Vicor Corporation, a company specializing in modular power components and systems, has caught the attention of investors with its bullish thesis presented by Crussian17 on X.com. As of December 2nd, VICR’s shares were trading at $91.14, with trailing and forward P/E ratios of 49.30 and 46.08 respectively according to Yahoo Finance.
The company, based in Massachusetts, boasts over $1 billion in U.S. manufacturing capacity, $360 million in cash, and a debt-free balance sheet, providing it with significant financial flexibility. Management recently revealed that VICR had secured a major hyperscaler contract, with ramping expected in Q1 followed by two OEMs in Q3 next year. This upcoming revenue step-up has not yet been factored into current estimates, indicating potential for significant growth.
In addition to its core business, VICR generates high-margin licensing revenue, currently at a $90 million annual run rate, with projections to reach $200 million over the next two years. The company also owns valuable intellectual property assets that could further enhance its monetization potential. Despite a $500 million revenue base, VICR’s EV of $2 billion suggests undervaluation relative to its growth prospects and profitability.
Operationally, VICR has addressed historical yield issues and achieved 98% efficiency, with plans to fully utilize its underfilled factory capacity to further improve margins. Estimates for the next year remain conservative and do not yet account for the impact of new large customers or licensing growth.
With a small free float of 22 million shares and the founder CEO owning approximately half the company, VICR is positioned for outsized moves on positive developments, similar to other high-IP tech plays like ARM. Its strong cash position, IP portfolio, vertical integration, and concentrated ownership make it an attractive M&A candidate, offering multiple potential catalysts for significant value creation.
In comparison to a previous bullish thesis on Monolithic Power Systems, Inc. (MPWR), VICR stands out for its vertical integration, licensing growth, and upcoming hyperscaler and OEM ramp. While MPWR has seen a 69.47% appreciation since coverage, VICR presents a compelling investment opportunity with strong fundamentals and growth potential. Investors may want to consider adding VICR to their portfolios for long-term growth and value creation.
