NVE (NVEC) AI Stock Analysis

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NVE

(NASDAQ:NVEC)

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Outperform 81 (OpenAI - 5.2)

Rating:81Outperform

Price Target:

$75.00

▲(19.67% Upside)

The score is driven primarily by strong financial quality (high profitability, low leverage, solid cash conversion). The latest earnings call was supportive with strong quarterly performance and constructive operational developments, partially offset by margin compression and uneven year-to-date trends. Technicals are bullish but overextended, which tempers the overall score, while valuation is supported by a high dividend but only moderate on P/E.

Positive Factors

Conservative balance sheet

Extremely low leverage and an equity-dominated capital structure materially reduce financial risk and preserve strategic optionality. Over a multi-month horizon this supports continued R&D spending, capacity investment, dividends and resilience through demand cycles without pressure from interest or covenant constraints.

High profitability and cash conversion

Very high gross and net margins alongside strong operating cash flow provide durable internal funding for growth and shareholder returns. Reliable cash conversion means the company can self-fund capex and dividends, sustaining investment in products and capacity over the coming months despite uneven top-line trends.

Capacity expansion and product innovation

Commissioned equipment and a new wafer-level sensor materially strengthen manufacturing capability and product competitiveness. Bringing wafer‑level packaging online increases throughput and enables miniaturized designs, improving long-term addressable markets in medical, EV and AIoT and supporting sustained revenue opportunities.

Negative Factors

Gross margin compression

A 5-point gross margin decline driven by product mix and higher distributor sales poses a persistent risk to profitability if channel mix doesn't normalize. Lower realized margins reduce retained cash flow and could force tougher trade-offs between pricing, R&D investment, and dividends over the medium term.

Uneven revenue and R&D trends

Irregular top-line momentum and volatile contract R&D create uncertainty in revenue visibility and capacity utilization. This impediment complicates multi-quarter planning, may depress utilization-linked margins, and can limit predictable scaling of production or hiring even as product investments continue.

Volatile defense/adjacent opportunities

Dependence on a volatile defense segment and early-stage adjacent projects (MagNav, MRAM licensing) means meaningful revenue upside is uncertain. These markets require extended ecosystem development or IP monetization, lengthening timeframes for material revenue contribution and increasing execution risk.

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

Market Cap

$312.29M

Dividend Yield6.28%

Average Volume (3M)55.09K

Price to Earnings (P/E)22.1

Beta (1Y)1.06

Revenue Growth-9.48%

EPS Growth-14.28%

CountryUS

Employees41

SectorTechnology

Sector Strength88

IndustrySemiconductors

Share Statistics

EPS (TTM)0.70

Shares Outstanding4,837,166

10 Day Avg. Volume77,235

30 Day Avg. Volume55,095

Financial Highlights & Ratios

PEG Ratio-1.72

Price to Book (P/B)4.95

Price to Sales (P/S)11.91

P/FCF Ratio23.61

Enterprise Value/Market Cap0.97

Enterprise Value/Revenue11.73

Enterprise Value/Gross Profit14.82

Enterprise Value/Ebitda19.29

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

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 include sensors, isolators, and other related components. The company benefits from a diverse revenue model, which includes direct sales to original equipment manufacturers (OEMs), as well as partnerships with key players in various industries that utilize their technology in applications ranging from automotive systems to medical devices. NVE's focus on research and development allows it to maintain a competitive edge in the market, leading to ongoing demand for its innovative products. The company also engages in licensing agreements, which provide an additional revenue stream by allowing third parties to use its patented technologies. Overall, NVE's combination of product sales, partnerships, and licensing contributes significantly to its earnings.

NVE Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue across different business segments, highlighting which areas are driving growth and profitability, and where the company might need to adjust its strategy.

Chart InsightsNVE's product sales have shown volatility, with a recent uptick driven by a 21% increase in non-defense sales, despite a sharp decline in defense sales. Contract R&D revenue has plummeted, contributing to a 6% year-over-year revenue decline. The earnings call highlights new product launches in high-value markets like medical devices and EVs, suggesting a strategic pivot. However, the gross margin has narrowed due to a less profitable product mix, and the tax rate has risen, impacting net income. The company remains profitable, but these shifts indicate a challenging environment ahead.

