3 weeks ago
13
Scott Levine, The Motley Fool
Thu, July 16, 2026 astatine 12:04 PM CDT 3 min read
After closing higher than the erstwhile marketplace sessions connected some Tuesday and Wednesday, shares of Frequency Electronics (NASDAQ: FEIM) are heading successful the other absorption today. The developer of clip and frequence procreation technologies reported fourth-quarter 2025 fiscal results yesterday aft the doorbell rang, and investors are expressing their disapproval today.
As of 11:42 a.m ET, shares of Frequency are down 9.4%, paring backmost an earlier diminution of 16.9%.
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Investors person heartburn from the company's "year of digestion"
Reporting fourth-quarter 2026 gross of $15.4 million, Frequency came up abbreviated of analysts' expectations that it would station income of $18.6 million. With respect to the entirety of fiscal 2026, Frequency booked income of $63.2 cardinal compared to $69.8 cardinal successful fiscal 2025.
Addressing the company's performance, Tom McClelland, Frequency's CEO, stated that fiscal 2026 "was a twelvemonth of digestion from a gross standpoint," with immoderate gross that would different person been expected successful fiscal 2025 pulled forward.
Another interest for investors was the company's declining profitability. Whereas Frequency reported diluted net per stock (EPS) of $0.33 successful Q4 2025, the institution reported a diluted nonaccomplishment per stock of negative $0.50 successful Q4 2026.
These clouds person a metallic lining
While investors are intelligibly disappointed with Frequency's caller performance, the aboriginal looks bright. The institution reported $111 cardinal successful backlog astatine the extremity of Q4 2026, up 59% twelvemonth implicit year. Couple this with the information that the institution acceptable targets for a minimum gross borderline of 50% and a minimum operating borderline of 30% by fiscal 2029, and it seems the institution foresees maturation ahead. Investors who find management's outlook encouraging volition privation to excavation deeper into the tech banal and see utilizing today's diminution arsenic a buying opportunity.
Should you bargain banal successful Frequency Electronics close now?
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