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1. Company Snapshot

1.a. Company Description

NN, Inc., a diversified industrial company, designs, manufactures, and sells high-precision components and assemblies.It operates through two segments, Mobile Solutions and Power Solutions.The Mobile Solutions segment manufactures and sells system critical components for general industrial and automotive end markets.


This segments products are used in power steering, braking, transmissions, gasoline fuel system, diesel injection, and diesel emissions treatment applications, as well as use in heating, ventilation, and air conditioning.The Power Solutions segment designs, manufactures, and sells a range of high-precision metal and plastic components, assemblies, and finished devices used in various applications, such as power control, flight control, and military devices.Its products include electrical contacts, connectors, contact assemblies, and precision stampings for the electrical, general industrial, automotive, aerospace, defense, and medical end markets.


This segment also produces various tools and instruments for the orthopaedics and medical/surgical end markets.NN, Inc.was founded in 1980 and is headquartered in Charlotte, North Carolina.

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1.b. Last Insights on NNBR

NN, Inc.'s recent performance was negatively impacted by a lack of significant earnings surprises, despite a strong new business wins program. The company's Q1 2025 earnings call transcript revealed a cautious tone, with management reaffirming its full-year adjusted EBITDA outlook but failing to provide a clear path for accelerating growth. Additionally, the recent refinancing program, which provided a $128 million term loan facility, may have increased debt levels, potentially constraining the company's financial flexibility.

1.c. Company Highlights

2. Earnings Report Analysis: NN, Inc.

The company's financial performance for the fourth quarter showed a revenue of $422.2 million, a decline of $42.1 million from the previous year. The adjusted EBITDA was $12.9 million, an increase from $12.1 million in the prior year, representing a year-over-year growth of 6.6%. The adjusted EBITDA margin expanded by 90 basis points to 12.3% of net sales. The company's EPS was -$0.25362, missing estimates of $0.02. The Power Solutions segment saw an increase in net sales, driven by new business wins and higher precious metals pass-through pricing.

Publication Date: Mar -09

📋 Highlights
  • Adjusted EBITDA Growth: Full-year 2025 adjusted EBITDA reached $12.9 million, up 7.4% YoY, with margins expanding 90 basis points to 12.3%.
  • New Business Wins: Secured $4.07 billion in new contracts in 2025, exceeding targets, with a $800 million high-quality pipeline for 2026.
  • 2026 Revenue Outlook: Guiding $445–$465 million in sales, driven by 100+ program launches and 5–7% growth in defense and data center markets.
  • Segment Performance: Power Solutions segment grew sales 5.3% YoY to $178.6 million, with EBITDA up 10.8% to $30.7 million (17.2% margin).
  • Margin Expansion: Mobile Solutions EBITDA margin expanded 70 bps to 13.7% in 2025 despite 9.3% sales decline, driven by cost discipline.

Segment Performance

The Power Solutions segment reported net sales of $178.6 million, a 5.3% increase from the previous year. Adjusted EBITDA improved by 10.8% to $30.7 million, with a 90 basis-point expansion in EBITDA margins. The segment won $13.2 million in new business awards, focusing on key target growth markets. The Mobile Solutions segment saw a decline in net sales, but still reported an expansion in adjusted EBITDA margins to 13.7%, driven by cost savings and lower operating costs.

New Business Wins and Outlook

The company reported new business wins of over $200 million in the trailing three years, with a significant pipeline of opportunities. The average gross margin on these wins is 27%, concentrated in strategic markets where the company sees long-term value. The company is guiding to net sales growth of $445 million to $465 million in 2026, with a focus on new program launches and strengthening of end markets. Analysts estimate next year's revenue growth at 5.4%.

Valuation Metrics

The company's valuation metrics indicate a 'P/E Ratio' of -1.98, 'P/S Ratio' of 0.16, and an 'EV/EBITDA' of 15.09. The 'ROE (%)' is -25.53, and 'ROIC (%)' is -4.94, indicating potential areas for improvement. The 'Net Debt / EBITDA' ratio is 11.24, suggesting a significant debt burden. The 'Free Cash Flow Yield (%)' is negative, indicating that the company's cash flow is not sufficient to support its current valuation.

