NVECNVE Corporation
Is the business good?
The checks split: earnings fully cash-backed (1.0×) and elite returns on assets, but margins compressing.
Operating profit is fully backed by cash.
Profits are tracking sales roughly one-for-one, limited operating leverage either way.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 26% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is NVEC?
NVE Corporation earns 40% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 31 points above what the capital costs: growth creates value
- Operating margin
- 62%
Operating margin · Semiconductors median 7.5% · 12 months to Q1 2027
- Cash conversion
- 1.02×
Cash conversion · 1.06× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +0.14%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2021 | 60% |
| FY2022 | 61% |
| FY2023 | 67% |
| FY2024 | 62% |
| FY2025 | 62% |
| FY2026 | 60% |
Details›
- Gross margin12 months to Q1 2027
- 79%
- Operating margin12 months to Q1 2027
- 62%
- Net margin12 months to Q1 2027
- 58%
- Free cash flow margin
- −43%
- R&D as % of revenue
- 11%
- Revenue, trailing twelve months
- $31M
- Free cash flow, trailing twelve months
- −$13M
- Net income, trailing twelve months
- $18M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 40%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.