Frequency Electronics, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Frequency Electronics delivered a sharp Q1 FY2027 inflection — record revenue of $23.5M up 70% year-over-year, operating income of $5.2M, and EPS of $0.41 versus estimates of $0.15 — but this follows a weak FY2026 where revenue fell 9.4% and gross margin compressed from 43.1% to 29.1%.
The stock has pulled back to $65.18 with an RSI of 32.79, trading below its 50-day MA of $74.39 but above the 200-day MA of $61.93, yet still carries a PE of 260.72 versus a peer median of 62.18. Net insider selling of $37.4M over 24 months, dominated by Edenbrook Capital's exit at $57.50, and a near-zero smart money score of 0.00 temper enthusiasm despite the operational turnaround. The inflection is real but unproven over multiple quarters, and the valuation leaves little room for error.
What could go wrong
- Valuation compression. PE of 260.72 and EV/EBITDA of 272.03 are 319% and 584% above peer medians respectively; any disappointment in subsequent quarters could trigger a sharp de-rating from already-elevated multiples.
- Insider selling overhang. Net insider dispositions of 648,431 shares worth $37.4M over 24 months, including Edenbrook Capital's $37.5M sale at $57.50 in July 2026, signal that key holders are exiting near current levels.
- Margin volatility. FY2026 gross margin collapsed to 29.1% from 43.1% in FY2025, and Q4 FY2026 gross profit was just $152K on $15.4M revenue, demonstrating how quickly profitability can deteriorate on contract mix.
- Single-quarter evidence. The strong Q1 FY2027 result follows four quarters of declining or negative EPS surprises; one beat does not establish a sustained trend.
What would change my mind
Where this comes from: Q1 FY27 results · earnings vs estimates, 10 Sep · FY25 and FY26 fundamentals · technicals, 16 Oct. Orin's read on FEIM; not advice.
How has the share price moved?
Up 92.1% over twelve months, from $36.81 on 27 Oct 2025 to $70.72 at the Tue 27 Oct 2026 close. Its highest close in that time was $89.00 on 21 Sep 2026; the last close is 20.5% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 2.0M, on 29 Jul 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All FEIM filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $34.3M | 0.0% |
| Vanguard Capital Management | $19.4M | 0.0% |
| Goldman Sachs Group | $13.6M | 0.0% |
| G2 Investment Partners Management | $13.4M | 2.4% |
| Geode Capital Management | $11.8M | 0.0% |
| Portolan Capital Management | $10.1M | 0.4% |
| State Street | $9.1M | 0.0% |
| Morgan Stanley | $7.6M | 0.0% |
| Vanguard Portfolio Management | $5.4M | 0.0% |
| Invesco | $5.2M | 0.0% |
34 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 16 Form 4 filings; open-market trades net −$37.4M. Of the 16 on hand, 3 were open-market purchases and 2 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about FEIM
Orin answers questions about FEIM from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 283× its last 12 months of profit (Tue 27 Oct close) — above its usual level (11.9×); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 283×above usual | 11.9× | 46.1× |
| P/S | 10.9× | — | — |
| EV/EBITDA | 297×above usual | 11.5× | — |
| P/B | 6.0× | — | — |
- P/S: no usual level — it ran from 1.49× to 7.76× over its last 5 fiscal years, so a middle value says little.
- P/B: no usual level — it ran from 1.6× to 8.7× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
Few analysts publish on it: 2 firms rated it in the last 18 months. The 12-month price targets on file average $43.67 (from $42 to $46) — 38% below the Tue 27 Oct close price. With so few, it is not a consensus; it is their published opinion, not Orin's.
$43.67
$42 – $46 · −38% against the last close
- 0 buy or overweight
- 2 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 283× its last 12 months of profit; the middle P/E of the 4 companies it is compared to that made a profit is 41.8×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| FEIMFrequency Electronics, Inc. | $797M | 283× | 297× | 33.0% | 3.7% | 4% |
| KNKnowles Corporation | $3B | 40.6× | 22.0× | 42.6% | 10.8% | 9% |
| MPTIM-tron Industries, Inc. | $300M | 23.5× | 15.3× | 44.3% | 16.3% | 13% |
| MTSIMACOM Technology Solutions Holdings, Inc. | $15B | 43.1× | 32.5× | 58.0% | 25.3% | 22% |
| SITMSiTime Corporation | $11B | 362× | 196× | 56.2% | 3.9% | 2% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 283× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now283×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $4 a share — 94% below the $70.64 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Levered | $4 | 94% below $70.64 |
- Standard: comes out below zero, so it is not shown.
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.