Universal Electronics (UEIC, Financial) reported first-quarter revenue of $92.3 million, surpassing the consensus estimate of $91.99 million. The company's Chief Financial Officer highlighted the positive impact of sales growth in the connected home sector, which compensated for a downturn in their home entertainment segment. Looking ahead to the second quarter, similar trends are anticipated.
Over the past years, strategic research and development initiatives have been pivotal for UEIC, enabling expansion into new markets. This focus, along with a bolstered balance sheet and improved cost management, provides the company with strategic flexibility in capital allocation. Currently, UEIC has approximately 778,000 shares available for repurchase and plans to strategically buy back shares when market conditions are favorable.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Universal Electronics Inc (UEIC, Financial) is $13.67 with a high estimate of $15.00 and a low estimate of $12.00. The average target implies an upside of 122.95% from the current price of $6.13. More detailed estimate data can be found on the Universal Electronics Inc (UEIC) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, Universal Electronics Inc's (UEIC, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Universal Electronics Inc (UEIC, Financial) in one year is $10.73, suggesting a upside of 75.04% from the current price of $6.13. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Universal Electronics Inc (UEIC) Summary page.
UEIC Key Business Developments
Release Date: February 20, 2025
- Revenue: $110.5 million, a 13% increase over Q4 2023's $97.6 million.
- Gross Margin: 28.4% in Q4 2024 compared to 28.5% in Q4 2023.
- Operating Income: $4.2 million compared to $200,000 in Q4 2023.
- Net Income: $2.6 million or $0.20 per diluted share, compared to a net loss of $500,000 or $0.04 per share in Q4 2023.
- Operating Expenses: $27.2 million in Q4 2024 compared to $27.6 million in Q4 2023.
- SG&A Expenses: Reduced to $20.3 million from $21.1 million in the prior year quarter.
- R&D Expenses: Increased to $6.9 million from $6.5 million in Q4 2023.
- Cash and Cash Equivalents: $26.8 million as of December 30, 2024, compared to $42.8 million at December 31, 2023.
- Net Cash Provided by Operating Activities: $14.8 million for the year ending December 30, 2024.
- Net Debt Position: Approximately $10 million at year-end 2024.
- Guidance for Q1 2025: Expected sales range from $87 to $97 million, with a net loss ranging from $0.21 to $0.11 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Universal Electronics Inc (UEIC, Financial) reported a 13% increase in sales for Q4 2024 compared to the same quarter in 2023, exceeding their own projections and consensus.
- The company has successfully managed costs and optimized its manufacturing footprint, leading to improved profitability.
- UEIC's connected home business is gaining momentum with new products and increased orders, particularly in the climate control market.
- The company showcased innovative technologies at the International Consumer Electronics Show, receiving strong interest from new and existing customers.
- UEIC has reduced its outstanding line of credit by over $18 million in 2024, resulting in a net debt position of approximately $10 million at year-end.
Negative Points
- The company faces continued economic uncertainty affecting consumer confidence and spending, which could impact future financial results.
- Rising energy and freight costs, along with potential governmental actions such as increasing tariffs, pose risks to UEIC's business operations.
- Despite growth in the connected home market, the home entertainment channel still faces headwinds and ordering patterns are only stabilizing.
- The company's cash and cash equivalents decreased from $42.8 million at the end of 2023 to $26.8 million at the end of 2024.
- UEIC expects a net loss ranging from $0.21 to $0.11 per share for Q1 2025, indicating potential challenges in maintaining profitability in the short term.
