NYSE:VPG
Vishay Precision Group, Inc.
VPG is a premier manufacturer of high-precision electronic components serving critical industries like aerospace and industrial automation.
Key Metrics
Investment Thesis
Bull Case
VPG offers an attractive entry point for value investors given its strong balance sheet with $87.4M in cash and equivalents against manageable long-term debt of $20.6M. The transition to a stable revenue base near $307M combined with consistent positive operating cash flow suggests the stock may be undervalued relative to its core manufacturing capabilities.
Bear Case
Investors should avoid this stock due to the persistent decline in both top-line revenue and net income over the last five years, which indicates a failing growth trajectory. The substantial retained earnings deficit of $197.3M alongside negative other non-operating income adjustments points to underlying profitability issues that have not yet been resolved.
About Vishay Precision Group, Inc.
Vishay Precision Group (VPG) designs, manufactures, and sells high-performance electronic components including thin-film resistors, wirewound resistors, and precision capacitors for industrial, automotive, and aerospace markets. The company leverages its legacy expertise in analog electronics to serve demanding applications requiring extreme stability and reliability. Its product portfolio focuses on niche segments where performance specifications exceed those of standard commodity parts.
Analysis
Management Discussion
Despite generating positive operating cash flow of $14.4M, the company's net income has contracted sharply from $36.6M in 2022 to just $5.3M in 2025, reflecting a challenging pricing environment or margin compression. Total revenue decreased from $362.6M in 2022 to $307.2M last year, signaling a structural headwind that management must address through cost optimization or market expansion.
Industry Overview
The global precision passive components market is characterized by high barriers to entry due to the specialized equipment and process knowledge required for manufacturing resistors and capacitors. While demand remains steady in industrial automation, the sector faces headwinds from shifting supply chains toward near-shore production and increased price sensitivity among end-users.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $362.6M | $355.0M | $306.5M | $307.2M |
| Cost of Revenue | $213.0M | $204.7M | $181.0M | $187.8M |
| Gross Profit | $149.6M | $150.3M | $125.5M | $119.4M |
| Operating Expenses | $105.8M | $108.4M | $108.7M | $105.6M |
| Operating Income | $43.8M | $42.0M | $16.9M | $13.8M |
| R&D | $19.8M | $20.4M | $20.0M | $20.8M |
| G&A | $104.3M | $106.8M | $107.5M | $35.4M |
| Stock-Based Comp | $2.4M | $2.3M | $971.0K | $1.8M |
| D&A | $15.4M | $15.6M | $15.8M | $15.9M |
| Depreciation | $11.5M | $11.8M | $12.0M | $12.0M |
| Amortization | $3.9M | $3.8M | $3.8M | $3.9M |
| Other OpEx | $-18.3M | $-18.8M | $-18.8M | $49.4M |
| Non-Operating Income | $1.3M | $-3.5M | $700.0K | $-5.1M |
| Interest Expense | $2.3M | $4.0M | — | — |
| Interest Income | $401.0K | $1.7M | $1.7M | $1.7M |
| Pre-Tax Income | $45.1M | $38.4M | $17.6M | $8.8M |
| Income Tax | $8.5M | $12.4M | $7.7M | $3.5M |
| Continuing Ops | $36.6M | $26.0M | $9.8M | $5.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $36.6M | $26.0M | $9.8M | $5.3M |
| Minority Interest | $490.0K | $303.0K | $-77.0K | $49.0K |
| Net to Common | $36.1M | $25.7M | $9.9M | $5.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $251.8M | $243.1M | $236.9M | $247.0M |
| Cash & Equivalents | $88.6M | $84.0M | — | $87.4M |
