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olivLaw · US equity research

Espey Mfg. & Electronics Corp. ESP

Electronic Components, NEC · SIC 3679 · Vertical: Electronic Components, NEC (SIC 3679)

50.27USD−3.07% · 1 dayClose 04 Nov 2026

Espey Mfg. & Electronics Corp. designs and manufactures power supplies, converters, transformers and power distribution equipment for demanding military and industrial uses, from its plant in Saratoga Springs, New York. Net sales reached 46.1 million USD in fiscal 2026, and a backlog of 134.9 million USD gives visibility over several years, although the company could remain dependent on US defence budgets.

At the close of 04 Nov 2026, Espey Mfg. & Electronics Corp. (ESP) stock was 50.27 USD (−3.07% on the day), with market capitalisation 152.7 m USD, P/E 12.9 on diluted EPS of 3.89 USD over the last 12 months, dividend yield 3.48%, beta 0.62, 52-week range 37.20–72.22 USD. Latest reported quarter (Q4 2026): revenue of 13.5 m USD (+40.4% YoY), net income of 3.3 m USD (+13.9% YoY), diluted EPS 1.15 USD.

Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.

Market cap
152.7 m USD
shares as of 15 Sept 2026
P/E (TTM)
12.9
Diluted EPS TTM 3.89 · TTM to 30 Jun 2026
E/P (TTM)
7.74%
TTM to 30 Jun 2026
Dividend yield
3.48%
DPS 12m 1.75
Beta (2y)
0.62
Volatility (1y) 46%
52-week range
37.2072.22

Price history

Loading chart…

Technical reading

RSI (14)
29.9
oversold (≤ 30)
Bollinger (20, 2)
49.22 – 60.31
in the lower half of the band · %B 0.09 · band width 20.2%
SMA 50 / 200
59.81 / 60.25
downtrend (price < SMA50 < SMA200)
MACD (12, 26, 9)
-2.39 / -2.27
MACD below signal

Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).

Performance

CompanyS&P 500vs S&P 500Vertical median
1 month−18.8%−1.1%−17.7 pp—
3 months−18.1%−0.5%−17.6 pp—
6 months−28.8%+4.4%−33.2 pp—
Year to date+6.7%+12.3%−5.7 pp—
1 year+31.0%+13.5%+17.4 pp+9.6%
3 years+193.5%+76.4%+117.1 pp+31.5%
5 years+240.4%+63.7%+176.7 pp—
Max drawdown (1y)
−30.4%
12 May 2026 → 04 Nov 2026
Max drawdown (5y)
−34.6%
19 Apr 2023 → 16 Oct 2023
Compound annual growth (5y)
+27.8%
S&P 500 +10.4%

Price returns, dividends excluded.

Quarterly results

Latest quarter: Q4 2026 · 30 Jun 2026

Revenue
13.5 m USD
+40.4% YoY
Net income
3.3 m USD
+13.9% YoY
Diluted EPS
1.15
+9.5% YoY
net / operating
24.8% / 25.8%

Quarterly margins

Quarterly statements · USD

Fiscal yearQ1 '25Q2 '25Q3 '25Q4 '25Q1 '26Q2 '26Q3 '26Q4 '26
Revenue10.4 m13.6 m10.3 m9.6 m9.1 m12.1 m11.4 m13.5 m
Cost of revenue7.6 m10.4 m7.4 m5.8 m5.9 m7.9 m7.2 m8.8 m
Gross profit2.8 m3.2 m2.9 m3.8 m3.2 m4.2 m4.2 m4.6 m
SG&A1.1 m1.1 m1.2 m1.1 m1.2 m1.1 m1.2 m1.2 m
Operating income1.7 m2.0 m1.8 m2.6 m2.1 m3.1 m3.0 m3.5 m
Pre-tax income2.0 m2.3 m2.1 m3.4 m2.6 m3.5 m3.4 m3.9 m
Income tax399.3 k384.4 k382.9 k419.1 k387.7 k710.7 k526.8 k510.4 k
Net income1.6 m1.9 m1.7 m2.9 m2.2 m2.8 m2.9 m3.3 m
Diluted EPS0.610.710.631.050.760.990.991.15
Operating cash flow1.4 m5.4 m ≈11.5 m ≈2.8 m5.7 m-2.8 m ≈3.4 m ≈-606.6 k
Capex664.4 k883.6 k ≈961.2 k ≈1.9 m1.3 m1.3 m ≈188.7 k ≈307.9 k
Dividends paid633.2 k645.8 k ≈649.7 k ≈668.6 k2.7 m686.9 k ≈699.2 k ≈703.2 k

≈ derived quarter (cumulative difference / share-days average)

E/P over time

E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.

