On Wednesday, Vicor (NASDAQ:VICR) Corporation (NASDAQ: VICR) received a reiterated Hold rating from Needham, following the company's release of its second-quarter financial results for 2024. Vicor's revenue for the quarter exceeded expectations, but earnings were impacted by a 400 basis point sequential decline in gross margin (GM) and the setting aside of litigation-contingency reserves.
The company's management has chosen not to provide financial guidance at this time, citing the pending outcome of litigation as a factor that clouds the near-term outlook. However, with the International Trade Commission (ITC) expected to make an initial determination in early October, clarity for the company's management is anticipated soon.
Vicor's book-to-bill ratio (B2B) surpassed 1.0 for the first time in two years, signaling robust demand, particularly in the aerospace and defense (A&D) and industrial sectors. This positive development suggests a strengthening order book that could bode well for future revenue.
The company also remains on schedule with its Generation 5 (Gen 5) products, which are set to begin sampling in August and are expected to see a production ramp in the second half of 2025. Moreover, a lead customer is anticipated to begin ramping up in the first half of 2025. Vicor also announced a new onboard charger (OBC) automotive win, with production expected to ramp up in 2026.
Considering these developments, Needham has made a slight adjustment to its calendar year 2025 estimates for Vicor, factoring in a more gradual initial ramp-up for the Gen 5 products. This cautious outlook reflects the uncertainties and potential opportunities that lie ahead for the company in the coming year.
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