Outlook
- Company reaffirms three-year minimum revenue target of at least $150 mln by fiscal 2029
- Frequency Electronics sets minimum gross margin target of 50% and operating margin target of 30% by fiscal 2029
- Company expects to return to normal cash generation in fiscal 2027
Result drivers
- REVENUE PULL-FORWARD - Co said Q4 revenue decline reflected prior-year revenue that was pulled forward, making for a difficult comparison
- RESTRUCTURING AND NON-RECURRING CHARGES - Q4 results were impacted by a $3.8 mln inventory write-down, severance, and a one-time change in employee PTO policy, which depressed margins
- INVESTMENTS IN ENGINEERING AND EFFICIENCY - Increased hiring and a manufacturing efficiency project raised costs in Q4 ahead of expected future growth
Analyst coverage and valuation
- The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
- The average consensus recommendation for the electrical components & equipment peer group is "buy"
- Wall Street's median 12-month price target for Frequency Electronics Inc is $65.00, about 10.3% above its July 14 closing price of $58.93
- The stock recently traded at 56 times the next 12-month earnings vs. a P/E of 43 three months ago
Quarterly results and key metrics
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