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Frequency Electronics (FEIM)
:FEIM
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Frequency Electronics
(NASDAQ:FEIM)
77Outperform
Frequency Electronics (FEIM) vs. S&P 500 (SPY)
Market Cap
$152.11M
Dividend Yield6.15%
Average Volume (3M)56.91K
Price to Earnings (P/E)6.8
Beta (1Y)0.46
Revenue Growth24.10%
EPS Growth603.04%
CountryUS
Employees207
SectorTechnology
Sector Strength54
IndustryHardware & Equipment
Share Statistics
EPS (TTM)2.41
Shares Outstanding9,676,513
10 Day Avg. Volume81,522
30 Day Avg. Volume56,906
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)N/A
Price to Sales (P/S)4.63
Price to Cash Flow (P/CF)-10.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Frequency Electronics Business Overview & Revenue Model
Company DescriptionFrequency Electronics, Inc., together with its subsidiaries, designs, develops, manufactures, and sells precision time and frequency control products and components for microwave integrated circuit applications. It operates through two segments, FEI-NY and FEI-Zyfer. The FEI-NY segment offers precision time, frequency generation, and synchronization products and subsystems used in communication satellites, terrestrial cellular telephone, or other ground-based telecommunication stations; and other components and systems for the United States military. The FEI-Zyfer segment designs, develops, and manufactures products for precision navigation and timing primarily incorporating global positioning system technologies into radar systems, airborne SIGINT/COMINT platforms, information networks, test equipment, military command and control terminals, and satellite ground stations. The company's products are used in commercial, government satellites, secure communications, command, control, communication, computer, intelligence, security and reconnaissance, and electronic warfare applications for the United States government on land, sea, and air-borne platforms. It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia. Frequency Electronics, Inc. was founded in 1961 and is headquartered in Mitchel Field, New York.
How the Company Makes MoneyFrequency Electronics makes money primarily through the sale of its high-precision timing and frequency control products. The company's revenue model is based on manufacturing and supplying these specialized products to government and commercial entities that require precise time and frequency solutions, such as aerospace and defense contractors, telecommunication companies, and satellite operators. Key revenue streams include contracts with government agencies, such as the Department of Defense, as well as partnerships with major aerospace and defense firms. Additionally, Frequency Electronics generates income through research and development services, often funded by government grants or contracts, which further contribute to their earnings.
Frequency Electronics Financial Statement Overview
Summary
Frequency Electronics has shown solid financial performance with improvements in profitability, revenue growth, and cash flow generation. The company's low leverage and strong ROE highlight effective management and financial stability. While the balance sheet remains strong, careful monitoring of equity levels is advised. Overall, the company is well-positioned with favorable growth prospects and a healthy financial structure.Income Statement
The company has demonstrated significant improvements in profitability with a TTM gross profit margin of 39.4% and a net profit margin of 13.0%, indicating strong operational efficiency. The revenue growth rate of 8.9% compared to the previous period shows positive sales momentum. EBIT and EBITDA margins have also improved, highlighting enhanced cost management and profitability.85
Very Positive
Balance Sheet
The balance sheet shows a stable position with a debt-to-equity ratio of 0.15, indicating low financial leverage. The return on equity (ROE) of 21.7% demonstrates efficient use of equity to generate profits. The equity ratio of 46.5% suggests a healthy capital structure with adequate equity financing. However, a slight decrease in stockholders' equity compared to the previous year may warrant attention.75
Positive
Cash Flow
Cash flow analysis reveals strong free cash flow growth of 78.9%, indicating robust cash generation capabilities. The operating cash flow to net income ratio of 1.79 reflects strong cash earnings efficiency. The free cash flow to net income ratio of 1.65 further underscores the company's ability to generate cash from its operations.80
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 65.40M | 55.27M | 40.78M | 48.30M | 54.25M | 41.51M | Gross Profit |
| 28.88M | 18.58M | 7.85M | 8.60M | 16.92M | 5.79M | EBIT |
| 10.95M | 5.02M | -4.67M | -8.04M | -958.00K | -10.89M | EBITDA |
| 11.38M | 7.70M | -2.88M | -5.58M | 3.62M | -8.13M | Net Income Common Stockholders |
| 23.11M | 5.59M | -5.50M | -8.66M | 680.00K | -9.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.52M | 18.32M | 12.05M | 21.52M | 20.12M | 14.38M | Total Assets |
| 86.43M | 83.25M | 74.50M | 85.88M | 86.02M | 91.31M | Total Debt |
| 5.00M | 6.18M | 7.64M | 9.10M | 10.08M | 11.31M | Net Debt |
| -520.00K | -12.13M | 15.27M | -2.46M | 274.00K | 7.50M | Total Liabilities |
| 34.59M | 43.44M | 41.61M | 39.19M | 30.61M | 37.04M | Stockholders Equity |
| 51.84M | 39.82M | 32.89M | 46.69M | 55.41M | 54.27M |
| Cash Flow | Free Cash Flow | ||||
| 5.39M | 7.22M | 257.00K | 2.18M | 10.92M | -2.89M | Operating Cash Flow |
| 6.21M | 8.71M | 1.18M | 4.04M | 12.16M | -1.41M | Investing Cash Flow |
| -2.00M | -1.49M | 8.67M | -2.28M | -1.19M | -3.43M | Financing Cash Flow |
| -9.94M | 0.00 | -9.35M | 0.00 | -4.96M | 4.96M |
Frequency Electronics Technical Analysis
Neutral
15.72
Price Trends
16.32
Negative
15.81
Negative
13.63
Positive
Market Momentum
0.01
Negative
49.39
Neutral
39.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FEIM, the sentiment is Neutral. The current price of 15.72 is above the 20-day moving average (MA) of 15.35, below the 50-day MA of 16.32, and above the 200-day MA of 13.63, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 49.39 is Neutral, neither overbought nor oversold. The STOCH value of 39.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FEIM.