Today's P/E sits at the 25 percentile of its own 36-quarter history (min 9.3, median 21.1, max 236.8; quarters with earnings only).

Fiscal years

Fiscal year20192020202120222023202420252026
Revenue36.5 m31.5 m27.7 m32.1 m35.6 m38.7 m44.0 m46.1 m
Revenue YoY+12.2%−13.6%−12.0%+15.8%+10.9%+8.8%+13.5%+4.9%
Net income2.3 m1.2 m-181.5 k1.3 m3.7 m5.8 m8.1 m11.2 m
Net income YoY−23.8%−50.3%−115.6%unavailable+190.7%+58.1%+40.0%+37.3%
Diluted EPS0.980.49-0.080.521.492.293.023.89
Diluted EPS YoY−25.2%−50.0%−116.3%unavailable+186.5%+53.7%+31.9%+28.8%
net %6.4%3.7%-0.7%3.9%10.3%15.0%18.5%24.2%
Free cash flow-4.2 m5.8 m551.4 k1.9 m3.4 m5.4 m16.6 m2.6 m

Reported results vs expectations

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Balance sheet & financial health

Fiscal year 2026 · 30 Jun 2026

Cash
19.4 m USD
Financial debt
unavailable USD
Net debt
unavailable USD
Equity
60.6 m USD
Total assets
97.2 m USD
Debt / equity
unavailable
Current ratio
2.50x
ROE
20.1%
ROA
12.7%
FCF margin
5.6%

Financial statements (source on every figure)

Revenue and net income (USD)

