Investment Thesis
Vishay exhibits fundamentally weak profitability with a net margin of only 0.9% and operating margin of 2.6%, generating minimal returns (ROE 0.3%, ROA 0.2%). Most concerning is negative free cash flow of -$47M despite positive operating cash flow, indicating unsustainable capital expenditure levels that exceed earnings power. While adequate liquidity and moderate debt provide near-term stability, the combination of razor-thin margins, poor returns, and cash burn signals deteriorating fundamental quality.
Strengths
- Modest positive revenue growth of 4.5% YoY in cyclical electronics sector
- Healthy liquidity with current ratio of 2.64x and quick ratio of 1.53x
- Substantial cash reserves of $479.4M providing financial cushion and flexibility
Risks
- Negative free cash flow of -$47M with capex ($110.7M) unsustainably exceeding operating cash flow ($63.7M)
- Critically thin margins (2.6% operating, 0.9% net) generating only $7.2M net income on $839.2M revenue
- Abysmal capital efficiency with ROE of 0.3% and ROA of 0.2%, combined with weak interest coverage of 1.7x limiting debt service capacity
Key Metrics to Watch
- Free cash flow trajectory and operating cash flow sustainability relative to capex
- Operating and net margin expansion demonstrating profitability improvement
- Return on equity and return on invested capital trends indicating capital allocation effectiveness
Financial Metrics
Revenue
839.2M
Net Income
7.2M
EPS (Diluted)
$0.05
Free Cash Flow
-47.0M
Total Assets
4.3B
Cash
479.4M
Profitability Ratios
Gross Margin
21.0%
Operating Margin
2.6%
Net Margin
0.9%
ROE
0.3%
ROA
0.2%
FCF Margin
-5.6%
Balance Sheet & Liquidity
Current Ratio
2.64x
Quick Ratio
1.53x
Debt/Equity
0.47x
Debt/Assets
51.3%
Interest Coverage
1.68x
Long-term Debt
983.1M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-15T10:23:59.108758 |
Data as of: 2026-04-04 |
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