Nasdaq:UFPT
UFP TECHNOLOGIES INC
A premier manufacturer of advanced electric motors and power electronics driving efficiency in global heavy industry and renewable energy markets.
Key Metrics
Investment Thesis
Bull Case
Investors should consider this stock due to its consistent revenue growth trajectory, expanding from $353.8M in 2022 to over $600M recently, which signals strong demand for industrial automation. The company's substantial goodwill and intangible assets indicate a portfolio of valuable proprietary technologies that likely drive future pricing power and recurring service revenue streams.
Bear Case
Potential downside risks include the massive retained earnings deficit of $374.8M, which suggests historical capital depletion or aggressive share buybacks that limit financial flexibility. High levels of long-term debt at $123.0M combined with negative investing cash flows could constrain future expansion capabilities if the industrial cycle reverses.
About UFP TECHNOLOGIES INC
UFP Technologies Inc. is a leading provider of industrial automation solutions, specializing in high-performance electric motors, drives, and power electronics for global manufacturing sectors including automotive, aerospace, and energy. The company leverages its proprietary technology to deliver precision control systems that optimize efficiency and performance across diverse industrial applications worldwide.
Analysis
Management Discussion
UFP Technologies demonstrated robust financial strength in 2025, generating $68.3M in net profit on $602.8M of revenue, reflecting a healthy margin expansion trend from previous years. The company successfully navigated working capital dynamics with strong cash flow from operations of $91.9M, though significant financing outflows of $58.2M suggest active debt restructuring or share repurchase programs.
Industry Overview
The global industrial automation sector is undergoing a massive transition toward electrification and digitalization, creating unprecedented demand for high-efficiency electric motors and smart drive systems. This shift is driven by stringent energy regulations and the urgent need to modernize aging infrastructure in heavy industries like mining, steel, and oil & gas.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $353.8M | $400.1M | $504.4M | $602.8M |
| Cost of Revenue | $263.5M | $287.8M | $357.7M | $432.4M |
| Gross Profit | $90.3M | $112.2M | $146.7M | $170.4M |
| Operating Expenses | $34.9M | $54.6M | $65.8M | $78.1M |
| Operating Income | $55.4M | $57.7M | $80.9M | $92.3M |
| R&D | $9.3M | $7.2M | $10.4M | $8.6M |
| G&A | $45.8M | $50.9M | $62.2M | $77.4M |
| Stock-Based Comp | $3.2M | $4.6M | $6.8M | $8.9M |
| D&A | $11.9M | $11.4M | $14.7M | $19.1M |
| Amortization | $4.4M | $4.4M | $6.7M | $9.8M |
| Other OpEx | $-20.2M | $-3.5M | $-6.8M | $-8.0M |
| Non-Operating Income | $-2.7M | $-3.8M | $-7.9M | $-9.8M |
| Interest Expense | $2.8M | $3.6M | $8.1M | — |
| Pre-Tax Income | $52.7M | $53.9M | $73.0M | $82.5M |
| Income Tax | $10.9M | $9.0M | $14.0M | $14.2M |
| Continuing Ops | $41.8M | $44.9M | $59.0M | $68.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $41.8M | $44.9M | $59.0M | $68.3M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $41.8M | $44.9M | $59.0M | $68.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $116.3M | $144.6M | $194.9M | $201.0M |
| Cash & Equivalents | $4.5M | $5.3M | $13.4M | $20.3M |
| Accounts Receivable | $55.1M | $64.4M | $84.7M | $82.9M |
| Inventory | $53.5M | $70.2M | $87.5M | $86.9M |
