Frequency Electronics (NASDAQ:FEIM) Posts Earnings Results, Beats Expectations By $0.26 EPS

Frequency Electronics (NASDAQ:FEIM) announced its earnings results on Thursday. The communications equipment provider reported $0.41 earnings per share for the quarter, beating analysts’ consensus estimates of $0.15 by $0.26, FiscalAI reports. Frequency Electronics had a negative return on equity of 1.56% and a negative net margin of 1.43%.The company had revenue of $23.45 million during the quarter, compared to analyst estimates of $17.85 million.

Here are the key takeaways from Frequency Electronics’ conference call:

• Record first-quarter performance: Revenue reached $23.5 million, up 70% year over year, while net income rose to $4.2 million, or $0.41 per share, from $634,000 a year earlier. Gross margin improved to 45.8% and operating margin to 22%.
• Backlog and outlook strengthened: Fully funded backlog reached a record $129 million, up 82% year over year, with approximately 65% expected to convert within the next 12 months. Management said the results increase confidence in meeting or exceeding its $150 million fiscal 2029 revenue target.
• Defense and space demand remains robust: Growth is being supported by satellite programs, proliferated LEO constellations, Patriot and THAAD-related work, missile programs, and a secured communications contract for more than 1,000 systems. One customer is seeking to increase monthly production by over 50% and has indicated potential follow-on orders.
• Capital raise supports expansion: The company raised approximately $73 million through a secondary offering, including the subsequent greenshoe exercise, while remaining debt-free. Management plans to use the proceeds for capacity expansion, which could accelerate growth beyond its current fiscal 2029 target and is expected to be primarily organic.
• Execution capacity is a key constraint: FEI said ramping production to meet customer demand is one of its biggest challenges and that it is declining overly optimistic delivery schedules in some cases. Management also cautioned that margin improvement is unlikely to follow a perfectly straight line as production scales.

Frequency Electronics Stock Performance

NASDAQ FEIM opened at $62.06 on Friday. The stock has a fifty day moving average of $65.54 and a 200-day moving average of $60.62. The stock has a market capitalization of $693.83 million, a P/E ratio of -689.56 and a beta of 0.72. Frequency Electronics has a 52 week low of $26.05 and a 52 week high of $80.60.

Hedge Funds Weigh In On Frequency Electronics

Several large investors have recently made changes to their positions in FEIM. New York State Common Retirement Fund boosted its stake in shares of Frequency Electronics by 63.6% in the 4th quarter. New York State Common Retirement Fund now owns 1,800 shares of the communications equipment provider’s stock valued at $97,000 after purchasing an additional 700 shares during the last quarter. Lazard Asset Management LLC raised its stake in shares of Frequency Electronics by 10,807.7% during the second quarter. Lazard Asset Management LLC now owns 4,254 shares of the communications equipment provider’s stock worth $96,000 after buying an additional 4,215 shares during the last quarter. Bank of America Corp DE lifted its holdings in Frequency Electronics by 3,558.9% in the second quarter. Bank of America Corp DE now owns 2,671 shares of the communications equipment provider’s stock valued at $61,000 after buying an additional 2,598 shares during the period. Raymond James Financial Inc. bought a new position in Frequency Electronics in the second quarter valued at approximately $112,000. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. bought a new position in Frequency Electronics in the second quarter valued at approximately $82,000. Institutional investors and hedge funds own 58.60% of the company’s stock.

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on the stock. Weiss Ratings lowered shares of Frequency Electronics from a “hold (c)” rating to a “hold (c-)” rating in a report on Wednesday, September 2nd. Wall Street Zen raised shares of Frequency Electronics from a “strong sell” rating to a “sell” rating in a research note on Saturday, July 4th. One investment analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating and one has given a Hold rating to the company. Based on data from MarketBeat.com, Frequency Electronics currently has a consensus rating of “Buy” and a consensus target price of $43.67.

About Frequency Electronics

Frequency Electronics, Inc (NASDAQ:FEIM) is a U.S.-based designer and manufacturer of precision frequency control products and timing solutions. The company’s portfolio includes oven-controlled crystal oscillators (OCXOs), atomic frequency standards such as rubidium oscillators, GPS-disciplined oscillators (GPSDOs), microwave synthesizers, and integrated timing subsystems. These products are used to provide stable and accurate frequency and time references for applications that demand high performance and reliability.

FEI serves a broad range of markets, including telecommunications, aerospace and defense, satellite and space systems, test and measurement equipment, and critical infrastructure.