M14.31M18.25M19.09M12.50M13.36M
Investing Cash Flow2.80M2.67M9.58M-8.53M7.02M8.42M
Financing Cash Flow-19.23M-19.23M-19.21M-19.34M-19.50M-19.43M

NVE Technical Analysis

Technical Analysis Sentiment
Positive
Last Price66.72
Price Trends
50DMA
68.08
Negative
100DMA
66.62
Negative
200DMA
68.39
Negative
Market Momentum
MACD
-0.52
Negative
RSI
50.81
Neutral
STOCH
34.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVEC, the sentiment is Positive. The current price of 66.72 is above the 20-day moving average (MA) of 63.84, below the 50-day MA of 68.08, and below the 200-day MA of 68.39, indicating a neutral trend. The MACD of -0.52 indicates Negative momentum. The RSI at 50.81 is Neutral, neither overbought nor oversold. The STOCH value of 34.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 face the risk of credit losses Q1, 2024
2.
We could incur losses on our marketable securities. 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$315.67M21.7223.09%5.99%-9.22%-13.57%
65
Neutral
$144.80M85.662.76%-11.27%-9.20%
61
Neutral
$35.52B8.84-11.06%1.87%8.55%-8.14%
52
Neutral
$1.18B-32.05%-25.65%-130.95%
49
Neutral
$202.98M-24.56%8.70%-13.95%
49
Neutral
$320.17M-1405.64%-3299.52%
46
Neutral
$278.49M-0.92%-6.09%97.33%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NVEC
NVE
66.72
-4.10
-5.79%
MRAM
Everspin Technologies
6.51
1.31
25.19%
VLN
Valens
1.99
0.09
4.74%
NVTS
Navitas Semiconductor
5.60
3.33
146.70%
BZAI
Blaize Holdings
3.11
-8.16
-72.40%
XPER
Xperi Inc
6.13
-2.14
-25.88%

NVE Corporate Events

Executive/Board ChangesShareholder Meetings
NVE Concludes Successful 2025 Annual Shareholders Meeting
Neutral
Aug 12, 2025

NVE held its 2025 Annual Meeting of Shareholders on August 7, 2025, to elect five directors, approve executive compensation, and ratify Boulay PLLP as the independent accounting firm for the fiscal year ending March 31, 2026. All director nominees were elected, executive compensation was approved, and the accounting firm selection was ratified, with no opposition to the proposals.

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.

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: Sep 05, 2025