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1. Company Snapshot

1.a. Company Description

Frequency Electronics, Inc., together with its subsidiaries, designs, develops, manufactures, and sells precision time and frequency control products and components for microwave integrated circuit applications.It operates through two segments, FEI-NY and FEI-Zyfer.The FEI-NY segment offers precision time, frequency generation, and synchronization products and subsystems used in communication satellites, terrestrial cellular telephone, or other ground-based telecommunication stations; and other components and systems for the United States military.


The FEI-Zyfer segment designs, develops, and manufactures products for precision navigation and timing primarily incorporating global positioning system technologies into radar systems, airborne SIGINT/COMINT platforms, information networks, test equipment, military command and control terminals, and satellite ground stations.The company's products are used in commercial, government satellites, secure communications, command, control, communication, computer, intelligence, security and reconnaissance, and electronic warfare applications for the United States government on land, sea, and air-borne platforms.It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia.


Frequency Electronics, Inc.was founded in 1961 and is headquartered in Mitchel Field, New York.

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1.b. Last Insights on FEIM

Frequency Electronics, Inc.'s recent performance was driven by strong revenue growth, with Q4 and full-year revenues reaching $20.0 million and $69.8 million, respectively. The company's operating income and net income also increased significantly. A $20 million share repurchase authorization was announced, which is a positive event for shareholders. Additionally, the company secured a $3.14 million contract for precision timing and frequency control products. Its products are seeing significant demand, particularly in satellite payload sales, which doubled to $12.1 million.

1.c. Company Highlights

2. Frequency Electronics' Q1 2026: Delays Mask Underlying Strength

Frequency Electronics reported Q1 2026 revenue of $13.8 million, down from $15.1 million in the prior year, primarily due to customer-driven program delays. Revenue breakdown included $6.5 million (47%) from satellite programs, $6.6 million was not the figure reported, $6.9 million (50%) from non-space U.S. government/DOD contracts, and $439,000 in other commercial revenue. The decline in revenue led to a decrease in gross margin and operating income, which fell to $364,000 from $2.4 million. Consequently, net income dropped to $634,000 or $0.07 per share, significantly lower than the $2.4 million or $0.25 per share in the same period last year. Earnings per share (EPS) came in at $0.07, missing estimates of $0.43.

Publication Date: Sep -23

📋 Highlights
  • Revenue Decline:: Q1 2026 revenue fell to $13.8M ($15.1M prior year), attributed to customer program delays, not cancellations, with recovery expected in subsequent quarters.
  • Revenue Breakdown:: Satellite programs ($6.5M, 47%), non-space U.S. government/DOD contracts ($6.9M, 50%), and other ($439K) accounted for total revenue.
  • Profit Margins:: Operating income dropped to $364K ($2.4M prior year), with gross margin declines linked to lower revenue and mix shifts.
  • Backlog & Liquidity:: $71M funded backlog, $30M working capital, and a debt-free balance sheet underscore financial stability despite near-term challenges.
  • Strategic Investments:: $20M share repurchase authorization, new Boulder quantum sensing facility, and partnerships with former NIST scientists to accelerate secure timing and quantum tech growth.

Financial Position and Backlog

The company's funded backlog remains substantial at $71 million, indicating a strong pipeline of future revenue. Frequency Electronics maintains a healthy financial position, with $30 million in working capital and a debt-free balance sheet, underscoring its liquidity and financial stability. The current P/E ratio of 13.25 and P/S ratio of 4.24 suggest the market has certain expectations regarding the company's future growth and revenue generation capabilities.

Strategic Initiatives and Growth Prospects

Despite the current quarter's decline, Frequency Electronics is pursuing strategic initiatives aimed at driving future growth. The company is investing in a new engineering facility in Boulder, Colorado, focused on quantum sensing, and is partnering with former NIST scientists. A Quantum Sensing Summit is planned for October, highlighting the company's commitment to advancing in this area. Leadership emphasized the company's growth prospects in defense and space markets, including programs like Golden Dome, THAAD, and B-2. The announcement of a $20 million share repurchase authorization also demonstrates the company's confidence in its long-term prospects.

Quantum Sensing and Technology Advancements

During the Q&A session, the CEO highlighted the company's progress in quantum sensing technologies, including mercury ion clock prototypes and NV Diamond magnetometers for alternative positioning, navigation, and timing (PNT) solutions. These advancements are expected to contribute to the company's growth in the defense and space sectors, where secure timing solutions are increasingly critical. The focus on near-term applications rather than quantum computing underscores the company's pragmatic approach to leveraging its technological capabilities.