| Marketable Securities | — | — | — | $0 |
| Accounts Receivable | $60.1M | $56.4M | $51.2M | $56.3M |
| Inventory | $84.7M | $88.1M | $84.2M | $82.8M |
| Prepaid Expenses | $18.5M | $14.5M | $17.1M | $20.4M |
| Other Current Assets | $0 | $0 | $84.5M | $0 |
| Long-Term Assets | $224.9M | $228.5M | $214.0M | $208.9M |
| PP&E (Net) | $87.1M | $90.6M | $79.5M | $76.1M |
| Intangibles | $48.2M | $44.6M | $41.8M | $38.2M |
| Goodwill | $45.5M | $45.7M | $46.8M | $47.4M |
| Operating Leases | $24.3M | $27.0M | $24.3M | $22.9M |
| Other LT Assets | $19.7M | $20.5M | $21.5M | $24.4M |
| Total Assets | $476.7M | $471.6M | $450.9M | $455.9M |
| Current Liabilities | $64.3M | $61.6M | $53.0M | $55.3M |
| Accounts Payable | — | — | — | $10.5M |
| Current Leases | $4.2M | $4.0M | $4.0M | $4.3M |
| Taxes Payable | $4.1M | $4.5M | $880.0K | $0 |
| Other Current Liab | $35.8M | $30.7M | $28.4M | $40.4M |
| Long-Term Liabilities | $105.9M | $80.0M | $76.0M | $64.4M |
| Long-Term Debt | $60.8M | $31.9M | $31.4M | $20.6M |
| LT Operating Leases | $20.0M | $22.6M | $19.9M | $19.5M |
| Other LT Liab | $25.0M | $25.5M | $24.7M | $24.3M |
| Total Liabilities | $170.2M | $141.6M | $129.1M | $119.7M |
| Shareholders' Equity | $306.5M | $329.9M | $321.9M | $336.2M |
| Paid-In Capital | — | — | — | $204.4M |
| Retained Earnings | $156.4M | $182.1M | $192.0M | $197.3M |
| AOCI | $-40.9M | $-38.9M | $-48.9M | $-41.4M |
| Treasury Stock | $11.5M | $17.5M | $25.3M | — |
| Total L&E | $476.7M | $471.6M | $450.9M | $455.9M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $36.6M | $26.0M | $9.8M | $5.3M |
| Non-Cash Adjustments | $-32.0M | $27.8M | $17.2M | $3.3M |
| Working Capital Changes | $28.4M | $-7.9M | $-7.2M | $5.7M |
| Cash from Operations | $33.0M | $45.9M | $19.8M | $14.4M |
| Cash from Investing | $-20.8M | $-15.1M | $-12.9M | $2.9M |
| Share Buybacks | $2.7M | $5.9M | $7.8M | $0 |
| Cash from Financing | $-3.6M | $-35.9M | $-9.4M | $-11.4M |
| FX Effect | $-4.3M | $545.0K | $-2.2M | $2.2M |
| Net Change in Cash | $4.2M | $-4.6M | $-4.7M | $8.1M |
| Beginning Cash | $84.3M | $88.6M | $84.0M | $79.3M |
| Ending Cash | $88.6M | $84.0M | $79.3M | $87.4M |
Frequently Asked Questions
How does Vishay Precision Group, Inc. make money?
The company's revenue is driven primarily by its analog and precision passive component lines, specifically thin-film resistors and wirewound solutions which command higher margins due to specialized fabrication processes. Revenue streams also include custom-engineered capacitors and hybrid devices tailored for specific client requirements in defense and medical sectors.
What are the main risks for VPG?
Declining revenue trends over the past three years suggest exposure to cyclical industrial downturns or loss of market share to lower-cost competitors. The significant retained earnings deficit indicates potential historical capital allocation challenges that may pressure future growth and dividend sustainability. High concentration in specialized markets creates vulnerability if major aerospace or defense customers reduce spending or switch suppliers.
What is VPG's competitive advantage?
VPG maintains a strong moat through decades of accumulated know-how in precision analog technology, allowing it to dominate niche markets with strict tolerance requirements. The company benefits from a diversified global manufacturing footprint that mitigates supply chain disruptions while maintaining high barriers to entry for competitors lacking similar process capabilities.
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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.