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NVEC

NVE NasdaqCM:NVEC Stock Report

Last Price

US$47.76

Market Cap

US$230.7m

7D

0.7%

1Y

-25.0%

Updated

03 Oct, 2022

Data

Company Financials
NVEC fundamental analysis
Snowflake Score
Valuation1/6
Future Growth0/6
Past Performance4/6
Financial Health5/6
Dividends2/6

NVEC Stock Overview

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.

NVE Competitors

Price History & Performance

Summary of all time highs, changes and price drops for NVE
Historical stock prices
Current Share PriceUS$47.76
52 Week HighUS$75.50
52 Week LowUS$43.35
Beta1.16
1 Month Change-1.49%
3 Month Change5.85%
1 Year Change-25.04%
3 Year Change-24.44%
5 Year Change-41.11%
Change since IPO336.66%

Recent News & Updates

Sep 09

NVE Corp.: Low Growth, But Highly Profitable And Has The Cash To Pay Dividends

Summary NVE Corp. uses spintronic technology to make some of the world's smallest sensors to fit in the tiniest medical or industrial robots. On the other end of the spectrum, its profitability and cash flow metrics are higher than the median for the IT sector. I assess prospects for revenue growth in light of supply chain constraints and low Capex spent as a percentage of sales. I also elaborate on those enticing dividend yields. The stock is a buy in view of the tightening of monetary policy. In my quest to look for companies that are better positioned to navigate through the period of acute tightening of monetary policy period which lies ahead, I came across NVE Corporation (NVEC). As seen in the table below, it has profitability metrics that, in some cases are superior to the median for the IT sector by more than 1000% as well as good free cash flow margins. Profitability and Cash Metrics (www.seekingalpha.com) On the other hand, its Capex to Sales ratio which is the percentage of revenue spent on capital expense is lower than the sector median implying that it may not be investing sufficiently for growth. In this respect, I noted that revenue growth has decelerated in Q1-2023 (which ended in June 2022) to 2.56% compared to 14.6% in the March quarter. Thus, in addition to shedding some light on growth, this thesis also aims to assess the ability of the company at sustaining its profitability. I start by providing some insights as to what differentiates NVEC as a semiconductor play. Spintronics Vs Electronics Most of you will have already been across the word electronics which is all about using the ability of electrons to charge and discharge rapidly in order to transport data in computers. Instead, spintronics, which is also known as magneto electronics uses the spin of the electron and the associated magnetic field it creates to transfer data. Now, the fact that this can be done in solid-state devices makes spintronics perfect for applications like sensors and couplers in robots and the Internet of Things (IoT). The company also manufactures some of the highest quality sensors used in MRI machines and pacemakers. These devices are available in semiconductor format and are more stable (nonvolatile) with respect to charge-based electronics. With so many qualities, it is not surprising to see other companies commercializing related products, with prominent industry plays like Intel (NASDAQ:INTC) and International Business Machines (IBM) collaborating with academia for research purposes. Here, one key factor which explains NVEC's high profitability is that, in addition to selling products, it also performs contract research, a segment that saw a 32% revenue increase in Q1-2023 (Q1) compared to last year. In comparison product sales increased by only 3%, but still accounted for 96.4% of total revenues. The reason for this is just like many other industry peers, the company's operations were impacted by supply chain shortages as from the second quarter of 2021, with gross margins falling to 75% for the June 2021 quarter as shown in the table below. Quarterly revenues (www.seekingalpha.com) There have been signs of improvement as per the management during Q1's earnings call. Noteworthily, gross margins have been increasing steadily and should improve further as the company has been raising prices since the beginning of this year to offset the higher cost of revenues. Continuing on Profitability, Cash, and Growth In order to mitigate against supply chain challenges, inventories have been scaled up to above $5 million as per the table below, or 20% more than at the beginning of 2021. This is the reason the cash position has deteriorated slightly. Balance Sheet - Quarterly figures (www.seekingalpha.com) However, these higher inventories should deliver more cash from operations and therefore more growth in the coming quarters. Here, thanks to its ability to pass on costs to customers, NVEC should see higher gross margins, provided it can control operating expenses. In this respect, most probably due to its smaller size with employees being relatively more multi-skilled, the company appears to have some flexibility in moving them from one department to another. In this way, there was a 26% reduction in R&D expenses as staff dedicated more time to revenue-generating activities in Q1. As a result, operating income margins actually increased to 64.4%. Now, this was also due to the timing of some staff incentive compensation, but, any future employee-related expenses should be offset by the uptrend in gross margins. Another factor that can potentially bring more growth is an associated field of electron spinning research called MRAM (Magnetoresistive Random Access Memories) which can be envisioned as the next-generation memory technology, about 600 times faster than conventional ones. This technology should produce a faster and denser all-in-one single memory chip that can hold the data contained in several conventional ones used today. This is the reason NVEC has licensed it to Motorola (MSI), Cypress, and Honeywell International (HON). However, it faces competition from Everspin Technologies (NASDAQ:MRAM) with a market cap of $135 million and which grew revenues by 24% in the June quarter. Risks and Valuations Here, one of the risks for NVEC as a $232 million market cap company is a large billion dollar semiconductor play acquiring Everspin, or another competitor, thereby constituting a direct competitive threat for NVEC. Moreover, with technology evolving rapidly, there could be more competition from lower-priced sensors in a field where continuous development in PCB (printed circuit board) technology is leading to miniaturization or fewer components per square inch. In response, in addition to quality, NVEC can rely on its rapidly evolving product pipeline which recently saw the introduction of a new Ultra miniature version of TMR (Tunneling Magnetoresistance) sensors which are two times smaller in size than the previous generation. Thus, the aim is to constantly innovate and maintain its niche status as a manufacturer of the smallest sensors to equip the tiniest medical or industrial robots, while keeping competitors at bay. Consequently, the ingredients are present, not only to maintain but also to accelerate sales but, at a trailing price to sales of 8.59x, the growth metric has already been priced in. In this case and in line with the profitability rationale guiding this thesis, NVEC remains undervalued by around 30% when considering the trailing P/E of 15.5x. Adjusting accordingly, I obtain a target of about $61-62 (48.3 x 1.3) based on the current share price of $48.5. Valuation metrics (www.seekingalpha.com)

