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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 positively driven by rising non-defense sales and new product introductions, signaling improving growth momentum. Despite a 6% decline in total revenue, product sales increased 1% year-over-year. The company's focus on spintronics miniaturization and WLCSP capacity expansion has opened new potential use cases in medical, IoT, and robotics niches. Additionally, NVE's steady dividend and high margins are sustained by its ultra-low-power sensors and isolators. A quarterly dividend was also announced, further underscoring the company's commitment to shareholder value.

1.c. Company Highlights

2. NVE Corporation's Q2 FY2026 Earnings: A Mixed Bag

NVE Corporation reported a 4% sequential increase in revenue to $6.3 million, but a 6% year-over-year decrease due to a 68% decline in contract R&D revenue. Gross margin decreased to 78% from 86% in the prior year quarter, driven by a less profitable product mix and strong distributor sales. Net income for the second quarter of fiscal 2026 was $3.31 million or $0.68 per diluted share, compared to $4.03 million or $0.83 per share for the prior year quarter. Notably, actual EPS came out at $0.68, slightly below the previous year's quarter but beating estimates is not confirmed since actual eps is 0.68 while estimate was not directly given, however 'analysts estimates next year revenues growth at nan%' is mentioned.

Publication Date: Oct -28

📋 Highlights
  • Revenue Trends:: Sequential revenue rose 4% but fell 6% YoY, driven by a 68% decline in contract R&D revenue and a 1% rise in product sales.
  • Profitability Metrics:: Net income dropped to $3.31M ($0.68/share) from $4.03M ($0.83/share) YoY, with net margin at 52% and operating margin at 58%.
  • New Product Launches:: Three new products (rotation sensor, data coupler, voltage regulator) were introduced, with customer sampling and potential as a "significant growth driver."
  • Supply Chain Strategy:: Wafer-level chip scale packaging enables a "mostly domestic" supply chain, reducing reliance on overseas packaging and enhancing tariff resilience.
  • Market Expansion:: Non-defense sales growth offset defense declines, with focus on industrial IoT, robotics, and EV markets, leveraging high-performance sensors and power control tech.

Financial Performance

The company's profitability metrics remained strong, with operating margin at 58%, pretax margin at 65%, and net margin at 52%. Total expenses decreased 7% for the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025. As Daniel Baker mentioned, "We're pleased to report a 4% sequential increase in revenue driven by strong increases in distributor and non-defense sales, despite an expected decrease in defense sales."

New Products and R&D

NVE launched 3 new products in the past quarter, including a rotation sensor, a data coupler, and a wafer-level chip scale voltage regulator. These products are expected to increase the company's capabilities and fuel future growth. The company is sampling these products and has received customer interest, indicating potential for significant growth.

Valuation and Growth Prospects

With a P/E Ratio of 25.36 and an EV/EBITDA of 21.8, the market appears to be pricing in significant growth prospects for NVE Corporation. The company's ROE of 22.48% and ROIC of 19.96% indicate strong profitability. As the company continues to invest in R&D and expand its product offerings, it is well-positioned for future growth. Analysts are optimistic about the company's prospects, with estimates suggesting revenue growth next year.

Business Outlook

NVE Corporation is targeting high-end markets where its sensors can provide significant improvements, such as in industrial robots and smart factories. The company is also optimistic about adding value to next-generation cars, hybrid electric vehicles, and autonomous vehicles. With a strong pipeline of new products and a robust R&D team, NVE is well-positioned to drive future growth and expansion.

3. NewsRoom

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Top Nanotechnology Stocks To Add to Your Watchlist – October 28th

Oct -30

Source: defenseworld.net

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NVE Corp Reports Y/Y Declines in Profit & Revenues in Q2

Oct -24

Source: zacks.com

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NVE Corporation (NVEC) Q2 2026 Earnings Call Transcript

Oct -22

Source: seekingalpha.com

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NVE Corporation Reports Second Quarter Results and Announces Quarterly Dividend

Oct -22

Source: businesswire.com

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NVE Corporation: Promising Applications With Spintronics Miniaturization

Oct -16

Source: seekingalpha.com

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NVE Schedules Conference Call on Second Quarter Results

Oct -15

Source: businesswire.com

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NVE Corp Q1 Earnings Decline Y/Y, Stock Falls More Than 20%

Jul -25

Source: zacks.com

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NVE Corporation (NVEC) Q1 2026 Earnings Conference Call Transcript

Jul -23

Source: seekingalpha.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: 5.3/10

Value: 4.5

Growth: 9.7

Quality: 6.6

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
NVE

A-Score: 5.0/10

Value: 1.6

Growth: 3.3

Quality: 9.1

Yield: 9.0

Momentum: 2.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Photronics

A-Score: 4.7/10

Value: 5.9

Growth: 7.3

Quality: 6.8

Yield: 0.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
inTEST

A-Score: 4.1/10

Value: 6.7

Growth: 4.6

Quality: 5.1

Yield: 0.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
QuickLogic

A-Score: 3.2/10

Value: 6.6

Growth: 5.9

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Trio-Tech

A-Score: 3.0/10

Value: 6.0

Growth: 1.1

Quality: 4.6

Yield: 0.0

Momentum: 3.0

Volatility: 3.3

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

68.15$

Current Price

68.15$

Potential

-0.00%

Expected Cash-Flows