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1. Company Snapshot

1.a. Company Description

NVE Corporation develops and sells devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information in the United States and internationally.The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data.Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position or speed primarily for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches.


The company also offers spintronic couplers for industrial Internet of Things market.In addition, it undertakes contracts for research and development, and licensing of spintronic magnetoresistive random access memory technology.NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.

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1.b. Last Insights on NVEC

NVE Corporation's recent performance was negatively impacted by a 6% decline in total revenue, primarily due to a 68% decrease in contract research and development revenue. However, product sales increased by 1%. The company's net income decreased by 18% to $3.31 million. Despite these challenges, rising non-defense sales and new products signal improving growth momentum. The company plans to release its third-quarter financial results on January 21, 2026. According to MarketBeat, NVE is among the top nanotechnology stocks to watch.

1.c. Company Highlights

2. NVE Corporation Delivers Strong Q3 FY2026 Results

NVE Corporation reported a robust 23% increase in revenue and an 11% increase in earnings for the third quarter of fiscal 2026 compared to the prior year quarter. Revenue was driven by a 16% increase in product sales and a 335% increase in contract R&D revenue. Gross margin for the quarter was 79% of revenue, down from 84% in the prior year quarter, due to a less profitable product mix and increased distributor sales. Earnings per diluted share came in at $0.70, slightly below the actual EPS of $0.78 reported, but above the estimated $0.63. Operating expenses decreased 12% due to a 9% decrease in R&D expense and a 19% decrease in SG&A.

Publication Date: Jan -23

📋 Highlights
  • Revenue & Earnings Growth:: 23% revenue increase ($3.38M net income) and 11% earnings growth driven by 16% product sales rise and 335% contract R&D surge.
  • Gross Margin Decline:: Dropped to 79% from 84% YoY due to less profitable product mix and higher distributor sales.
  • Operating Efficiency:: 12% operating expenses reduction, led by 9% R&D and 19% SG&A cost cuts.
  • Strategic Investments:: $2.18M in fixed asset purchases, including new spintronic equipment expected to activate by March 31.
  • Medical & IoT Expansion:: Launched 0.65mm² wafer-level sensors, extended Abbott partnership for 2026-2027 pricing, and targeted IoT/AI markets with MRAM IP licensing.

Operational Highlights

The company completed the installation and calibration of a new equipment cluster in the past quarter, allowing for precise control of spintronic materials deposition. The new equipment is expected to be put into service by March 31. NVE also announced a new wafer-level chip scale sensor, a part that's just 0.65 millimeter square. The company executed an extension to its supplier partnering agreement with Abbott Laboratories, providing for price increases for 2026 and 2027.

Cash Flow and Balance Sheet

The company had $12.2 million in cash flow from operations in the first 9 months of the fiscal year. Accounts receivable decreased $1.1 million, and inventories decreased by $177,000. The company expects accelerated deductions of previously unamortized research and development expenses to reduce its cash taxes for the full fiscal year ending March 31, 2026, by approximately $1.1 million. Fixed asset purchases were $2.18 million for the first 9 months of the fiscal year.

Growth Prospects and Valuation

NVE Corporation's strong revenue growth and earnings increase were driven by broad-based growth across its product lines. With a current P/E Ratio of 26.2 and P/S Ratio of 14.3, the market has already priced in significant growth expectations. The company's ROIC of 21.26% and ROE of 23.47% indicate a strong ability to generate returns on invested capital and equity. As the company continues to invest in R&D and expand its product offerings, it is well-positioned to capitalize on emerging markets such as the Internet of Things and artificial intelligence.

MRAM and Emerging Markets

Regarding MRAM, the company specializes in high-value-added memories for specialized applications and plans to participate in the market by licensing intellectual property. The new capacity is targeted at emerging markets, which require ubiquitous sensors. The company sees this as a historic opportunity and made a large investment to capitalize on it, expecting to add customers and products to drive growth.

3. NewsRoom

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NVEC vs. AOSL: Which Small-Cap Chip Stock Is the Better Buy?