Jul 24
NVE's (NASDAQ:NVEC) Dividend Will Be $1.00

NVE's (NASDAQ:NVEC) Dividend Will Be $1.00

The board of NVE Corporation ( NASDAQ:NVEC ) has announced that it will pay a dividend of $1.00 per share on the 31st...

Jul 20

NVE declares $1.00 dividend

NVE (NASDAQ:NVEC) declares $1.00/share quarterly dividend, in line with previous. Forward yield 8.23% Payable Aug. 31; for shareholders of record Aug. 1; ex-div July 29. See NVEC Dividend Scorecard, Yield Chart, & Dividend Growth.

Shareholder Returns

NVECUS SemiconductorUS Market
7D0.7%1.3%1.0%
1Y-25.0%-24.2%-20.0%

Return vs Industry: NVEC exceeded the US Semiconductor industry which returned -28.9% over the past year.

Return vs Market: NVEC underperformed the US Market which returned -23.2% over the past year.

Price Volatility

Is NVEC's price volatile compared to industry and market?
NVEC volatility
NVEC Average Weekly Movement4.7%
Semiconductor Industry Average Movement7.8%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: NVEC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: NVEC's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198948Daniel Bakerhttps://www.nve.com

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.

NVE Fundamentals Summary

How do NVE's earnings and revenue compare to its market cap?
NVEC fundamental statistics
Market CapUS$230.72m
Earnings (TTM)US$15.07m
Revenue (TTM)US$27.17m

15.3x

P/E Ratio

8.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NVEC income statement (TTM)
RevenueUS$27.17m
Cost of RevenueUS$6.15m
Gross ProfitUS$21.02m
Other ExpensesUS$5.96m
EarningsUS$15.07m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.12
Gross Margin77.38%
Net Profit Margin55.46%
Debt/Equity Ratio0%

How did NVEC perform over the long term?

See historical performance and comparison

Dividends

8.4%

Current Dividend Yield

128%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is NVEC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NVEC?

Other financial metrics that can be useful for relative valuation.

NVEC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue6.5x
Enterprise Value/EBITDA10.3x
PEG Ration/a

Price to Earnings Ratio vs Peers

How does NVEC's PE Ratio compare to its peers?

