Value
3.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.1 |
| P/S | 0.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.0 |
| PEG | 5.9 |
- ▸Forward P/E: 35.0x
- ▸PEG: 1.28
NVEC · Why this verdict
Why NVE (NVEC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades at a rich forward P/E of 34.7x with a PEG ratio of 1.27, reflecting an expensive valuation for its growth profile. Valuation breakdown | Forward P/E should compress toward 25x or below within 12 months for the valuation to normalize. | →Stable |
| CounterHigh-ROE, high-margin niche semiconductor businesses often sustain premium multiples indefinitely if their moat holds, making a simple P/E comparison misleading. | ||
NVE Corporation is a high-quality business with excellent ROE (25%) and strong margins (58%), backed by a strong Piotroski F-Score of 8/9. Quality breakdown | ROE should stay above 20% and margins above 50% over the next 12 months to sustain the quality profile. | →Stable |
| CounterThe engine also flagged an earnings-quality red flag at just 48% FCF-to-net-income conversion, meaning reported profitability may not be fully backed by cash generation. | ||
The engine applied a leverage penalty of -1.0 points due to a debt-to-equity ratio of 1.6, an unusually elevated leverage level for this business. Bear case | Debt-to-equity should decline back below 1.0 within 12 months to remove the leverage penalty. | →Stable |
| CounterA debt-to-equity ratio of 1.6 is still well within manageable bounds for a profitable, high-margin business generating consistent free cash flow. | ||
The engine flagged a yield-trap warning — the stock's dividend yield appears attractive but is assessed as unsafe given underlying fundamentals. Catalyst breakdown | Dividend safety score should improve above 5.0 within 12 months if the payout is sustained through a full cash-flow cycle. | →Stable |
| CounterA single yield-trap flag can be a false positive if it is driven by a temporarily depressed stock price rather than a genuine payout-coverage problem. | ||
Earnings are due in 18 days with a 3-of-4 beat streak acting as a near-term catalyst, though momentum at 5.1 sits just below the engine's 5.5 preferred threshold. Gates warning | The beat streak should extend at the 2026-07-22 report, and momentum should recover above 5.5. | →Stable |
| CounterA momentum reading already below the soft threshold ahead of earnings raises the odds of a sell-the-news reaction even if the beat streak continues. | ||
The stock trades at a rich forward P/E of 34.7x with a PEG ratio of 1.27, reflecting an expensive valuation for its growth profile.
→StableValuation breakdown
- Expectation
- Forward P/E should compress toward 25x or below within 12 months for the valuation to normalize.
CounterHigh-ROE, high-margin niche semiconductor businesses often sustain premium multiples indefinitely if their moat holds, making a simple P/E comparison misleading.
NVE Corporation is a high-quality business with excellent ROE (25%) and strong margins (58%), backed by a strong Piotroski F-Score of 8/9.
→StableQuality breakdown
- Expectation
- ROE should stay above 20% and margins above 50% over the next 12 months to sustain the quality profile.
CounterThe engine also flagged an earnings-quality red flag at just 48% FCF-to-net-income conversion, meaning reported profitability may not be fully backed by cash generation.
The engine applied a leverage penalty of -1.0 points due to a debt-to-equity ratio of 1.6, an unusually elevated leverage level for this business.
→StableBear case
- Expectation
- Debt-to-equity should decline back below 1.0 within 12 months to remove the leverage penalty.
CounterA debt-to-equity ratio of 1.6 is still well within manageable bounds for a profitable, high-margin business generating consistent free cash flow.
The engine flagged a yield-trap warning — the stock's dividend yield appears attractive but is assessed as unsafe given underlying fundamentals.
→StableCatalyst breakdown
- Expectation
- Dividend safety score should improve above 5.0 within 12 months if the payout is sustained through a full cash-flow cycle.
CounterA single yield-trap flag can be a false positive if it is driven by a temporarily depressed stock price rather than a genuine payout-coverage problem.
Earnings are due in 18 days with a 3-of-4 beat streak acting as a near-term catalyst, though momentum at 5.1 sits just below the engine's 5.5 preferred threshold.
→StableGates warning
- Expectation
- The beat streak should extend at the 2026-07-22 report, and momentum should recover above 5.5.
CounterA momentum reading already below the soft threshold ahead of earnings raises the odds of a sell-the-news reaction even if the beat streak continues.
TrendMatrix Research · core thesis
Engine thesis — one sentence
NVE Corporation is a high-quality, high-margin niche semiconductor business, but the stock's rich valuation, elevated leverage, and dividend safety warning temper the otherwise strong fundamental profile.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.4 |
| ROA | 10.0 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| FCF quality | 3.9 |
| Moat | 8.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 25%
- ▸Strong margins: 58%
- ▸Earnings quality RED FLAG: 48% FCF/NI
- ▸Wide economic moat
Growth
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.8 |
| EPS growth | 7.5 |
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.8 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 4.9 |
- ▸Uptrend pullback (RSI 37) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
7.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.2 |
| quality rank | 8.9 |
| growth rank | 1.9 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.7 |
| support resistance | 9.2 |
| 52w position | 5.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.3 |
| days to cover | 8.9 |
| volatility | 0.0 |
| beta | 5.7 |
| debt equity | 9.9 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.7 |
| dividend safety | 2.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 4.1%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:15d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.5<4.5
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (8.1) with weak momentum (3.5)
SuitabilityAggressive — Beta 1.33>1.3, MCap $0.5B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Quality at 8.1; weakest: Value at 3.2. No conviction either direction.
The strongest dimensions are Quality at 8.1, Technical at 7.6, and Insider at 7.5; the weakest are Value at 3.2, Momentum at 3.5, and Catalyst at 4.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality High Roe Business
Trip ifFCF-to-net-income conversion falls below 30% or ROE drops below 15% for 2 consecutive quarters.
- P2Expensive Valuation
Trip ifForward P/E stays above 30x while earnings growth decelerates below 5% YoY.
- P3Leverage Penalty Flagged
Trip ifDebt-to-equity rises above 2.0 within the next 2 quarters.
- P4Dividend Yield Trap Warning
Trip ifThe company cuts its dividend payout by more than 20% within the next 4 quarters.
- P5Earnings Catalyst Soft Momentum
Trip ifMomentum score stays below 5.5 for 2 consecutive quarters after the earnings report.