Growth Prospects

The company is expecting growth in its key markets, driven by the increasing demand for data centers and defense electronics. The company is also investing in new capacity to support future growth, with a doubling of its capital spending to around $20-$30 million. The increased spending is expected to benefit 2027, as the company says yes to more programs and invests in new capacity to support future growth.

3. NewsRoom

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Preliminary Q1 2026 Net Sales Expected to Exceed Annual Guidance Run-rate

Apr -14

Source: globenewswire.com

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NN (NASDAQ:NNBR) Stock Crosses Above 200 Day Moving Average – Should You Sell?

Apr -07

Source: defenseworld.net

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Financial Comparison: Highway (NASDAQ:HIHO) vs. NN (NASDAQ:NNBR)

Apr -02

Source: defenseworld.net

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NN Announces Acquisition to Further Growth in Electric Grid and Data Center

Mar -27

Source: globenewswire.com

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NN (NASDAQ:NNBR) Share Price Passes Above 200-Day Moving Average – What’s Next?

Mar -21

Source: defenseworld.net

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NN, Inc. Provides Update on Business Growth in the Data Center, AI Reasoning, and Cloud Computing Markets

Mar -18

Source: globenewswire.com

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NN, Inc. (NNBR) Q4 2025 Earnings Call Transcript

Mar -05

Source: seekingalpha.com

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NN Inc. (NNBR) Reports Break-Even Earnings for Q4

Mar -04

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.76%)

6. Segments

Mobile Solutions

Expected Growth: 3%

NN, Inc.'s Mobile Solutions segment growth is driven by increasing demand for 5G-enabled devices, rising adoption of IoT devices, and growing need for miniaturization and precision engineering in mobile devices. Additionally, the company's strategic acquisitions and investments in emerging technologies, such as 5G and artificial intelligence, are expected to fuel growth.

Power Solutions

Expected Growth: 5%

Power Solutions from NN, Inc. is driven by increasing demand for electric vehicles, renewable energy, and energy storage systems. The segment benefits from its diversified customer base, including major automotive and industrial companies. Additionally, NN's focus on innovation, quality, and customer service enables it to capitalize on the growing need for efficient power solutions.

Intersegment Sales Eliminations

Expected Growth: 2%

NN, Inc.'s 2% growth in Intersegment Sales Eliminations is driven by increasing demand for precision bearings and engineered components in the automotive and industrial end-markets, coupled with the company's strategic acquisitions and operational efficiency initiatives.

7. Detailed Products

Precision Engineered Products

Customized precision components and assemblies for the aerospace, defense, industrial, and medical markets

Autocam Precision Components

High-precision, complex components and assemblies for the automotive, industrial, and aerospace markets

Metal Bearing Products

Bearings, bushings, and other metal bearing products for the aerospace, defense, industrial, and automotive markets

Electrical Products

Electrical connectors, contacts, and other electrical components for the aerospace, defense, industrial, and automotive markets

Plastic and Metal Injection Molding

Customized plastic and metal injection molding services for the aerospace, defense, industrial, and automotive markets

8. NN, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for NN, Inc. is medium due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of customers in the aerospace and industrial end-markets.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's diversified supplier base and lack of dependence on a single supplier.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the precision bearing and metal processing industries.

Intensity Of Rivalry

The intensity of rivalry is medium due to the presence of several established players in the market, but the company's diversified product portfolio and strong customer relationships mitigate the competitive pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.26%
Debt Cost 10.94%
Equity Weight 55.74%
Equity Cost 19.12%
WACC 15.50%
Leverage 79.42%

11. Quality Control: NN, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Quality: 4.2

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A-Score: 2.6/10

Value: 8.3

Growth: 1.6

Quality: 2.1

Yield: 0.0

Momentum: 1.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.32$

Current Price

2.32$

Potential

-0.00%

Expected Cash-Flows