B.Riley raises VPG stock rating to Buy, sets $28.50 target

On Thursday, B.Riley analyst Josh Nichols upgraded Vishay Precision Group (NYSE:VPG) stock from Neutral to Buy, raising the price target to $28.50, up from the previous $24.50. The new target aligns closely with InvestingPro’s Fair Value analysis, which suggests the stock is currently undervalued. Nichols cited a potential early-stage recovery for the company, as recent order improvements suggest a positive shift in momentum.

Vishay Precision Group, which faced a challenging 2024, reported fourth-quarter earnings that fell short of expectations. The company’s revenue for the quarter was $73 million, a 19% decrease year-over-year and slightly below both the analyst’s and consensus estimate of $74 million. This decline aligns with InvestingPro data showing a 10.6% revenue decline over the last twelve months. Despite the company’s guidance ranging from $70 million to $78 million, EBITDA for the quarter was reported at $5.1 million, equivalent to a 7.0% margin, which also did not meet the consensus estimate of $6.9 million or B.Riley’s expectation of $7 million. The shortfall included approximately $0.7 million in one-time costs, primarily associated with research and development projects and operational fixed expenses.

Despite the lower-than-anticipated results, Nichols pointed out that orders had increased by 5.7% quarter-over-quarter. This marked the first time the company has seen sequential growth after six quarters of decline. Additionally, the book-to-bill ratio, a key indicator of future revenue, improved year-over-year from 0.84x to 1.00x. InvestingPro analysis reveals the company maintains strong financial health with an impressive current ratio of 4.41, indicating robust liquidity to support its recovery.

The analyst’s optimism is further bolstered by Vishay Precision Group’s current trading price, which is below the company’s book value of over $24 per share, confirmed by InvestingPro’s price-to-book ratio of 0.92. Nichols believes that the recent uptick in orders, coupled with what are considered to be favorable comparisons in the second half of 2025, could position the company for a return to year-over-year growth. This positive outlook has led to the upgraded stock rating and increased price target for Vishay Precision Group. For deeper insights into VPG’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Vishay Precision Group Inc . reported their fourth-quarter 2024 earnings, revealing a significant miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.03, falling short of the expected $0.21. Revenue also came in lower than anticipated at $72.65 million, compared to the forecasted $74.18 million. These results reflect recent developments in the company’s financial performance.

Vishay Precision Group’s Q4 2024 performance was marked by a decline in key financial metrics compared to previous expectations. The company’s revenue for the full year reached $306.5 million, with Q4 contributing $72.7 million. The adjusted gross margin decreased to 38.3% from 40% in the third quarter, indicating pressure on profitability. Despite these challenges, VPG continues to focus on business development projects, which contributed $18 million in revenue during the year.

Looking ahead, Vishay Precision Group has set a revenue guidance range of $70-76 million for Q1 2025. The company anticipates an acceleration in orders during the second half of the year and targets $30 million in business development revenue for 2025. Additionally, VPG plans to implement $5 million in annual cost reductions and has projected a capital expenditure of $10-12 million for 2025.

Analysts have noted the company’s earnings for Q4 2024 fell short of their expectations, with actual EPS of $0.03 versus the forecasted $0.21, marking a surprise percentage of -85.7%. Revenue was also below estimates at $72.65 million against a forecast of $74.18 million, reflecting a miss of approximately 2.1%.

Finally, CFO Bill Clancy expressed optimism about the company’s business development initiatives and CEO Ziv Shoshani highlighted a cautious outlook for the first half of 2025, emphasizing the importance of cost-saving measures.

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