What Happened?
Shares of power conversion and control solutions provider Vicor Corporation (NASDAQ: VICR) jumped 18.8% in the afternoon session after the company reported second-quarter financial results that significantly beat Wall Street's expectations.
The company announced total revenues of $141.0 million, a 64.3% increase from the same period last year, which handily surpassed analyst forecasts. This revenue figure was boosted by product sales, licensing income, and a patent litigation settlement. The bottom line showed an even more dramatic turnaround. Vicor posted a net income of $41.2 million, or $0.91 per diluted share. This was a massive improvement from the net loss of $1.2 million, or $0.03 per share, reported in the corresponding quarter a year ago, and it crushed the consensus analyst estimate of $0.14 per share. The company's gross margin also expanded significantly to 65.3%, up from 49.8% in the prior-year period, reflecting improved profitability. The blowout quarter demonstrated strong demand and operational efficiency, fueling investor optimism.
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What Is The Market Telling Us
Vicor’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. But moves this big are rare even for Vicor and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 25.4% on the news that the company delivered exceptional fourth-quarter 2024 results, which blew past analysts' sales and earnings estimates. Sales grew 3.8% over the previous year, driven by higher royalty revenue, which nearly doubled from the prior year, offsetting a decline in product sales. Net income rose significantly, leading to an EPS beat, but sequentially, earnings dipped as operating costs grew. Zooming out, we think this was a good quarter with some key areas of upside.
Vicor is up 9.2% since the beginning of the year, but at $52.64 per share, it is still trading 18.7% below its 52-week high of $64.71 from February 2025. Investors who bought $1,000 worth of Vicor’s shares 5 years ago would now be looking at an investment worth $722.32.
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