NVE Corp Gains After Posting Y/Y Earnings Rise in Q4, Eyes FY26 Growth

12.05.25 19:20 Uhr

Shares of NVE Corporation NVEC have gained 11.5% since reporting results for the fourth quarter of fiscal 2025. This compares with the S&P 500 index’s 0.5% rise over the same time frame. Over the past month, however, the stock has declined 6.5% against the S&P 500’s 9.7% rally, underperforming the broader market despite short-term post-earnings momentum.Q4 Performance: Marginal Growth Amid Sequential ReboundNVEC posted fiscal fourth-quarter revenues of $7.27 million, a 3% year-over-year increase from $7.08 million. This uptick was driven by a 558% upsurge in contract research and development revenues to $318,000 from just $48,000 in the prior-year quarter. However, product sales dipped 1% to $6.95 million.Earnings per diluted share inched up 1.3% to 80 cents from 79 cents in the prior-year quarter. Net income rose slightly to $3.89 million from $3.81 million in the fourth quarter of fiscal 2024. The gross margin improved to 79% from 76%, attributable to a more profitable product mix and a shift toward direct sales over distributor channels.NVE Corporation Price, Consensus and EPS Surprise  NVE Corporation price-consensus-eps-surprise-chart | NVE Corporation QuoteOperating Metrics & Profitability HighlightsOperating income for the quarter increased to $4.25 million from $4.06 million a year ago. Despite increased R&D spending, the operating margin remained robust at 58%. The pre-tax margin stood at 65% and the net margin was at 54%, underscoring continued profitability. R&D expenses jumped 28% year over year, reflecting a strategic focus on innovation, while SG&A expenses declined 2%, supporting overall cost discipline.For the fiscal year, revenues fell 13% to $25.87 million due to declines in the first three quarters. Nonetheless, the gross margin for the year rose to 84% from 77% in fiscal 2024. Net income declined 12% to $15.1 million, or $3.11 per diluted share, from $17.1 million, or $3.54 per share, in the prior year. Total annual expenses rose 25%, driven by a 33% increase in R&D and 13% growth in SG&A costs.Management Commentary: Confident in Growth ProspectsCEO Dan Baker highlighted the strength and sustainability of the quarter’s revenue performance, citing both replenishment in customer channels and demand for products. He described the quarter’s revenues as a combination of channel restocking and new business from recent product introductions. Management remains confident that recent investments in R&D and capacity expansion will yield returns in future quarters.The company highlighted expanding interest in recently launched omnidirectional magnetic sensors, which cater to industrial automation and medical device markets. Baker noted that these devices offer higher accuracy, smaller sizes and lower power consumption, enhancing NVEC’s competitive positioning in key verticals.Drivers Behind Financial ResultsThe sequential 44% increase in revenues from the prior quarter was attributed to a 40% rise in product sales and a 210% surge in contract R&D revenues, signaling a recovery in customer demand and favorable end-market conditions. Improvements in the gross margin reflected a shift toward higher-margin products and increased direct sales.Management pointed to stable manufacturing operations and adequate inventory levels as risk mitigants amid ongoing tariff and supply-chain concerns. The company’s unique tariff position — exemptions in major export markets and domestic production capabilities — contributed to operational stability.Capital Expenditure & Forward-Looking GuidanceNVEC plans to increase capital spending significantly in fiscal 2026, with projected fixed asset investments between $2 million and $3 million. This compares with $1.26 million in fiscal 2025, which was higher than historical norms. The primary allocation is toward a new cluster of wafer fabrication equipment, expected to arrive in the September-end quarter. Management expressed optimism about the return on this investment, citing strong customer feedback on prototypes and expectations for market expansion.Other DevelopmentsIn the quarter, NVE Corp extended its supplier agreement with Abbott Laboratories, a key customer in the implantable medical device sector. The amended agreement reinforces NVE’s position as a long-term partner.In summary, NVEC closed fiscal 2025 on a relatively positive note, showing sequential recovery and sustained profitability. While full-year results reflected broader industry softness, the fiscal fourth quarter suggested early signs of a rebound, supported by product innovation, operational resilience and strategic investments.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVE Corporation (NVEC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks

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