Data provided by:

The Fly

NVE Earnings Call Summary

Earnings Call Date:Jan 21, 2026

(Q3-2026)

% Change Since: |

Next Earnings Date:May 06, 2026

Earnings Call Sentiment Positive

The call conveyed a generally positive operational and financial picture: strong quarter-over-quarter revenue (+23%) and net income (+11%), meaningful cash generation, successful completion of a multi-year capacity expansion (equipment installed and to be placed into service), new product announcements, and an important two-year contractual extension with Abbott. Offsetting headwinds include gross margin compression (79% vs 84% prior year) driven by product mix and higher distributor sales, a higher effective tax rate in the quarter, reduced other income, and uneven year-to-date R&D revenue trends (9-month contract R&D down 8% and 9-month net income down 8%). Overall, the positive drivers (robust revenue growth, strong margins even after compression, cash flow, new capacity and product momentum, and customer wins) materially outweigh the identified challenges.

Q3-2026 Updates

Positive Updates

Quarterly Revenue and Earnings Growth

Revenue for Q3 FY2026 increased 23% year-over-year. Net income rose 11% to $3.38 million ($0.70 per diluted share) from $3.05 million ($0.63). Product sales increased 16% and contract R&D revenue surged 335% in the quarter. Key profitability metrics remained strong: operating margin 60%, pretax margin 68%, and net margin 54%.

Sustained Cash Generation and Expense Control

Cash flow from operations was $12.2 million for the first 9 months. Total operating expenses decreased 12% year-over-year (R&D down 9%, SG&A down 19%). Working capital improvements included accounts receivable decreasing $1.1 million and inventories down $177,000 in the 9-month period.

Manufacturing Capacity Expansion Nearing Service

Completed installation and calibration of a new equipment cluster; fixed asset purchases were $2.18 million for the first 9 months (including $1.05 million in the December quarter). New equipment increases capacity and wafer-level chip scale packaging capability, with deposition control to within 1 atomic layer and expected to be placed into service by March 31.

New Product Innovations and R&D Momentum

Announced a new wafer-level chip scale sensor (0.65 mm², ~1/3 size of conventionally packaged version) enabling significant miniaturization and sensitivity benefits. Company reports a continuous flow of new products targeting high-value markets (medical devices, EV/autonomous vehicles, advanced robotics, AIoT).

Customer Traction and Channel Momentum

Executed a 2-year supplier extension with Abbott through Dec 31, 2027 that includes price increases for 2026 and 2027. Distributor sales have picked up (signaling inventory drawdown at distributors and improved end-user demand), and recent trade show activity generated qualified leads.

Expected Tax Credits and Cash Tax Reduction

Company expects a full-year tax rate of 16%–17% in FY2026 due to anticipated advanced manufacturing investment tax credits of $700,000–$1,000,000. Accelerated deductions of previously unamortized R&D expenses are expected to reduce cash taxes for the fiscal year by approximately $1.1 million.

Negative Updates

Gross Margin Compression

Gross margin decreased to 79% of revenue in Q3 FY2026 from 84% in the prior year quarter (a 5 percentage-point decline). Management attributed the reduction to a less profitable product mix and increased distributor sales, which typically carry lower margins.

Quarterly Tax and Other Income Headwinds

Effective tax rate increased to 20% for the quarter compared with 15% in the prior year quarter, creating a near-term drag on after-tax results. Other income decreased by $135,000 (prior-year quarter benefited from reclaiming precious metals), and interest income declined 3% due to a smaller marketable securities portfolio.

Mixed R&D Revenue Trends Over 9 Months

Although contract R&D revenue jumped 335% in the quarter, contract R&D for the first 9 months decreased 8% year-over-year. For the first 9 months net income declined 8% to $10.3 million ($2.12 per diluted share), showing uneven performance across the fiscal year.

Margin Pressure from Channel Mix

Rising distributor sales are helping revenue but weigh on gross margins because distributor sales generally have lower margins than direct sales; management noted this as the primary reason for lower gross margin percentage in the quarter.

Defense Market Volatility and Nascent Adjacent Opportunities

Management described defense business as somewhat volatile and noted some softness in prior quarters. Emerging defense opportunities such as MagNav are viewed as interesting but nascent (maps and ecosystem still imprecise), so no immediate design wins were cited. Large-scale MRAM participation is positioned as IP/licensing rather than manufacturing, limiting near-term revenue exposure to broader MRAM markets.

