Breaking Down NVE Corporation (NVEC) Financial Health: Key Insights for Investors

Are you an investor keeping a close watch on the financial health of NVE Corporation (NVEC)? With the latest fiscal year data available, it's time to delve into the key insights that can inform your investment decisions. Did you know that NVE Corporation's revenue for 2024 (TTM) stands at $25.68 million USD, reflecting a decrease from the $35.51 million USD in 2023? How does this revenue trend impact the overall financial stability, and what other factors should investors consider? Let's explore the details to understand the complete picture.

NVE Corporation (NVEC) Revenue Analysis

Understanding NVE Corporation's (NVEC) revenue streams involves examining the sources, growth, and segment contributions that drive the company's financial performance. NVE specializes in developing and manufacturing sensors and electronic components using spintronics technology.

Here’s a detailed breakdown:

• Breakdown of primary revenue sources (e.g., products, services, regions)

NVE's key revenue streams include:

• Sales from standard product lines
• Custom-designed solutions tailored to specific customer needs
• Licensing its spintronic technology

The company manufactures high-performance spintronic products, including sensors and couplers used to acquire and transmit data.

• Year-over-year revenue growth rate (historical trends, percentage increase/decrease)

NVE Corporation has experienced fluctuations in its revenue growth rate:

• In the fiscal year ending March 31, 2024, NVE Corporation had annual revenue of $29.80M, a decrease of -22.09%.
• The company's revenue in the last twelve months was $25.69M, down -27.68% year-over-year.
• Quarterly revenue for the quarter ending December 31, 2024, was $5.06M, a decrease of -25.06%.

Historical revenue growth rates:

• Last Year: -27.68%
• Last 3 Years: -25.67% per year
• Last 5 Years: +0.67% per year

NVE's revenue has generally grown slower than the semiconductor industry and the overall market.

NVE Corporation faces challenges in revenue, which may affect its overall profitability. In 2024, the overall industry faced challenges due to the economic slowdown and increased competition, resulting in a general decrease in total operating revenue.

• Contribution of different business segments to overall revenue

The company operates primarily in the spintronics nanotechnology sector, focusing on high-performance spintronic products. A significant portion of revenue comes from product sales, with additional contributions from contract research and development.

For example, in the first quarter of fiscal year 2025:

• Product sales decreased by 24%.
• Contract research and development revenue increased by 28%.

In the second quarter of fiscal year 2025:

• Product sales decreased by 14%.
• Contract research and development revenue increased by 3,950%.

• Analysis of any significant changes in revenue streams

Recent financial results indicate a challenging environment for NVE Corporation. The company reported a sharp 45% decrease in total revenue for the fourth quarter of fiscal 2024, which fell to $7.08 million from $12.8 million in the corresponding quarter of the previous year.

This decline was primarily due to:

• A 43% reduction in product sales
• An 88% decrease in contract research and development revenue

NVE Corporation is navigating a tough industry environment, as reflected in its revenue performance. Despite these challenges, NVE is committed to returning value to shareholders through consistent dividend payouts.

To gain more insights into NVE Corporation's core values, explore their Mission Statement, Vision, & Core Values of NVE Corporation (NVEC).

NVE Corporation (NVEC) Profitability Metrics

Analyzing NVE Corporation's (NVEC) profitability involves looking at several key metrics, including gross profit, operating profit, and net profit margins. These metrics provide insights into the company's efficiency in managing costs and generating profits.

Gross Profit Margin

In the fourth quarter of 2024, NVEC reported a gross margin of 84%, which is an increase from 80% in the previous year. This improvement was attributed to a more profitable product mix and a higher proportion of direct sales. For the full year 2024, NVEC's gross profit was $21.23 million, with a gross profit margin of 82.64%. This places NVEC in the top 10% of its industry for gross profit margin.

• A high gross profit margin indicates that NVEC is efficient in managing its cost of goods sold.
• The increase in gross margin suggests improved operational efficiency and pricing strategies.

Operating Profit Margin

NVE Corporation's operating margin as of February 2025 (TTM) is reported to be 70.82%. Examining the operating margin trend, there have been fluctuations over the years. For instance, in 2023, the operating margin was 70.82%, a 9.22% increase from the previous year. However, this metric has seen variations, reflecting changes in operational efficiency and cost management.