Feb -10

Source: zacks.com

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Market Today: Palantir beats, Disney warns; oil slides

Feb -02

Source: gurufocus.com

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First Look: Gold Slumps, Disney (DIS) Beats, Oracle (ORCL) Plans $50B

Feb -02

Source: gurufocus.com

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NVEC's Q3 Earnings Rise 11% Y/Y, Highlight Growth Momentum

Jan -26

Source: zacks.com

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NVE Q3 Earnings Call Highlights

Jan -23

Source: defenseworld.net

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Why NVE Corporation Popped Today

Jan -22

Source: fool.com

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NVE Corporation (NVEC) Q3 2026 Earnings Call Transcript

Jan -22

Source: seekingalpha.com

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NVE Corporation Reports Third Quarter Results and Announces Quarterly Dividend

Jan -21

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.13%)

6. Segments

Spintronics

Expected Growth: 8%

NVE Corporation's Spintronics segment growth is driven by increasing demand for high-performance, low-power magnetic sensors in industrial, medical, and consumer electronics. Advancements in IoT, autonomous vehicles, and smart infrastructure also fuel growth. Additionally, NVE's proprietary spintronic technology and strategic partnerships contribute to its market leadership and growth.

Contract Research and Development

Expected Growth: 12%

NVE Corporation's 12% growth in Contract Research and Development is driven by increasing demand for outsourced R&D services, advancements in biotechnology and pharmaceutical industries, and strategic partnerships. Additionally, growing need for cost-effective and efficient research solutions, coupled with NVE's expertise in nanotechnology and magnetics, contributes to the segment's growth.

7. Detailed Products

Magnetoresistive Random Access Memory (MRAM)

A type of non-volatile random-access memory that stores data in magnetic fields, providing high-speed and low-power consumption

Spin-Transfer Torque Magnetoresistive Random Access Memory (STT-MRAM)

A type of MRAM that uses spin-transfer torque to switch the magnetic orientation of the memory cells, enabling faster write speeds and lower power consumption

Toggle Magnetoresistive Random Access Memory (Toggle MRAM)

A type of MRAM that uses a toggle switching mechanism to store data, providing high-reliability and low-power consumption

Magnetic Sensors

A type of sensor that detects changes in magnetic fields, used in applications such as navigation, position sensing, and current sensing

Isolators

A type of component that provides electrical isolation between two circuits, used in applications such as industrial control systems and medical devices

8. NVE Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

NVE Corporation operates in the technology industry, which is characterized by rapid innovation and advancements. While there are substitutes available, the company's focus on innovation and R&D helps it to stay ahead of the competition.

Bargaining Power Of Customers

NVE Corporation's customers are primarily businesses and organizations, which have limited bargaining power due to the company's specialized products and services.

Bargaining Power Of Suppliers

NVE Corporation relies on a few key suppliers for its components and materials. While the company has some bargaining power, the suppliers also have some leverage due to the specialized nature of the products.

Threat Of New Entrants

The technology industry is characterized by low barriers to entry, and new entrants can easily disrupt the market. NVE Corporation needs to continuously innovate and invest in R&D to stay ahead of new competitors.

Intensity Of Rivalry

The technology industry is highly competitive, and NVE Corporation faces intense rivalry from established players and new entrants. The company needs to focus on differentiating its products and services to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.54%
Debt Cost 3.95%
Equity Weight 99.46%
Equity Cost 9.89%
WACC 9.86%
Leverage 0.54%

11. Quality Control: NVE Corporation passed 7 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

Stock-Card
ACM Research

A-Score: 5.7/10

Value: 6.3

Growth: 9.7

Quality: 6.5

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
NVE

A-Score: 5.3/10

Value: 1.9

Growth: 3.2

Quality: 9.1

Yield: 10.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
inTEST

A-Score: 4.3/10

Value: 7.1

Growth: 4.4

Quality: 5.0

Yield: 0.0

Momentum: 6.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Photronics

A-Score: 4.1/10

Value: 5.5

Growth: 6.0

Quality: 7.1

Yield: 0.0

Momentum: 3.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Trio-Tech

A-Score: 3.7/10

Value: 3.9

Growth: 1.7

Quality: 5.2

Yield: 0.0

Momentum: 8.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
QuickLogic

A-Score: 3.4/10

Value: 6.6

Growth: 5.9

Quality: 4.1

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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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

66.72$

Current Price

66.72$

Potential

-0.00%

Expected Cash-Flows