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Vicor Corp (VICR)
NASDAQ:VICR
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Vicor
(NASDAQ:VICR)
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Rating:77Outperform
Price Target:
$237.00
▲(13.29% Upside)
Action:ReiteratedDate:03/03/26
The score is driven primarily by strong financial quality (especially the very conservative balance sheet) and a constructive earnings outlook supported by improving bookings/backlog and a profitability rebound. This is partially offset by premium valuation (high P/E) and technically overbought conditions that raise near-term downside risk.
Positive Factors
Conservative Balance Sheet
Extremely low leverage and a strong cash position provide durable financial flexibility to fund fab expansion, weather demand cyclicality, or pursue strategic opportunities without stressing solvency. This lowers bankruptcy risk and supports long-term capital allocation optionality.
High Margins & Cash Conversion
A clear profitability rebound with high gross and net margins underpins sustainable cash generation. Free cash flow covered ~85% of net income in 2025, indicating margins translate into durable free cash that can fund capex, R&D and shareholder returns over multiple cycles.
IP Licensing & Design Wins
Growing royalty streams diversify revenue away from product shipments and are high-margin and scalable. Combined with Gen‑4/Gen‑5 customer ramps and rising backlog, licensing plus design‑wins create recurring, structurally higher-margin revenue and strengthen long-term competitive moat.
Negative Factors
Revenue Volatility
Uneven top-line trends increase forecasting uncertainty and complicate capacity and margin planning. Persistent demand swings strain operational planning, make investment timing (fabs, inventory) harder, and raise execution risk as management balances smoothing supply with avoiding excess fixed costs.
Capacity & Capex Risk
Approaching Fab 1 capacity limits creates a structural growth bottleneck absent timely investment or partners. A multi-hundred-million dollar second fab has long lead times and execution/financing risks, potentially throttling revenue at scale and forcing reliance on third-party manufacturing.
Earnings Noise from Royalties & One-offs
Material one-time items and lumpy royalty timing produce noisy GAAP results and complicate assessment of underlying profitability. This reduces predictability of earnings and free cash flow, making long-term planning and investor confidence more difficult without clearer recurring baseline metrics.
Vicor (VICR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.34B
Dividend YieldN/A
Average Volume (3M)636.83K
Price to Earnings (P/E)80.2
Beta (1Y)1.84
Revenue Growth11.55%
EPS Growth1745.46%
CountryUS
Employees1,074
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.01
Shares Outstanding32,925,915
10 Day Avg. Volume825,622
30 Day Avg. Volume636,834
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)6.89
Price to Sales (P/S)12.03
P/FCF Ratio41.12
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue20.81
Enterprise Value/Gross Profit36.32
Enterprise Value/Ebitda83.10
Forecast
1Y Price Target
$185.00Price Target Upside-11.56% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)2.04
Revenue Forecast (FY)$468.98M
Vicor Business Overview & Revenue Model
Company DescriptionVicor Corporation, together with its subsidiaries, designs, develops, manufactures, and markets modular power components and power systems for converting electrical power in the United States, Europe, the Asia Pacific, and internationally. The company offers a range of brick-format DC-DC converters; complementary components; and input and output voltage, and output power products, as well as electrical and mechanical accessories. It also provides custom power systems solutions. The company serves independent manufacturers of electronic devices, original equipment manufacturers, and their contract manufacturers in the aerospace and aviation, defense electronics, industrial automation and equipment, instrumentation, test equipment, solid state lighting, telecommunications and networking infrastructure, and vehicles and transportation markets. Vicor Corporation was incorporated in 1981 and is headquartered in Andover, Massachusetts.
How the Company Makes MoneyVicor generates revenue primarily through the sale of its power management products, which include AC-DC power supplies, DC-DC converters, and custom power solutions. The company operates on a business model that focuses on high-value, high-margin products, catering to industries that require reliable and efficient power solutions. Key revenue streams include direct sales to OEMs (Original Equipment Manufacturers), distribution partnerships, and long-term contracts with major clients in sectors such as telecommunications and data centers. Additionally, Vicor benefits from engineering and design services, providing tailored solutions to meet specific customer needs. Strategic partnerships with technology firms enhance Vicor's market reach and innovation capabilities, contributing positively to its overall earnings.
Vicor Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call presented a strong recovery and clear momentum: meaningful year-over-year revenue growth, a return to solid profitability, improved gross margins, a robust cash position, and strengthening bookings/backlog. IP licensing became a material contributor and management outlined substantial market opportunities (notably in high-end computing and VPD). Offsetting these positives are short-term timing volatility in royalties (catch-up effects and one-time litigation proceeds), modest declines in brick products, and a significant near-term capacity planning challenge (Fab 1 nearing high utilization with multi-hundred-million-dollar capex and potential multi-year timing for additional owned capacity). On balance, the favorable growth, profitability turnaround, cash strength, backlog improvement and licensing momentum materially outweigh the cited risks and timing issues.Q4-2025 Updates
Positive Updates
Q4 and Full-Year Revenue Growth
Q4 product revenue was $92.7M, up 4.5% sequentially and up 15.3% year-over-year. Full-year product revenue was $350.3M, up 12.1% YoY. Total product + royalty revenue including a $45M patent litigation settlement was $452.7M for FY2025, up 26.1% YoY from $359.1M.