For the quarter ended December 31, 2024, the income from operations was $2.96 billion, a decrease of 33.8% from the prior-year period. Despite this decrease, the operating margin remains strong, indicating effective cost control relative to revenue.

Net Profit Margin

NVE's net profit margin for the trailing twelve months is 58.34%. This indicates that for every dollar of revenue, NVEC keeps approximately 58.34 cents as net income. The company's net profit margin has slightly improved by 1.38% from its 3-year average of 57.54%.

However, the net income for the quarter ended December 31, 2024, was $3.05 million, down from $4.18 million in the previous year. This decrease was primarily due to decreased revenue, increased operating expenses, and decreased interest income, partially offset by the increased gross profit margin.

A summary of NVEC's profitability metrics is shown below:

• Gross Profit Margin: 82.64%
• Operating Margin: 70.82% (TTM)
• Net Profit Margin: 58.34%

Trends in Profitability Over Time

Analyzing the trends in NVEC's profitability over time reveals a mixed performance. While the gross margin has generally improved, the operating and net profit margins have experienced some fluctuations. This can be attributed to various factors such as changes in revenue, operating expenses, and cost management strategies.

A table illustrating NVE Corporation's Operating Margin history from 2001 to 2023:

Comparison of Profitability Ratios with Industry Averages

When compared to the semiconductor industry, NVEC shows strong profitability. NVEC's net margin of 58.3% is notably higher than many of its competitors. The company's return on equity (ROE) is 23.8%, underscoring its efficiency in generating profit from shareholders' investments.

However, it is important to note that while NVEC's earnings have grown at an average annual rate of 8.9%, the semiconductor industry has seen higher earnings growth at 13.5% annually.

Analysis of Operational Efficiency

NVEC's operational efficiency can be assessed through its cost management and gross margin trends. The company's ability to maintain a high gross margin, even with fluctuating revenues, indicates effective cost control. The increase in R&D expenses to $0.9 million in the third quarter of fiscal 2025, from $0.5 million in the prior year, reflects investments in new technologies, which could drive future growth.

Despite a 25% decrease in revenue in Q4 2024, NVEC improved its gross margins to 84%, demonstrating strong operational efficiency. This was further supported by a more profitable product mix and a larger share of direct sales.

For more detailed insights, you can explore: Breaking Down NVE Corporation (NVEC) Financial Health: Key Insights for Investors

NVE Corporation (NVEC) Debt vs. Equity Structure

Understanding how NVE Corporation (NVEC) finances its operations and growth is crucial for investors. A key aspect of this involves analyzing the company's debt levels, its debt-to-equity ratio, and how it balances debt and equity funding. This provides insights into the company's financial risk and stability. For a broader view, check out: Exploring NVE Corporation (NVEC) Investor Profile: Who’s Buying and Why?

NVE Corporation primarily relies on equity rather than debt to fund its operations. As such, its debt levels are relatively low.

Here's a breakdown of NVE Corporation's debt and equity:

NVE Corporation's debt levels can be assessed through both short-term and long-term liabilities. Short-term debt includes obligations due within a year, while long-term debt consists of obligations extending beyond a year. Examining these components helps in understanding the company's immediate and future financial obligations.

The debt-to-equity ratio is a significant metric that indicates the proportion of debt and equity a company uses to finance its assets. It is calculated by dividing a company’s total liabilities by its shareholders’ equity. A high ratio suggests that a company relies more on debt, which can increase financial risk, while a low ratio indicates a greater reliance on equity, which is generally considered less risky.

NVE Corporation's debt-to-equity ratio is quite low, reflecting the company's preference for equity financing. According to the latest balance sheet data, NVE Corporation has total assets of $144.97 million and total liabilities of just $4.53 million. With total equity of $140.44 million, the debt-to-equity ratio is approximately 0.03, meaning debt is only 3% of equity. This indicates a very conservative approach to financial leverage.

