One-glance verdict
Overvalued
$26.60 our estimate vs market $60.22
Wall Street consensus: $95.50 (259.0% higher than our fair-value estimate)
126% above our estimate, beyond the bull case
Fundamentals snapshot
Frequency Electronics, Inc.
FEIM · NGM · Technology · Communication Equipment
Current price
$60.22
52-week range
$26.05 - $89.76
Market cap
$678.88M
Balance sheet
Healthy
-34.49x Concerning
Net cash $54.45M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 15.2% last year.
- Reward Returns 3.0% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 5/10 years.
- Risk Stock trades 1926.7% above its 5-year average P/E.
What this company does
Frequency Electronics, Inc.
Frequency Electronics, Inc. makes fancy timing and frequency devices, like super precise clocks, for things like satellites and cell phone towers, and also for military uses. Their money mostly comes from selling these specialized products, and this matters because it shows they are a key supplier for critical technologies that need very accurate timekeeping.
How the company got here
Frequency Electronics, Inc. (FEI) was founded in 1961 and has spent over six decades developing highly specialized technologies for precision timing and frequency control. Initially, the company focused on solving complex timing challenges for demanding applications in aerospace, defense, and space. Over time, FEI evolved from a defense contractor to a broader provider of advanced timing and frequency solutions, serving both government and commercial clients worldwide. The company's expertise has been applied to critical systems where accuracy, stability, and reliability are paramount, including satellite communications, navigation systems, and military applications. FEI has a history of innovation, with its products used in significant space missions and defense programs.
What it actually does
Frequency Electronics, Inc. designs, develops, manufactures, and sells precision time and frequency control products. These are highly specialized components and systems that ensure accurate timing and stable frequencies for various applications. Think of them as the incredibly precise internal clocks and signal generators that critical electronic systems rely on to function correctly. Their products are essential for systems that require exact synchronization and reliable frequency references, such as in satellite communications, military operations, and advanced navigation.
FEI-NY
The FEI-NY segment is a core part of Frequency Electronics, Inc., focusing on precision time and frequency control products. These are used in demanding environments like communication satellites and ground-based telecommunication stations, ensuring that signals are transmitted and received with the utmost accuracy. This segment also provides essential components and systems for the U.S. military, along with design and technical support for satellite-related projects. Essentially, FEI-NY builds the highly accurate timing and frequency components that keep complex communication and defense systems, especially those in space, running precisely.
FEI-Zyfer
FEI-Zyfer is another key business segment of Frequency Electronics, Inc., specializing in technologies related to the Global Positioning System (GPS). This segment develops and manufactures systems and subsystems that use GPS for secure communications, government and commercial locator applications, and precise timing. They also handle the sale and support of wireline telecommunications products, including those for 5G networks. In essence, FEI-Zyfer leverages GPS and other technologies to provide accurate positioning, navigation, and timing solutions for a variety of secure and commercial uses.
What management is betting on now
Frequency Electronics' management is focused on expanding into new, large market opportunities by enhancing their atomic clock and related technology offerings. They are also exploring growth through mergers, acquisitions, and strategic partnerships. The company is targeting significant revenue growth, aiming for at least $150 million in annual revenue by fiscal year 2029, supported by a strong backlog and growth in markets like quantum sensing, proliferated satellites, and space exploration. Management is also focused on improving profitability by targeting higher gross and operating margins.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$3.35M
FY2025 Q3
$-3.95M
FY2025 Q4
$-786.00K
FY2026 Q1
$385.00K
FY2026 Q2
$-1.14M
FY2026 Q3
$-2.28M
FY2026 Q4
$1.46M
FY2027 Q1
$1.78M
Revenue
$23.45M
Net income
$4.22M
Diluted EPS
0.41
Operating cash flow
$2.62M
Free cash flow
$1.78M
Fetching…
Sources
Revenue
$15.40M
Net income
$-4.91M
Diluted EPS
-0.50
Operating cash flow
$2.06M
Free cash flow
$1.46M
Fetching…
Sources
Revenue
$16.89M
Net income
$1.57M
Diluted EPS
0.16
Operating cash flow
$-1.42M
Free cash flow
$-2.28M
Fetching…
Sources
Revenue
$17.13M
Net income
$1.80M
Diluted EPS
0.18
Operating cash flow
$-523.00K
Free cash flow
$-1.14M
Fetching…
Sources
Revenue
$13.81M
Net income
$634.00K
Diluted EPS
0.07
Operating cash flow
$1.16M
Free cash flow
$385.00K
Fetching…
Sources
Revenue
$19.99M
Net income
$3.20M
Diluted EPS
0.33
Operating cash flow
$-155.00K
Free cash flow
$-786.00K
Fetching…
Sources
Revenue
$18.93M
Net income
$15.40M
Diluted EPS
1.60
Operating cash flow
$-3.62M
Free cash flow
$-3.95M
Fetching…
Sources
Revenue
$15.82M
Net income
$2.65M
Diluted EPS
0.28
Operating cash flow
$3.87M
Free cash flow
$3.35M
Fetching…
Sources
Is it cheap or expensive?
Fair value $26.60 vs current price $60.22
Wall Street consensus is the average analyst price target: $95.50 (259.0% higher than our fair-value estimate).
Our most-likely fair value is $26.60 a share — about 55.8% below today's price of $60.22, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $54.4M - more cash than debt. Interest coverage -34.5x.
Net debt
$-54.45M
Interest coverage
-34.49x
Frequency Electronics, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
FEIM
BASELINE
Frequency Electronics, Inc.
Total debt $6.96M Interest coverage -34.49x This is the baseline the peer rows are being compared against.
Total debt $132.00K Interest coverage 935.55x This peer still has a real interest-payment cushion, while FEIM does not.
Total debt $38.94M Interest coverage 4.98x This peer still has a real interest-payment cushion, while FEIM does not.
Total debt $88.77M Interest coverage 19.50x This peer still has a real interest-payment cushion, while FEIM does not.
Total debt $217.97M Interest coverage -0.80x Neither company has much profit cushion over interest right now.
Total debt $9.62M Interest coverage 2.89x This peer still has a real interest-payment cushion, while FEIM does not.
What you should know
The case for and against FEIM
3 Rewards
1 Risk
Rewards
-
Revenue grew 15.2% last year.
-
Returns 3.0% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
-
Stock trades 1926.7% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
240.88x
Forward P/E
31.36x
P/B
5.51x
P/S
9.32x
EV/EBITDA
80.68x
PEG ratio
1.25x
Profitability
How much profit each dollar creates
Gross margin
38.2%
Operating margin
22.2%
Net margin
3.7%
ROE
3.0%
ROA
3.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.06x
Current ratio
5.34x
Quick ratio
4.19x
Total debt
$6.96M
Total cash
$61.41M
Growth
How the business has been compounding
Revenue TTM
$72.87M
Revenue 5Y CAGR
7.0%
EPS TTM
0.25
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$2.74M
Free CF TTM
$-1.58M
FCF margin
-2.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2024-08-08