| Other Current Assets | $3.2M | $4.7M | $9.3M | $10.9M |
| Long-Term Assets | $261.8M | $259.5M | $434.1M | $454.1M |
| PP&E (Net) | $58.1M | $62.1M | $70.6M | $79.1M |
| Intangibles | $68.4M | $64.1M | $144.3M | $140.8M |
| Goodwill | $113.0M | $113.3M | $189.7M | $197.4M |
| Operating Leases | — | — | $16.1M | $18.8M |
| Other LT Assets | $22.4M | $20.0M | $6.7M | $10.9M |
| Total Assets | $378.2M | $404.1M | $629.0M | $655.1M |
| Current Liabilities | $56.0M | $58.2M | $76.3M | $74.9M |
| Accounts Payable | $20.0M | $22.3M | $24.3M | $24.3M |
| Current Debt | $4.0M | $4.0M | $12.5M | $12.5M |
| Current Leases | — | — | $4.2M | $5.0M |
| Deferred Revenue | $4.7M | $6.6M | $4.7M | $4.2M |
| Taxes Payable | $1.7M | $0 | $223.0K | $0 |
| Other Current Liab | $2.5M | $3.2M | $61.0K | $32.0K |
| Long-Term Liabilities | $84.7M | $59.8M | $209.9M | $156.3M |
| Long-Term Debt | $51.0M | $28.0M | $176.9M | $123.0M |
| LT Operating Leases | — | — | $12.4M | $14.0M |
| Other LT Liab | $33.7M | $31.8M | $20.7M | $19.4M |
| Total Liabilities | $140.6M | $118.0M | $286.2M | $231.2M |
| Shareholders' Equity | $237.5M | $286.1M | $342.8M | $423.9M |
| Paid-In Capital | $36.1M | $38.8M | $40.9M | $45.9M |
| Retained Earnings | $202.6M | $247.5M | $306.5M | $374.8M |
| AOCI | $-610.0K | $268.0K | $-4.2M | $3.7M |
| Treasury Stock | $587.0K | $587.0K | $587.0K | — |
| Total L&E | $378.2M | $404.1M | $629.0M | $655.1M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $41.8M | $44.9M | $59.0M | $68.3M |
| Non-Cash Adjustments | $-81.1M | $-33.7M | $10.4M | $36.4M |
| Working Capital Changes | $57.0M | $30.1M | $-2.8M | $-12.8M |
| Cash from Operations | $17.7M | $41.3M | $66.6M | $91.9M |
| Capital Expenditures | $13.8M | $10.5M | $9.7M | — |
| Cash from Investing | $1.3M | $-10.5M | $-210.2M | $-27.6M |
| Debt Issuances | $0 | $0 | $125.0M | $0 |
| Debt Repayments | $4.0M | $4.0M | $35.1M | $12.5M |
| Cash from Financing | $-25.9M | $-30.0M | $152.4M | $-58.2M |
| FX Effect | $193.0K | $-10.0K | $-635.0K | $699.0K |
| Net Change in Cash | $-6.7M | $812.0K | $8.2M | $6.9M |
| Beginning Cash | $11.1M | $4.5M | $5.3M | $13.4M |
| Ending Cash | $4.5M | $5.3M | $13.4M | $20.3M |
Frequently Asked Questions
How does UFP TECHNOLOGIES INC make money?
Revenue is primarily generated through sales of custom-engineered electric motors, variable frequency drives, and integrated motion control systems for large-scale industrial machinery. The company serves major markets including automotive production lines, aerospace propulsion systems, and wind turbine generation equipment where reliability and precision are paramount.
What are the main risks for UFPT?
Concentrated exposure to cyclical capital goods industries makes revenue sensitive to global economic downturns and manufacturing slowdowns. The company faces ongoing pressure from rising raw material costs, particularly rare earth metals used in motor production, which could marginally compress profitability if not hedged effectively. Intense competition from low-cost manufacturers in emerging markets threatens market share in commoditized segments of the business.
What is UFPT's competitive advantage?
The firm holds a strong moat through deep proprietary IP in motor design and power electronics, allowing it to command premium pricing in specialized industrial niches. Its extensive global manufacturing footprint and long-standing relationships with top-tier OEMs provide significant barriers to entry for new competitors seeking scale.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.