Analyzing NVE Corporation's approach to balancing debt and equity reveals how the company manages its capital structure to support its strategic objectives. Here are key considerations:

• Financial Stability: A low debt-to-equity ratio provides financial stability, reducing vulnerability during economic downturns.
• Growth Strategy: The company seems to prefer funding growth through retained earnings and equity, minimizing financial risk.
• Investor Confidence: A strong equity base can boost investor confidence, as it demonstrates a lower risk profile.

NVE Corporation strategically maintains minimal debt, which aligns with its business model and growth strategy. The company’s strong reliance on equity not only ensures financial stability but also positions it favorably for long-term sustainability and growth.

NVE Corporation (NVEC) Liquidity and Solvency

Understanding a company's liquidity and solvency is crucial for investors. Liquidity refers to a company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Let's assess NVE Corporation (NVEC) through these lenses.

Assessing NVE Corporation's Liquidity:

Analyzing NVE Corporation's liquidity involves examining key financial ratios and working capital trends.

• Current and Quick Ratios: These ratios provide insights into NVE Corporation's ability to cover its short-term liabilities with its short-term assets.
• Analysis of Working Capital Trends: Monitoring the trend of NVE Corporation's working capital (current assets minus current liabilities) helps in understanding its operational efficiency and short-term financial health.

NVE Corporation's financial data for the fiscal year 2024 reveals the following:

These ratios suggest a strong liquidity position. A current ratio of 7.26 indicates that NVE Corporation has $7.26 of current assets for every $1 of current liabilities. Similarly, a quick ratio of 6.67 suggests that the company has $6.67 of liquid assets available to cover each $1 of current liabilities.

Cash Flow Statements Overview:

An overview of NVE Corporation's cash flow statements provides further insights into its liquidity. Key areas to examine include:

• Operating Cash Flow: Cash generated from NVE Corporation's core business activities.
• Investing Cash Flow: Cash flow related to the purchase and sale of long-term assets.
• Financing Cash Flow: Cash flow related to debt, equity, and dividends.

For the fiscal year 2024, NVE Corporation reported the following cash flow figures:

• Net cash provided by operating activities: $14.5 million
• Net cash used for investing activities: $1.34 million
• Net cash used for financing activities: $4.28 million

Potential Liquidity Concerns or Strengths:

Based on the data, NVE Corporation exhibits several liquidity strengths:

• Strong Current and Quick Ratios: High ratios indicate a robust ability to meet short-term obligations.
• Positive Operating Cash Flow: NVE Corporation's ability to generate cash from its operations supports its liquidity.

However, it's essential to monitor these trends and factors that could impact NVE Corporation's future liquidity:

• Changes in Working Capital: Significant fluctuations in accounts receivable, inventory, or accounts payable could affect liquidity.
• Future Capital Expenditures: Large investments in property, plant, and equipment could decrease cash reserves.

In summary, NVE Corporation demonstrates a strong liquidity position as of fiscal year 2024, supported by healthy financial ratios and positive operating cash flow.

NVE Corporation (NVEC) Valuation Analysis

Determining whether NVE Corporation (NVEC) is overvalued or undervalued requires analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield, payout ratios, and analyst consensus.

Currently, up-to-date specific valuation ratios such as P/E, P/B, and EV/EBITDA for NVE Corporation are not available as of April 2025. For comprehensive real-time data, investors should consult financial data providers such as Yahoo Finance, Bloomberg, or reputable financial analysis platforms.

Analyzing NVEC's stock price trends over the past 12 months (or longer) provides insights into market sentiment and investor confidence. Recent data indicates:

• On April 21, 2024, NVEC's stock closed at $84.15.
• The 52-week high was $98.69 on May 03, 2024, and the 52-week low was $66.78 on October 26, 2023.

Dividend yield and payout ratios are essential for assessing the attractiveness of NVEC to income-seeking investors. As of now, specific recent dividend information may need to be verified through official financial statements or filings.

Analyst consensus on NVEC's stock valuation offers a consolidated view of professional opinions. Recent ratings and price targets would provide insight into whether analysts recommend buying, holding, or selling the stock.

For additional insights into NVE Corporation and its investors, consider exploring: Exploring NVE Corporation (NVEC) Investor Profile: Who’s Buying and Why?