NVEC PE Ratio vs Peers
The above table shows the PE ratio for NVEC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average12.3x
MRAM Everspin Technologies
15x-19.8%US$122.0m
MX Magnachip Semiconductor
6.8x-12.9%US$479.1m
OIIM O2Micro International
15.7x-56.4%US$124.9m
SGH SMART Global Holdings
11.9x25.8%US$798.9m
15.3xn/aUS$230.7m

Price-To-Earnings vs Peers: NVEC is expensive based on its Price-To-Earnings Ratio (15.3x) compared to the peer average (12.3x).


Price to Earnings Ratio vs Industry

How does NVEC's PE Ratio compare vs other companies in the US Semiconductor Industry?

Price-To-Earnings vs Industry: NVEC is good value based on its Price-To-Earnings Ratio (15.3x) compared to the US Semiconductor industry average (15.5x)


Price to Earnings Ratio vs Fair Ratio

What is NVEC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NVEC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio15.3x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate NVEC's Price-To-Earnings Fair Ratio for valuation analysis.


Share Price vs Fair Value

What is the Fair Price of NVEC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NVEC ($47.76) is trading above our estimate of fair value ($43.12)

Significantly Below Fair Value: NVEC is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


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Future Growth

How is NVE forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


13.2%

Forecasted Semiconductors industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as NVE has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


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  • Check out NVE's track record over time to understand how much the company has returned to shareholders and its earnings growth rate in the past.

Past Performance

How has NVE performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-0.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NVEC has high quality earnings.

Growing Profit Margin: NVEC's current net profit margins (55.5%) are higher than last year (53.7%).


Past Earnings Growth Analysis

Earnings Trend: NVEC's earnings have declined by 0.4% per year over the past 5 years.

Accelerating Growth: NVEC's earnings growth over the past year (17.2%) exceeds its 5-year average (-0.4% per year).

Earnings vs Industry: NVEC earnings growth over the past year (17.2%) underperformed the Semiconductor industry 49.2%.


Return on Equity

High ROE: NVEC's Return on Equity (23.7%) is considered high.


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Financial Health

How is NVE's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: NVEC's short term assets ($38.0M) exceed its short term liabilities ($1.1M).

Long Term Liabilities: NVEC's short term assets ($38.0M) exceed its long term liabilities ($411.4K).


Debt to Equity History and Analysis

Debt Level: NVEC has more cash than its total debt.

Reducing Debt: Insufficient data to determine if NVEC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: NVEC's debt is well covered by operating cash flow (125344280%).

Interest Coverage: NVEC earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is NVE current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


8.38%

Current Dividend Yield

Dividend Yield vs Market

NVE Dividend Yield vs Market
How does NVE dividend yield compare to the market?
SegmentDividend Yield
Company (NVE)8.4%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.6%
Industry Average (Semiconductor)2.1%
Analyst forecast in 3 Years (NVE)n/a

Notable Dividend: NVEC's dividend (8.38%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: NVEC's dividend (8.38%) is in the top 25% of dividend payers in the US market (4.75%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, NVEC has been paying a dividend for less than 10 years.

Growing Dividend: NVEC has only been paying a dividend for 7 years, and since then payments have not increased.


Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (128.3%), NVEC's dividend payments are not well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (160.3%), NVEC's dividend payments are not well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

21.8yrs

Average management tenure


CEO

Daniel Baker (64 yo)

21.75yrs

Tenure

US$697,587

Compensation

Dr. Daniel A. Baker, Ph.D. has been the President and Chief Executive Officer at NVE Corp. since January 2001. Dr. Baker was Interim Principal Financial Officer of NVE Corporation since January 3, 2022 unt...


CEO Compensation Analysis

Daniel Baker's Compensation vs NVE Earnings
How has Daniel Baker's remuneration changed compared to NVE's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$15m

