NVE (NVEC) AI Stock Analysis

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NVE

(NASDAQ:NVEC)

Rating:67Neutral

Price Target:

$69.00

▲(8.92% 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)

Market Cap

$306.43M

Dividend Yield6.31%

Average Volume (3M)63.95K

Price to Earnings (P/E)21.1

Beta (1Y)1.14

Revenue Growth-9.22%

EPS Growth-13.57%

CountryUS

Employees41

SectorTechnology

Sector Strength94

IndustrySemiconductors

Share Statistics

EPS (TTM)0.74

Shares Outstanding4,837,166

10 Day Avg. Volume48,249

30 Day Avg. Volume63,945

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.11

Enterprise Value/Revenue13.54

Enterprise Value/Gross Profit16.44

Enterprise Value/Ebitda22.06

Forecast

1Y Price Target

$69.00

Price Target Upside8.92% Upside

Rating ConsensusHold

Number of Analyst Covering1

NVE Business Overview & Revenue Model

Company DescriptionNVE Corporation (NASDAQ: NVEC) is a leading provider of high-performance components for the data storage and telecommunications industries. The company specializes in the design and manufacturing of spintronic devices, which leverage the intrinsic spin of electrons to enhance performance and energy efficiency in various applications. NVE's core products include sensors, isolators, and other advanced components used in data communication, industrial automation, and medical devices.

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: -20.14%|

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 demonstrates strong profitability with high margins and effective cash flow management. The company's balance sheet is robust, with low leverage and substantial equity. However, declining revenue growth presents a potential risk in the competitive semiconductor industry.

Income Statement

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

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

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.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	25.87M	29.80M	38.25M	26.99M	21.37M
Gross Profit	21.64M	23.03M	30.19M	20.72M	17.24M
EBITDA	16.32M	18.83M	25.64M	16.75M	13.29M
Net Income	15.06M	17.12M	22.69M	14.51M	11.69M
Balance Sheet
Total Assets	64.28M	66.78M	69.26M	67.47M	72.50M
Cash, Cash Equivalents and Short-Term Investments	21.73M	22.20M	17.18M	31.29M	18.11M
Total Debt	838.22K	355.15K	518.71K	602.14K	731.73K
Total Liabilities	2.01M	1.21M	2.18M	2.90M	1.61M
Stockholders Equity	62.27M	65.57M	67.08M	64.57M	70.89M
Cash Flow
Free Cash Flow	13.05M	18.23M	18.16M	12.02M	13.30M
Operating Cash Flow	14.31M	18.25M	19.09M	12.50M	13.36M
Investing Cash Flow	2.67M	9.58M	-8.53M	7.02M	8.42M
Financing Cash Flow	-19.23M	-19.21M	-19.34M	-19.50M	-19.43M

NVE Technical Analysis

Technical Analysis Sentiment

Negative

Last Price63.35

Price Trends

50DMA

69.59

Negative

100DMA

66.01

Negative

200DMA

69.05

Negative

Market Momentum

MACD

-2.33

Negative

RSI

40.74

Neutral

STOCH

71.66

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 63.35 is below the 20-day moving average (MA) of 64.69, below the 50-day MA of 69.59, and below the 200-day MA of 69.05, indicating a bearish trend. The MACD of -2.33 indicates Negative momentum. The RSI at 40.74 is Neutral, neither overbought nor oversold. The STOCH value of 71.66 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

We could incur losses on our marketable securities. Q1, 2024

We face the risk of credit losses Q1, 2024

Our business could be negatively impacted by cybersecurity events or information technology disruptions. Q1, 2024

NVE Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRAM	69 Neutral	$139.37M	81.05	2.76%	―	-11.27%	-9.20%
Sector *	68 Neutral	¥242.18B	15.61	6.62%	2.44%	9.08%	2.46%
NVEC	67 Neutral	$306.43M	21.08	23.09%	6.31%	-9.22%	-13.57%
NVTS	55 Neutral	$1.55B	―	-32.05%	―	-25.65%	-130.95%
XPER	49 Neutral	$272.47M	―	-0.92%	―	-6.09%	97.33%
VLN	48 Neutral	$225.18M	―	-24.56%	―	8.70%	-13.95%
BZAI	46 Neutral	$384.36M	―	-1405.64%	―	―	-10774.57%

* Technology Sector Average

Performance Comparison

NVEC

NVE

63.01

-13.57

-17.72%

MRAM

Everspin Technologies

6.00

0.42

7.53%

VLN

Valens

2.11

-0.15

-6.64%

NVTS

Navitas Semiconductor

6.92

3.82

123.23%

BZAI

Blaize Holdings

3.65

-7.56

-67.44%

XPER

Xperi Inc

5.91

-1.64

-21.72%

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.

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