Company Guidance

The company guided that it expects to place its new wafer‑level chip‑scale equipment into service by March 31 (after $2.18M of fixed‑asset purchases in the first nine months, including $1.05M in the December quarter) and indicated operational tailwinds—distributor sales are picking up and defense revenues should return to a more normal flow; it also expects a full‑year fiscal‑2026 effective tax rate of about 16–17%, reflecting anticipated advanced manufacturing investment tax credits of $700k–$1.0M and accelerated R&D deductions that should reduce cash taxes by roughly $1.1M. For context the company reported Q3 revenue up 23% y/y (product sales +16%, contract R&D +335%), gross margin 79% (vs. 84% a year earlier), operating expenses down 12% (R&D −9%, SG&A −19%), net income up 11% to $3.38M ($0.70 diluted EPS) with operating/pretax/net margins of 60%/68%/54%, nine‑month revenue of $18.7M (+0.4%) and nine‑month net income of $10.3M (−8%, $2.12/sh), plus $12.2M cash flow from operations YTD, AR down $1.1M, inventories down $177k, prepaid/other up $323k and accrued liabilities down $366k.

NVE Financial Statement Overview

Summary

Strong overall fundamentals: exceptional profitability, a very conservative balance sheet with minimal leverage, and solid cash conversion. The main constraint is uneven growth, with revenue and cash flow cooling from prior peaks despite modest TTM improvement.

Income Statement

Very Positive

Profitability is exceptional, with very high gross and net margins in both TTM (Trailing-Twelve-Months) and recent annual periods, indicating strong pricing power and cost discipline. However, the growth profile is mixed: revenue surged in 2023 but has declined in 2024 and 2025 (annual) before returning to modest positive growth in TTM, suggesting a post-peak normalization and less consistent top-line momentum. Overall earnings power remains strong, but the uneven revenue trajectory caps the score.

Balance Sheet

Very Positive

The balance sheet is very conservative, with extremely low leverage (debt-to-equity consistently near ~1% or less) and equity representing the vast majority of capital. Returns on equity are robust across the cycle (roughly mid-teens to mid-30%), reflecting strong profitability despite minimal financial leverage. The main weakness is that equity has come down from prior peaks alongside lower earnings, but overall financial risk remains very low.

Cash Flow

Very Positive

Cash generation is strong: operating cash flow comfortably covers debt, and free cash flow tracks net income closely (around ~0.91–1.00), supporting the quality of earnings. That said, free cash flow growth has turned negative recently (annual 2025 and TTM), and operating/free cash flow are off their 2023–2024 levels, pointing to some near-term deceleration. Still, coverage and conversion remain solid.

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	25.84M	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	921.23K	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 Price62.67

Price Trends

50DMA

65.73

Negative

100DMA

65.64

Negative

200DMA

65.49

Negative

Market Momentum

MACD

0.38

Positive

RSI

40.92

Neutral

STOCH

6.51

Positive

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 62.67 is below the 20-day moving average (MA) of 67.44, below the 50-day MA of 65.73, and below the 200-day MA of 65.49, indicating a bearish trend. The MACD of 0.38 indicates Positive momentum. The RSI at 40.92 is Neutral, neither overbought nor oversold. The STOCH value of 6.51 is Positive, 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 face the risk of credit losses Q1, 2024

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

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
NVEC	81 Outperform	$312.29M	22.06	23.36%	6.28%	-9.48%	-14.28%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MRAM	57 Neutral	$240.22M	-398.80	-0.91%	―	-0.41%	-134.49%
AXTI	52 Neutral	$1.04B	-38.75	-12.00%	―	-4.54%	-119.39%
ALMU	52 Neutral	$263.58M	-50.73	-17.77%	―	307.44%	14.77%
XPER	49 Neutral	$251.14M	33.91	1.74%	―	-10.74%	―
WOLF	44 Neutral	$445.35M	-0.97	-349.80%	―	―	―

* Technology Sector Average

Performance Comparison

NVEC

NVE

63.29

-4.32

-6.40%

AXTI

AXT

20.43

18.25

837.16%

WOLF

Wolfspeed Inc

15.53

-13.07

-45.70%

MRAM

Everspin Technologies

9.97

4.17

71.90%

XPER

Xperi Inc

5.11

-4.14

-44.76%

ALMU

Aeluma, Inc.

13.86

6.87

98.28%

NVE Corporate Events

Dividends

NVE Corporation Declares Quarterly Cash Dividend for Shareholders

Positive

Jan 21, 2026

NVE Corporation declared a quarterly cash dividend of $1.00 per share of common stock, scheduled to be paid on February 27, 2026, to shareholders of record as of February 2, 2026. The announcement underscores the company’s continued commitment to returning capital to shareholders and signals confidence in its financial position and cash generation capabilities.

The most recent analyst rating on (NVEC) stock is a Buy with a $71.00 price target. To see the full list of analyst forecasts on NVE stock, see the NVEC Stock Forecast page.

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: Jan 23, 2026