Needham has maintained a Hold rating on shares of Vicor (NASDAQ:VICR) Corporation (NASDAQ: VICR) following the company's third-quarter financial results which surpassed analyst expectations for revenue and non-GAAP (NG) earnings per share (EPS), although gross margins (GM) fell short.
The company's management chose not to issue guidance, citing the uncertainty stemming from ongoing litigation.
Vicor Corporation reported that their third-quarter performance was bolstered by the industrial and aerospace & defense (A&D) sectors, marking the second quarter in a row these segments have shown strong results.
This uptick helped to balance a softer showing from the high-performance computing (HPC) sector. Vicor's progress in its legal dispute with Delta was also highlighted, as an initial determination from the administrative law judge (ALJ) found Delta to have infringed on certain Vicor patents, potentially leading to an exclusion order affecting Delta and its manufacturing partners.
The completion of silicon development for Vicor's Generation 5 (Gen 5) chipset was announced, aligning with the company's schedule. However, the shipment of these chipsets has been delayed due to a required printed circuit board (PCB) re-spin related to a current multiplier issue. Vicor anticipates that the Gen 5 solutions will begin shipping in volume to its lead customer in the first half of 2025.
In other recent news, Vicor Corporation reported a slight increase in revenue for the second quarter of 2024, despite a fall in gross profit margin leading to a net loss. The company's revenue was bolstered by over $30 million in Non-Cancellable, Non-Returnable orders from a key customer. Vicor's book-to-bill ratio surpassed 1.0 for the first time in two years, indicating strong demand in the aerospace and defense, and industrial sectors.
Vicor has also received a reiterated Hold rating from Needham, following its 2Q24 financial results. The company's Generation 5 products are on schedule, expected to begin sampling soon and projected to see a production ramp in the second half of 2025.
Additionally, Vicor received a favorable Initial Determination from the U.S. International Trade Commission, finding that certain imported power converter modules and computing systems infringed on Vicor's patents. This ruling could potentially limit competition from products found to infringe on their patents.
InvestingPro Insights
Vicor Corporation's recent financial performance and legal developments can be further contextualized with insights from InvestingPro. Despite the company's strong showing in industrial and A&D sectors, InvestingPro data reveals that Vicor's revenue growth for the last twelve months as of Q2 2024 was -10.4%, with a quarterly revenue decline of 19.57% in Q2 2024. This aligns with the InvestingPro Tip that analysts anticipate a sales decline in the current year.
However, Vicor maintains impressive gross profit margins, as highlighted by an InvestingPro Tip. The company's gross profit margin stood at 51.62% for the last twelve months as of Q2 2024, underscoring its ability to maintain profitability despite revenue challenges.
The ongoing litigation and its potential impact on Vicor's future are reflected in the stock's volatility. An InvestingPro Tip notes that Vicor's stock price movements are quite volatile. This is evident in the company's price performance, with a significant 15.93% return over the last month, but a -18.36% return over the past year.
Investors considering Vicor should note that InvestingPro offers 16 additional tips for a more comprehensive analysis of the company's financial health and market position.
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