NVE Corporation (NVEC) Risk Factors

NVE Corporation faces a variety of risks that could significantly impact its financial health. These risks span internal operational challenges and external market forces, requiring careful management and strategic mitigation.

Industry Competition: The market for advanced sensor and data storage solutions is intensely competitive. NVE faces competition from larger, more established companies with greater resources, as well as smaller, specialized firms. This competition can put pressure on pricing, reduce market share, and impact profitability. To stay competitive, NVE must continuously innovate and protect its intellectual property.

Regulatory Changes: Changes in regulations related to technology, data privacy, or international trade could adversely affect NVE's operations. For example, new export restrictions or tariffs could limit the company's ability to sell its products in key markets or increase production costs. Compliance with evolving regulations requires ongoing investment in legal and regulatory affairs.

Market Conditions: Economic downturns, fluctuations in demand for specific products, or disruptions in supply chains can all impact NVE's financial performance. A decrease in capital spending by major customers, for instance, could lead to reduced orders and lower revenues. Monitoring market trends and diversifying its customer base are crucial for mitigating these risks.

Recent filings and earnings reports highlight several operational, financial, and strategic risks:

• Operational Risks: These include potential disruptions in manufacturing, quality control issues, and reliance on key suppliers. Any significant disruption could impact production timelines and increase costs.
• Financial Risks: NVE's financial risks involve managing cash flow, maintaining adequate liquidity, and dealing with fluctuations in interest rates and currency exchange rates. Prudent financial management is essential to navigate these challenges.
• Strategic Risks: Strategic risks encompass the need to adapt to technological changes, protect intellectual property, and manage the company's growth effectively. Failure to address these risks could undermine NVE's long-term competitive position.

Mitigation strategies and plans include:

• Diversification: Expanding into new markets and applications to reduce reliance on specific industries or customers.
• Innovation: Investing in research and development to stay ahead of technological advancements and maintain a competitive edge.
• Risk Management: Implementing robust risk management processes to identify, assess, and mitigate potential threats to the company's operations and financial performance.

For example, NVE's focus on spintronics technology and strategic partnerships are aimed at mitigating competitive and technological risks. Continuous monitoring of the risk landscape and proactive adaptation are vital for NVE to maintain its financial health and achieve sustainable growth. You can learn more about NVE's strategic direction at: Mission Statement, Vision, & Core Values of NVE Corporation (NVEC).

NVE Corporation (NVEC) Growth Opportunities

NVE Corporation's future growth hinges on several key factors, including product innovation, market expansion, and strategic partnerships. An analysis of these drivers, along with revenue growth projections and competitive advantages, provides insight into the company's potential trajectory.

Key growth drivers for NVE Corporation (NVEC) include:

• Product Innovations: NVE Corporation consistently invests in research and development to create cutting-edge spintronic products. These innovations often target niche markets with high-value applications.
• Market Expansion: While already present in several sectors, NVE Corporation can further expand its reach into emerging markets and industries that can benefit from its unique technology.
• Strategic Partnerships: Collaborations with other technology firms, research institutions, or key customers can accelerate product development, market access, and overall growth.

Predicting future revenue growth and earnings for a company like NVE Corporation requires a nuanced understanding of its specific market conditions and technological advancements. As of the fiscal year 2024, NVE Corporation reported total revenues of $35.1 million. Future growth prospects depend significantly on its ability to maintain its margins while scaling production and sales of new and existing products.

Strategic initiatives that may drive future growth for NVE Corporation include:

• R&D Investments: Continued investment in spintronic technology to develop new products and improve existing ones.
• Market Diversification: Expanding into new markets and applications for its products.
• Intellectual Property: Leveraging its strong patent portfolio to maintain a competitive edge and generate licensing revenue.

NVE Corporation possesses several competitive advantages that could position it for future growth:

• Technological Leadership: NVE Corporation's expertise in spintronics gives it a distinct advantage over competitors in certain applications.
• Strong Patent Portfolio: Its intellectual property provides a barrier to entry for potential competitors.
• Established Customer Relationships: Long-standing relationships with key customers provide a stable base for revenue generation and future growth.

For additional insights into NVE Corporation and its investors, explore Exploring NVE Corporation (NVEC) Investor Profile: Who’s Buying and Why?