Margins

Income statement · USD

Revenue
2024
38.7 m
2025
44.0 m
2026
46.1 m

SEC (XBRL)· 23 Sept 2026verified

Cost of revenue
2024
28.1 m
2025
31.3 m
2026
29.8 m

SEC (XBRL)· 23 Sept 2026verified

Gross profit
2024
10.7 m
2025
12.7 m
2026
16.3 m

SEC (XBRL)· 23 Sept 2026verified

SG&A
2024
4.1 m
2025
4.6 m
2026
4.7 m

SEC (XBRL)· 23 Sept 2026verified

Operating income
2024
6.5 m
2025
8.1 m
2026
11.6 m

SEC (XBRL)· 23 Sept 2026verified

Pre-tax income
2024
7.3 m
2025
9.7 m
2026
13.3 m

SEC (XBRL)· 23 Sept 2026verified

Income tax
2024
1.5 m
2025
1.6 m
2026
2.1 m

SEC (XBRL)· 23 Sept 2026verified

Net income
2024
5.8 m
2025
8.1 m
2026
11.2 m

SEC (XBRL)· 23 Sept 2026verified

Diluted EPS
2024
2.29
2025
3.02
2026
3.89

SEC (XBRL)· 23 Sept 2026verified

Weighted average diluted shares
2024
2.5 m
2025
2.7 m
2026
2.9 m

SEC (XBRL)· 23 Sept 2026verified

Dividend per share
2024
0.68
2025
1.00
2026
1.75

SEC (XBRL)· 23 Sept 2026verified

Balance sheet · USD

Cash
2024
4.4 m
2025
18.9 m
2026
19.4 m

SEC (XBRL)· 23 Sept 2026verified

Receivables
2024
6.6 m
2025
7.6 m
2026
9.0 m

SEC (XBRL)· 23 Sept 2026verified

Inventories
2024
19.2 m
2025
17.8 m
2026
26.0 m

SEC (XBRL)· 23 Sept 2026verified

Current assets
2024
53.2 m
2025
74.0 m
2026
91.3 m

SEC (XBRL)· 23 Sept 2026verified

Property, plant & equipment, net
2024
3.3 m
2025
4.0 m
2026
4.5 m

SEC (XBRL)· 23 Sept 2026verified

Total assets
2024
56.5 m
2025
79.1 m
2026
97.2 m

SEC (XBRL)· 23 Sept 2026verified

Accounts payable
2024
3.8 m
2025
2.6 m
2026
3.4 m

SEC (XBRL)· 23 Sept 2026verified

Current liabilities
2024
15.3 m
2025
28.3 m
2026
36.6 m

SEC (XBRL)· 23 Sept 2026verified

Total liabilities
2024
15.3 m
2025
28.3 m
2026
36.6 m

SEC (XBRL)· 23 Sept 2026verified

Equity
2024
41.3 m †
2025
50.8 m †
2026
60.6 m †

SEC (XBRL)· 23 Sept 2026verified

Cash flow · USD

Operating cash flow
2024
10.6 m
2025
21.0 m
2026
5.7 m

SEC (XBRL)· 23 Sept 2026verified

Capex
2024
5.2 m
2025
4.4 m
2026
3.1 m

SEC (XBRL)· 23 Sept 2026verified

Free cash flow
2024
5.4 m ≈
2025
16.6 m ≈
2026
2.6 m ≈

SEC (XBRL)· 23 Sept 2026derived

Investing cash flow
2024
-7.8 m
2025
-6.9 m
2026
-2.4 m

SEC (XBRL)· 23 Sept 2026verified

Financing cash flow
2024
-1.2 m
2025
458.3 k
2026
-2.8 m

SEC (XBRL)· 23 Sept 2026verified

Dividends paid
2024
1.7 m
2025
2.6 m
2026
4.8 m

SEC (XBRL)· 23 Sept 2026verified

Computed indicators

Growth

Revenue growth (YoY)
4.9%
computed by olivLawFY 2026
Revenue CAGR 3Y
9.0%
computed by olivLawFY 2023 → FY 2026
Revenue CAGR 5Y
10.7%
computed by olivLawFY 2021 → FY 2026
EBIT growth (YoY)
42.7%
computed by olivLawFY 2026
Net income growth (YoY)
37.3%
computed by olivLawFY 2026
Net income CAGR 3Y
44.9%
computed by olivLawFY 2023 → FY 2026
Net income CAGR 5Y
unavailable
the base of the ratio is not positive
EPS growth (YoY)
28.8%
computed by olivLawFY 2026
EPS CAGR 3Y
37.7%
computed by olivLawFY 2023 → FY 2026
EPS CAGR 5Y
unavailable
the base of the ratio is not positive
FCF growth (YoY)
-84.5%
computed by olivLawFY 2026

Profitability

Gross margin
35.3%
computed by olivLawFY 2026
EBITDA margin
unavailable
input data missing
EBIT margin
25.1%
computed by olivLawFY 2026
Net margin
24.2%
computed by olivLawFY 2026
FCF margin
5.6%
computed by olivLawFY 2026

Returns

ROE
20.1%
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
ROA
12.7%
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
ROIC
unavailable
input data missing
ROCE
19.1%
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
Payout ratio (EPS)
45.0%
computed by olivLawFY 2026
Payout ratio (FCF)
187.2%
computed by olivLawFY 2026

Balance sheet

Net debt
unavailable
input data missing
Net debt / EBITDA
unavailable
input data missing
Debt / equity
unavailable
input data missing
Interest coverage
unavailable
input data missing

Liquidity

Current ratio
2.5x
computed by olivLawbalance sheet at 30 Jun 2026
Cash ratio
0.5x
computed by olivLawbalance sheet at 30 Jun 2026

Cash

Operating cash flow
5.7 m USD
computed by olivLawFY 2026
Capital expenditure
3.1 m USD
computed by olivLawFY 2026
Free cash flow
2.6 m USD
computed by olivLawFY 2026
FCF conversion
23.1%
computed by olivLawFY 2026
Cash conversion
unavailable
input data missing

Efficiency

Days sales outstanding
66 days
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
Days payables outstanding
37 days
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026