Mar 31 2022US$698kUS$381k

US$15m

Dec 31 2021n/an/a

US$14m

Sep 30 2021n/an/a

US$14m

Jun 30 2021n/an/a

US$13m

Mar 31 2021US$464kUS$370k

US$12m

Dec 31 2020n/an/a

US$12m

Sep 30 2020n/an/a

US$12m

Jun 30 2020n/an/a

US$13m

Mar 31 2020US$450kUS$359k

US$15m

Dec 31 2019n/an/a

US$14m

Sep 30 2019n/an/a

US$14m

Jun 30 2019n/an/a

US$14m

Mar 31 2019US$398kUS$345k

US$15m

Dec 31 2018n/an/a

US$16m

Sep 30 2018n/an/a

US$16m

Jun 30 2018n/an/a

US$15m

Mar 31 2018US$394kUS$300k

US$14m

Dec 31 2017n/an/a

US$13m

Sep 30 2017n/an/a

US$13m

Jun 30 2017n/an/a

US$13m

Mar 31 2017US$385kUS$291k

US$13m

Dec 31 2016n/an/a

US$13m

Sep 30 2016n/an/a

US$12m

Jun 30 2016n/an/a

US$12m

Mar 31 2016US$337kUS$284k

US$12m

Compensation vs Market: Daniel's total compensation ($USD697.59K) is below average for companies of similar size in the US market ($USD1.68M).

Compensation vs Earnings: Daniel's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: NVEC's management team is seasoned and experienced (21.8 years average tenure).


Board Members

Experienced Board: NVEC's board of directors are seasoned and experienced ( 18.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NasdaqCM:NVEC Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
09 May 22BuyUS$4,630James BrackeIndividual100US$46.30
04 Feb 22BuyUS$5,800James BrackeIndividual100US$58.00
25 Jan 22BuyUS$18,270James BrackeIndividual300US$60.90

Ownership Breakdown

What is the ownership structure of NVEC?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders84,9261.8%
General Public1,989,23941.2%
Institutions2,756,66157.1%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 52.57% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
12.06%
Kayne Anderson Rudnick Investment Management, LLC
582,571$27.8m-2.55%0.08%
11.25%
Royce & Associates, LP
543,690$26.0m9.26%0.2%
4.58%
The Vanguard Group, Inc.
221,107$10.6m-32.2%no data
3.38%
Renaissance Technologies LLC
163,300$7.8m-16.3%0.01%
2.15%
Punch & Associates Investment Management, Inc.
104,055$5.0m-8.37%0.35%
2.05%
BlackRock, Inc.
98,832$4.7m-68.98%no data
2.03%
Dimensional Fund Advisors LP
97,862$4.7m1.31%no data
1.68%
Daniel Baker
81,186$3.9m0%no data
1.6%
Millennium Management LLC
77,179$3.7m575.53%no data
1.52%
BNY Mellon Asset Management
73,317$3.5m-14.95%no data
1.2%
Geode Capital Management, LLC
57,933$2.8m-30.08%no data
1.05%
Oak Family Advisors, LLC
50,891$2.4m8.96%1.49%
0.94%
State Street Global Advisors, Inc.
45,572$2.2m-63.37%no data
0.88%
Merrion Investment Management Company, L.L.C
42,505$2.0m-3.41%1.96%
0.78%
Penn Mutual Asset Management, LLC
37,468$1.8m2041.03%0.51%
0.71%
Foundry Partners, LLC
34,370$1.6m0%0.1%
0.59%
Los Angeles Capital Management LLC
28,485$1.4m-39.41%0.01%
0.59%
Isthmus Partners, LLC
28,301$1.4m4.46%0.26%
0.57%
Victory Capital Management Inc.
27,313$1.3m5122.37%no data
0.56%
Wells Fargo & Company, Securities and Brokerage Investments
27,089$1.3m-7.42%no data
0.54%
Jackson National Asset Management, LLC
26,320$1.3m-21.07%0.02%
0.54%
Ergoteles LLC
26,100$1.2m0%0.04%
0.46%
Bridge City Capital LLC
22,113$1.1m23.19%0.59%
0.46%
Citadel Advisors LLC
22,018$1.1m85.93%no data
0.42%
Mitsubishi UFJ Kokusai Asset Management Co., Ltd.
20,097$959.8k9.95%no data

Company Information

NVE Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: NVE Corporation
  • Ticker: NVEC
  • Exchange: NasdaqCM
  • Founded: 1989
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Implied Market Cap: US$230.720m
  • Shares outstanding: 4.83m
  • Website: https://www.nve.com

Number of Employees


Location

  • NVE Corporation
  • 11409 Valley View Road
  • Eden Prairie
  • Minnesota
  • 55344
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NVECNasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDNov 2000
NVKDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2000

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/03 00:00
End of Day Share Price2022/10/03 00:00
Earnings2022/06/30
Annual Earnings2022/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.