Frequency Electronics Risk Analysis
Frequency Electronics disclosed 18 risk factors in its most recent earnings report. Frequency Electronics 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 0 New Risks
Frequency Electronics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $39.90B | 26.99 | 7.85% | 2.18% | 9.82% | 22.33% | |
77 Outperform | $152.11M | 6.75 | 52.23% | 6.15% | 24.10% | 603.04% | |
71 Outperform | $3.22B | 30.81 | 15.40% | 1.90% | 5.05% | 632.38% | |
59 Neutral | $3.56B | 107.78 | 3.94% | ― | 5.21% | ― | |
59 Neutral | $5.04B | 294.70 | 1.40% | ― | 9.57% | ― | |
58 Neutral | $21.97B | 10.63 | -18.43% | 2.40% | 4.67% | -24.47% | |
54 Neutral | $1.49B | ― | -8.49% | ― | 19.02% | 76.67% |
* Technology Sector Average
Performance Comparison
FEIM
Frequency Electronics
15.75
5.70
56.72%
AVAV
AeroVironment
123.59
-29.69
-19.37%
LHX
L3Harris Technologies
212.70
3.88
1.86%
IRDM
Iridium Communications
29.48
3.84
14.98%
KTOS
Kratos Defense
31.47
13.09
71.22%
VSAT
ViaSat
11.47
-6.62
-36.59%
Frequency Electronics Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: 11.81% | Next Earnings Date: Jul 17, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment with record-breaking revenue and significant net income growth, driven by strong performance in space programs. Despite some challenges such as a decline in non-space government revenue and a decrease in the backlog, the company's strategic positioning in high-growth markets like proliferated satellites and quantum sensing indicates a positive trajectory.Highlights
Record Revenue Growth
Consolidated revenue for the nine months ended January 31, 2025, was $49.8 million, a significant increase from $39.7 million for the same period of the prior fiscal year. This marks the highest revenue quarter for the company in 10 years.
Increase in Operating Income
Operating income for the nine months ending January 31, 2025, was $8.5 million compared to $2.5 million in the prior year, driven by the completion of major milestones in a large space program.
Strong Net Income Growth
Consolidated net income for the nine months ending January 31, 2025, was $20.5 million or $2.18 per share compared to $3 million or $0.32 per share in the previous fiscal year.
Significant Tax Benefit
The company recorded an income tax benefit of $11.6 million for the nine months ending January 31, 2025, including a discrete tax benefit of $11.9 million.
Growing Strategic Importance
The company has increased its strategic importance in larger addressable markets such as proliferated satellites and quantum sensing, which is expected to drive future revenue and profitability.
Lowlights
Decline in Non-Space Government Revenue
Revenues from non-space U.S. government and DoD customers decreased to $19.5 million from $21.1 million in the same period of the prior fiscal year.
Decrease in Fully-Funded Backlog
The fully-funded backlog at the end of January 2025 was approximately $73 million, down from approximately $78 million at the previous fiscal year end.
Cash Position Decrease
Cash decreased by approximately $12.8 million since year-end, with the dividend paid in Q2 accounting for approximately $9.6 million of this decrease.
Company Guidance
During the Frequency Electronics' Third Quarter Fiscal 2025 Earnings Release Conference Call, CEO Thomas McClelland highlighted significant growth in revenue, gross margin, and operating income for the quarter and year-to-date, marking the highest revenue quarter for the company in a decade. Revenue from commercial and U.S. government satellite programs rose to $28.8 million, accounting for 58% of consolidated revenue, while non-space U.S. government and DoD customer revenue decreased to $19.5 million, representing 39% of consolidated revenue. R&D expenses increased to $4.5 million, reflecting a focus on product modernization. Operating income improved to $8.5 million, up from $2.5 million in the previous year, driven by successful completion of large space programs. The company reported a consolidated net income of $20.5 million or $2.18 per share, and a strong balance sheet with a working capital of $27 million and a current ratio of 2.2:1. The fully-funded backlog stood at $73 million. CFO Steve Bernstein noted a decrease in contract liabilities by $7.4 million quarter-over-quarter, while emphasizing the company's debt-free status and adequate liquidity to meet future operational needs.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.