Royalty and Licensing Momentum
Full-year royalty revenue was $57.4M, up 23.2% YoY (does not include the $45M one-time patent settlement). Management states IP licensing became a major contributor in 2025 and expects licensing to expand materially, referencing potential for 'hundreds of millions' in future licensing revenues and additional licensees.
Profitability Turnaround
Fiscal 2025 operating income was $81.8M (18.1% of revenue including the patent settlement) vs an operating loss of $1.3M in the prior year. Full-year net income rose to $118.6M from $6.1M, and fully diluted EPS increased to $2.61 from $0.14.
Improved Gross Margins Year-over-Year
Consolidated gross margin for FY2025 rose to 57.3%, up 6.1 percentage points from 51.2% in the prior year. Q4 gross margin was 55.4% (note: a 2.1 percentage point QoQ decline driven by a Q3 royalty catch-up).
Strong Balance Sheet and Cash Position
Cash and cash equivalents were $402.8M at quarter end. Q4 operating cash flow was ~$15.7M, accounts receivable net of reserves was $60.7M (DSOs 44 days), and inventories were $91.3M (up 1% sequentially). Q4 capex was $5.5M.
Improving Demand Metrics and Backlog
Book-to-bill improved (Q4 >1, management cited >1.2 in Q4 and continuing improvement into Q1), and 1-year backlog increased 15.8% sequentially to $176.9M, indicating strengthening bookings and demand visibility.
Segment Wins and Product Momentum
Advanced Products revenue for FY2025 increased 26% to $248.6M (from $197.3M), and the lead VPD customer is ramping Gen 4 production while planning a Gen 5 transition beginning in H2 2026—supporting a steep ramp through the end of 2026.
Capacity Planning and Large Market Opportunity
Management reports Fab 1 capacity is slightly above $1B annual product revenue (targeting ~80% utilization for optimal operation). They are planning a second fab/campus (up to 0.5M sq ft potential) and assessing alternate/partner sources to meet expected demand; estimated incremental fab capex range cited at ~$250–300M.
Negative Updates
Sequential Drop in Q4 Royalty Revenue
Q4 royalty revenue was $14.5M, a 33.1% sequential decrease from $21.7M in Q3 and a 7.8% YoY decrease from $15.8M. Management attributed the QoQ drop to a catch-up amount included in Q3, highlighting timing volatility in licensing receipts.
Advanced Products Sequential Weakness (Timing Effect)
Advanced Product revenue decreased 4.4% sequentially in Q4 (management attributes this in part to the royalty catch-up effect), reflecting short-term variability in product + royalty mix quarter-to-quarter.
Brick Products Slight Decline
Brick Products revenue decreased 1.6% YoY to $159.1M (from $161.7M), and brick segment weakness persists relative to Advanced Products growth.
Capacity Constraints and Timing Risk for Expansion
Management expects Fab 1 to approach high utilization within a year; second fab capacity may not be available until several years out (discussions indicated second-fab availability could be delayed, and building/acquisition alternatives were being evaluated). This creates execution risk if demand ramps faster than capacity additions (and second-fab capex estimated at ~$250–300M).
Revenue Volatility from One-Time Items and Tax Anomalies
FY results were boosted by a $45M patent litigation settlement (one-time), and Q4 recorded a tax benefit of ~$27.3M (effective tax rate -142%) due to partial recognition of deferred tax assets; FY effective tax rate was -25.4%. These one-offs create volatility in GAAP results and complicate baseline comparisons.
Short-Term Distribution and Expense Headwinds
Shipments to stocking distributors decreased 11.1% sequentially (although up 5.3% YoY). Q4 operating expense increased 2.7% QoQ and Q4 equity-based compensation totaled ~ $4.4M across COGS, SG&A and R&D—items that can pressure near-term margins.