3. NewsRoom

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Frequency Electronics: Short-Term Pain But Long-Term Quantum Gain

Dec -04

Source: seekingalpha.com

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FEIM's Q1 Earnings Fall Y/Y on Program Delays, Stock Down 16%

Sep -17

Source: zacks.com

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Frequency Electronics: Still Bullish After A Soft Quarter

Sep -15

Source: seekingalpha.com

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RH Posts Downbeat Results, Joins Frequency Electronics, Tronox And Other Big Stocks Moving Lower In Friday's Pre-Market Session

Sep -12

Source: benzinga.com

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Frequency Electronics, Inc. (FEIM) Q1 2026 Earnings Call Transcript

Sep -11

Source: seekingalpha.com

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Frequency Electronics, Inc. Announces First Quarter Fiscal Year 2026 Financial Results

Sep -11

Source: globenewswire.com

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Frequency Electronics Announces First Quarter Fiscal 2026 Financial Results Conference Call: Thursday, September 11, 2025, at 4:30 PM ET

Sep -09

Source: globenewswire.com

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3 High-Growth Tech Stocks Set to Double By 2027

Sep -04

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.72%)

6. Segments

FEI-NY

Expected Growth: 9.5%

Frequency Electronics, Inc. (FEI-NY) exhibits 9.5% growth driven by increasing demand for precision timing and synchronization solutions in 5G networks, satellite communications, and military applications. Additionally, FEI's expansion into adjacent markets, such as data centers and edge computing, contributes to its growth momentum.

FEI-Zyfer

Expected Growth: 10.5%

FEI-Zyfer's 10.5% growth is driven by increasing demand for precision timing and synchronization solutions in 5G networks, military communications, and satellite systems. Additionally, the segment benefits from Frequency Electronics, Inc.'s strong research and development investments, strategic partnerships, and expanding presence in the aerospace and defense industries.

Intersegment

Expected Growth: 9.0%

Frequency Electronics, Inc.'s 9.0% intersegment growth is driven by increasing demand for precision timing and synchronization solutions in the 5G network infrastructure, coupled with growing adoption of satellite-based communication systems. Additionally, the company's strategic investments in research and development have enabled it to capitalize on emerging opportunities in the aerospace and defense sectors.

7. Detailed Products

RF Microwave Products

Frequency Electronics, Inc. designs and manufactures a range of RF microwave products, including oscillators, amplifiers, and synthesizers, used in various applications such as satellite communications, radar systems, and electronic warfare.

Wireless and Satellite Communications

The company provides wireless and satellite communication solutions, including satellite transceivers, modems, and transponders, used in various applications such as satellite-based internet, mobile backhaul, and IoT devices.

Precision Time and Frequency Products

Frequency Electronics, Inc. offers a range of precision time and frequency products, including atomic clocks, time standards, and frequency standards, used in various applications such as telecommunications, navigation, and scientific research.

Custom and OEM Solutions

The company provides custom and OEM solutions, including design, development, and manufacturing of custom RF and microwave components, used in various applications such as aerospace, defense, and industrial automation.

8. Frequency Electronics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Frequency Electronics, Inc. faces moderate threat from substitutes due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

Frequency Electronics, Inc. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Frequency Electronics, Inc. relies on a few key suppliers for critical components, which gives them some bargaining power.

Threat Of New Entrants

The market for Frequency Electronics, Inc.'s products is highly competitive, and new entrants can easily enter the market with innovative products.

Intensity Of Rivalry

The market for Frequency Electronics, Inc.'s products is highly competitive, with many established players, leading to intense rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 18.84%
Debt Cost 6.18%
Equity Weight 81.16%
Equity Cost 6.18%
WACC 6.18%
Leverage 23.22%

11. Quality Control: Frequency Electronics, Inc. passed 3 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
Frequency Electronics

A-Score: 5.6/10

Value: 3.7

Growth: 5.2

Quality: 7.6

Yield: 5.0

Momentum: 10.0

Volatility: 2.0

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A-Score: 5.2/10

Value: 3.3

Growth: 6.7

Quality: 7.8

Yield: 0.0

Momentum: 8.0

Volatility: 5.3

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Knowles

A-Score: 4.3/10

Value: 3.6

Growth: 1.4

Quality: 6.3

Yield: 0.0

Momentum: 8.0

Volatility: 6.3

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Clearfield

A-Score: 3.3/10

Value: 2.4

Growth: 4.2

Quality: 4.5

Yield: 0.0

Momentum: 5.0

Volatility: 3.7

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Iteris

A-Score: 3.2/10

Value: 1.0

Growth: 7.0

Quality: 4.8

Yield: 0.0

Momentum: 5.0

Volatility: 1.3

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ClearOne

A-Score: 3.1/10

Value: 7.4

Growth: 2.1

Quality: 3.9

Yield: 5.0

Momentum: 0.5

Volatility: 0.0

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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

31.32$

Current Price

31.32$

Potential

-0.00%

Expected Cash-Flows