Vishay Precision (VPG)

Precision measurement and sensing technologies provider Vishay Precision (NYSE:VPG) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 5.3% year on year to $79.73 million. The company expects next quarter’s revenue to be around $78 million, close to analysts’ estimates. Its non-GAAP profit of $0.26 per share was 30% above analysts’ consensus estimates.

Company Overview

Emerging from Vishay Intertechnology in 2010, Vishay Precision (NYSE:VPG) operates as a global provider of precision measurement and sensing technologies.

Like many equipment and component manufacturers, electronic components companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include data centers and telecommunications, which can benefit companies whose optical and transceiver offerings fit those markets. But like the broader industrials sector, these companies are also at the whim of economic cycles. Consumer spending, for example, can greatly impact these companies’ volumes.

Competitors of Vishay Precision include Measurement Specialties (NASDAQ:MEAS), Mettler-Toledo International (NYSE:MTD), and Ametek (NYSE:AME).

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Vishay Precision grew its sales at a sluggish 2.6% compounded annual growth rate. This was below our standards and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Vishay Precision’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 9% annually. Vishay Precision isn’t alone in its struggles as the Electronic Components industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

This quarter, Vishay Precision reported year-on-year revenue growth of 5.3%, and its $79.73 million of revenue exceeded Wall Street’s estimates by 4%. Company management is currently guiding for a 7.4% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector.

Cost of sales for an industrials business is usually comprised of the direct labor, raw materials, and supplies needed to offer a product or service. These costs can be impacted by inflation and supply chain dynamics.

Vishay Precision’s unit economics are great compared to the broader industrials sector and signal that it enjoys product differentiation through quality or brand. As you can see below, it averaged an excellent 41% gross margin over the last five years. Said differently, roughly $40.97 was left to spend on selling, marketing, R&D, and general administrative overhead for every $100 in revenue.

Vishay Precision produced a 40.3% gross profit margin in Q3, in line with the same quarter last year. On a wider time horizon, Vishay Precision’s full-year margin has been trending down over the past 12 months, decreasing by 2.8 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs (such as raw materials and manufacturing expenses).

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Vishay Precision has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 9.9%, higher than the broader industrials sector.

Looking at the trend in its profitability, Vishay Precision’s operating margin decreased by 5.5 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q3, Vishay Precision generated an operating margin profit margin of 12.7%, up 7.6 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Vishay Precision, its EPS declined by 15.3% annually over the last five years while its revenue grew by 2.6%. We can see the difference stemmed from higher interest expenses or taxes as the company actually improved its operating margin and repurchased its shares during this time.

Diving into the nuances of Vishay Precision’s earnings can give us a better understanding of its performance. As we mentioned earlier, Vishay Precision’s operating margin expanded this quarter but declined by 5.5 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Vishay Precision, its two-year annual EPS declines of 53.7% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q3, Vishay Precision reported adjusted EPS of $0.26, up from $0.19 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Vishay Precision’s full-year EPS of $0.50 to grow 132%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Vishay Precision has shown mediocre cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 4.9%, subpar for an industrials business.

Vishay Precision burned through $3.45 million of cash in Q3, equivalent to a negative 4.3% margin. The company’s cash burn was similar to its $2.62 million of lost cash in the same quarter last year. These numbers deviate from its longer-term margin, indicating it is a seasonal business that must build up inventory during certain quarters.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Vishay Precision historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 9.1%, somewhat low compared to the best industrials companies that consistently pump out 20%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Vishay Precision’s ROIC has decreased over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

Vishay Precision is a profitable, well-capitalized company with $86.25 million of cash and $43.83 million of debt on its balance sheet. This $42.42 million net cash position is 8.4% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

It was good to see Vishay Precision beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $38.01 immediately following the results.

Updated: December 3, 2025 at 10:21 PM EST

Are you wondering whether to buy Vishay Precision or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

We see the value of companies helping their customers, but in the case of Vishay Precision, we’re out. For starters, its revenue growth was weak over the last five years. And while its projected EPS for the next year implies the company’s fundamentals will improve, the downside is its diminishing returns show management's prior bets haven't worked out. On top of that, its declining EPS over the last five years makes it a less attractive asset to the public markets.

Vishay Precision’s P/E ratio based on the next 12 months is 37x. This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $41 on the company (compared to the current share price of $36.74).