Company Guidance
Management said they will not provide quarterly guidance because licensing timing/amounts are unpredictable, but gave directional guidance that 2026 should deliver record bookings, revenues and profitability: book‑to‑bill was >1.2 in Q4 (and rising in Q1) with 1‑year backlog up 15.8% to $176.9M. They expect significantly higher utilization of the first chip fab — targeting roughly 80% (the fab can support slightly >$1.0B of revenue/year, implying an ~ $800M run‑rate at 80%) within about a year — and are taking capacity reservations while exploring a second fab (capacity possibly not available until 2028) or alternate sources; estimated second‑fab investment is on the order of $250–$300M and a campus could support up to ~0.5M sq ft vs the current ~300k sq ft. They reiterated strong licensing momentum (2025 royalty base $57.4M, excluding a $45M one‑time settlement, and an expectation of “hundreds of millions” of future licensing revenue with roughly half a dozen major licensees), ongoing Gen‑4 ramps (lead customer through end‑2026) and Gen‑5 transitions in H2 2026, and noted operational metrics (cash $402.8M, Q4 inventories $91.3M with turns ~1.96, DSOs 44 days, Q4 operating cash flow ~$15.7M, Q4 capex $5.5M, Q4 gross margin 55.4% and FY 57.3%, Q4 operating margin 14.6%).Vicor Financial Statement Overview
Summary
Strong overall fundamentals led by an excellent, low-leverage balance sheet (very low debt-to-equity) and solid 2025 profitability and cash generation. The main constraint is historical volatility and uneven top-line trajectory, including recent revenue contraction noted in the financial statement analysis.Income Statement
Profitability is a clear strength, with 2025 showing strong margins (about 53% gross margin and ~29% net margin) and a sharp rebound from the weak 2024 profit level. However, growth has been inconsistent: revenue declined in 2024 and again in 2025 (down ~8% in 2025), indicating demand volatility despite strong underlying economics.78
Positive
Balance Sheet
The balance sheet is very conservative: debt is extremely low relative to equity (debt-to-equity ~0.02 in 2025), providing strong financial flexibility and low solvency risk. Equity and assets have also grown meaningfully over time. The main swing factor is profitability variability, which drove return on equity from very low in 2024 to strong in 2025.92
Very Positive
Cash Flow
Cash generation is solid in the most recent year, with strong operating cash flow and free cash flow in 2025 and free cash flow largely supporting reported earnings (free cash flow at ~85% of net income). That said, cash flow has been volatile historically, including negative free cash flow in 2022 and weaker cash conversion in 2024, which tempers the overall quality/stability score.80
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 407.70M | 359.06M | 405.06M | 399.08M | 359.36M |
| Gross Profit | 214.43M | 184.00M | 204.93M | 180.56M | 178.20M |
| EBITDA | 94.57M | 36.82M | 68.60M | 47.48M | 67.31M |
| Net Income | 118.56M | 6.13M | 53.59M | 25.45M | 56.63M |
Balance Sheet | |||||
| Total Assets | 785.83M | 641.12M | 594.89M | 536.90M | 477.20M |
| Cash, Cash Equivalents and Short-Term Investments | 402.81M | 277.27M | 242.22M | 190.61M | 227.63M |
| Total Debt | 12.78M | 7.34M | 8.23M | 8.46M | 4.78M |
| Total Liabilities | 74.02M | 70.83M | 53.78M | 72.56M | 53.30M |
| Stockholders Equity | 711.56M | 570.07M | 540.87M | 464.09M | 423.60M |
Cash Flow | |||||
| Free Cash Flow | 119.23M | 27.24M | 41.08M | -41.03M | 7.12M |
| Operating Cash Flow | 139.55M | 50.84M | 74.53M | 22.94M | 54.88M |
| Investing Cash Flow | -20.32M | -23.60M | -33.45M | -18.97M | -43.66M |
| Financing Cash Flow | 6.32M | 7.99M | 10.60M | 4.44M | 10.09M |
Vicor Technical Analysis
Positive
209.19
Price Trends
149.18
Positive
116.28
Positive
81.78
Positive
Market Momentum
14.57
Negative
74.18
Negative
97.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VICR, the sentiment is Positive. The current price of 209.19 is above the 20-day moving average (MA) of 170.05, above the 50-day MA of 149.18, and above the 200-day MA of 81.78, indicating a bullish trend. The MACD of 14.57 indicates Negative momentum. The RSI at 74.18 is Negative, neither overbought nor oversold. The STOCH value of 97.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VICR.
Vicor Risk Analysis
Vicor disclosed 17 risk factors in its most recent earnings report. Vicor reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Vicor Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $9.34B | 80.17 | 18.50% | ― | 11.55% | 1745.46% | |
76 Outperform | $2.78B | 49.56 | 15.66% | 0.16% | 23.70% | 14.78% | |
76 Outperform | $2.78B | 45.73 | 16.40% | 0.15% | 23.70% | 14.78% | |
68 Neutral | $4.72B | 32.51 | 18.33% | ― | 9.37% | 15.70% | |
68 Neutral | $2.00B | -33.46 | -5.34% | ― | -4.87% | -235.48% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $1.05B | 88,403.88 | 4.85% | ― | 10.76% | ― |
* Technology Sector Average
VICR
Vicor
209.19
148.57
245.08%
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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.