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Vicor Corp (VICR)
NASDAQ:VICR
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Vicor
(NASDAQ:VICR)
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Rating:71Outperform
Price Target:
$174.00
▼(-13.60% Downside)
Action:ReiteratedDate:01/06/26
The score is driven primarily by strong underlying financial performance (healthy margins, strong cash generation, and very low leverage). Earnings-call takeaways are constructive but mixed due to sequential revenue decline and margin pressure, while technicals show strong momentum but an overbought RSI raises near-term risk. Valuation is the biggest constraint, with a high P/E and no stated dividend yield.
Positive Factors
High Profitability & Margins
Sustained high gross and net margins reflect differentiated, high-value power conversion products and pricing power with OEM customers. Durable margins support reinvestment in R&D and allow the company to fund product development and absorb cyclical downturns without immediate cash strain.
Strong Cash Generation
Robust cash conversion and double-digit FCF growth enhance financial flexibility for capex, R&D, and buybacks. Reliable operating cash generation reduces refinancing risk, supports long-term product investment, and provides a buffer during demand variability over multi-quarter cycles.
Scaling IP Licensing Revenue
A growing, high-margin licensing stream diversifies revenue beyond unit sales and improves predictability. If execution matches the stated ramp, recurring royalties can materially de-risk revenue cyclicality and enhance long-term free cash flow visibility versus purely product-driven models.
Negative Factors
Sequential Revenue Dependence on One-offs
Significant quarter-to-quarter swings tied to a litigation settlement highlight reliance on non-recurring items to boost results. This lumpy pattern reduces visibility into organic demand trends and can mask true product momentum, complicating investment and capacity planning over multi-quarter horizons.
Margin Compression from Under-Utilization
Under-absorption of fixed manufacturing costs when fabs run below capacity directly erodes margins. If demand remains uneven, persistent low utilization can pressure profitability until volumes recover or capacity is adjusted, making margins sensitive to cyclical swings in end markets.
Historical Operational and Cash Volatility
While recent profitability improved, a history of negative EBIT and variable FCF growth signals operational sensitivity to demand, pricing, and utilization. That volatility raises execution risk for multi-quarter strategic initiatives and could strain capital allocation during downturns.
Vicor (VICR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.99B
Dividend YieldN/A
Average Volume (3M)636.83K
Price to Earnings (P/E)77.2
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 Ratio-4.00
Price to Book (P/B)3.81
Price to Sales (P/S)6.04
P/FCF Ratio79.67
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue20.54
Enterprise Value/Gross Profit36.23
Enterprise Value/Ebitda84.02
Forecast
1Y Price Target
$185.00Price Target Upside-8.14% 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 profitability (TTM gross margin 51.78%, net margin 20.75%) and efficient cash conversion (operating cash flow to net income 1.90) support a high score. Low leverage (debt-to-equity 0.0117) adds balance-sheet strength, partially offset by historical volatility (prior-year negative EBIT and fluctuating free cash flow growth).Income Statement
Vicor's income statement shows strong profitability with a TTM gross profit margin of 51.78% and a net profit margin of 20.75%. The company has demonstrated consistent revenue growth, with a TTM revenue growth rate of 4.55%. The EBIT and EBITDA margins are healthy, indicating efficient operations. However, the previous year's EBIT was negative, which suggests some volatility in operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.0117, indicating minimal leverage. The return on equity (ROE) is strong at 13.78%, showcasing effective use of equity to generate profits. The equity ratio is robust, suggesting a stable capital structure. However, the slight increase in debt over the years could be monitored for future leverage risks.78
Positive
Cash Flow
Vicor's cash flow statement is strong, with a significant free cash flow growth rate of 20.95% TTM, indicating improved cash generation. The operating cash flow to net income ratio of 1.90 suggests efficient cash conversion. The free cash flow to net income ratio is high at 0.88, reflecting good cash profitability. However, historical fluctuations in free cash flow growth highlight potential volatility in cash management.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 441.60M | 359.06M | 405.06M | 399.08M | 359.36M | 296.58M |
| Gross Profit | 250.37M | 184.00M | 204.93M | 180.56M | 178.20M | 131.45M |
| EBITDA | 107.96M | 36.82M | 68.60M | 47.48M | 67.31M | 28.42M |
| Net Income | 82.28M | 6.13M | 53.59M | 25.45M | 56.63M | 17.91M |
Balance Sheet | ||||||
| Total Assets | 710.25M | 641.12M | 594.89M | 536.90M | 477.20M | 396.24M |
| Cash, Cash Equivalents and Short-Term Investments | 362.38M | 277.27M | 242.22M | 190.61M | 227.63M | 211.91M |
| Total Debt | 7.36M | 7.34M | 8.23M | 8.46M | 4.78M | 4.60M |
| Total Liabilities | 79.89M | 70.83M | 53.78M | 72.56M | 53.30M | 45.08M |
| Stockholders Equity | 630.08M | 570.07M | 540.87M | 464.09M | 423.60M | 350.82M |
Cash Flow | ||||||
| Free Cash Flow | 117.45M | 27.24M | 41.08M | -41.03M | 7.12M | 6.09M |
| Operating Cash Flow | 133.96M | 50.84M | 74.53M | 22.94M | 54.88M | 34.74M |
| Investing Cash Flow | -16.51M | -23.60M | -33.45M | -18.97M | -43.66M | -78.82M |
| Financing Cash Flow | -22.60M | 7.99M | 10.60M | 4.44M | 10.09M | 121.04M |
Vicor Technical Analysis
Positive
201.40
Price Trends
146.87
Positive
114.69
Positive
80.95
Positive
Market Momentum
13.21
Negative
71.73
Negative
95.13
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 201.4 is above the 20-day moving average (MA) of 167.47, above the 50-day MA of 146.87, and above the 200-day MA of 80.95, indicating a bullish trend. The MACD of 13.21 indicates Negative momentum. The RSI at 71.73 is Negative, neither overbought nor oversold. The STOCH value of 95.13 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.87B | 49.56 | 15.66% | 0.16% | 23.70% | 14.78% | |
76 Outperform | $2.87B | 45.73 | 16.40% | 0.15% | 23.70% | 14.78% | |
71 Outperform | $8.99B | 77.19 | 18.50% | ― | 11.55% | 1745.46% | |
68 Neutral | $4.70B | 32.34 | 18.33% | ― | 9.37% | 15.70% | |
68 Neutral | $1.92B | -32.24 | -5.34% | ― | -4.87% | -235.48% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $1.09B | 91,622.57 | 4.85% | ― | 10.76% | ― |
* Technology Sector Average
VICR
Vicor
201.40
140.78
232.23%
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OSIS
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ROG
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PENG
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20.78
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BELFA
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211.95
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165.54%
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.