Market and valuation

Market capitalisation
152.7 m USD
computed by olivLawbalance sheet at 30 Jun 2026
Enterprise value
unavailable
input data missing
Market cap / net income TTM
13.7x
computed by olivLawFY 2026
P/E (TTM)
12.9x
computed by olivLawFY 2026
Earnings yield
7.7%
computed by olivLawFY 2026
P/B
2.5x
computed by olivLawbalance sheet at 30 Jun 2026
P/S
3.3x
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
EV/EBITDA
unavailable
input data missing
EV/EBIT
unavailable
input data missing
EV/Sales
unavailable
input data missing
P/FCF
59.1x
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
FCF yield
1.7%
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
Dividend yield
3.5%
computed by olivLawFY 2026
Shareholder yield (distributions)
3.2%
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026

4 indicators that do not apply to the sector.

Valuation

olivLaw classification

Insufficient data
What is missing
  • valuation methods computed: 0 of at least 1

A scoring methodology on indicators and valuation, not investment advice.

Closing price

50.27 USD

04 Nov 2026Source: olivLaw, closing series

Market cap: 152.7 m USD

Key indicators

Market capitalisation
152.7 m USD
computed by olivLawbalance sheet at 30 Jun 2026
P/E (TTM)
12.9x
computed by olivLawFY 2026
P/B
2.5x
computed by olivLawbalance sheet at 30 Jun 2026
EV/EBITDA
unavailable
input data missing
ROE
20.1%
computed by olivLawFY 2026 · balance sheet at 30 Jun 2026
Net margin
24.2%
computed by olivLawFY 2026
Revenue growth (YoY)
4.9%
computed by olivLawFY 2026
Dividend yield
3.5%
computed by olivLawFY 2026

Coverage and freshness

27/37 reporting lines present
Latest full fiscal year: 2026
Latest reported period: 30 Jun 2026
Latest balance sheet date: 30 Jun 2026
Share count (cover of the latest filing), as of: 15 Sept 2026
Source: SEC (XBRL)published 23 Sept 2026
verified 2328derived 159

Score by group

77% · Insufficient data

Estimated value range

unavailable — no valuation method could be computed

Valuation assumptions are editorial choices, not measured; beta is not measured.

Valuation methods

  • DCF (discounted cash flow)unavailable · input data missing
  • Peers: EV/Salesunavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)
  • Peers: EV/EBITDAunavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)

no valuation method could be computed

Multiple comparisons use the SIC vertical: Electronic Components, NEC (SIC 3679)

Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.

Assumptions (illustrative, editorial)

Risk-free rate
4.3%
Equity risk premium
5.0%
Beta (default)
1.00
Cost of equity
9.3%
Terminal growth
2.5%

Factor scorecard

Insufficient data

Minimum-evidence gate: valuation methods computed: 0 of at least 1

FactorValueScoreWeight used
Gross margin · Quality35.3%0 (on a fixed band)14%
EBIT margin · Quality25.1%91 (vs peers)11%
FCF margin · Quality5.6%22 (on a fixed band)11%
Revenue CAGR 3Y · Growth9.0%36 (on a fixed band)22%
Revenue growth (YoY) · Growth4.9%42 (vs peers)11%
Net debt / EBITDA · Balance sheetunavailableunavailable—
Current ratio · Balance sheet2.5x100 (on a fixed band)8%
EV/Sales · Valuationunavailableunavailable—
FCF yield · Valuation1.7%34 (on a fixed band)17%
Shareholder yield (distributions) · Returns3.2%86 (on a fixed band)6%

Factors without a value were dropped; the remaining weights were renormalised.

Score groups

  • Balance sheet· partial100/100 · 1/2 factors with a value
  • Growth38/100 · 2/2 factors with a value
  • Quality35/100 · 3/3 factors with a value
  • Returns86/100 · 1/1 factors with a value
  • Valuation· partial34/100 · 1/2 factors with a value

A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.

Memo

ESPEY MFG. & ELECTRONICS CORP. (ESP). Latest full fiscal year: 2026; data up to 2026-06-30.

Figures computed from the financial statements: revenue 46.1 m USD in 2026; YoY growth 4.9%; net margin 24.2%; ROE 20.1%.

Valuation cannot be computed from the available data.

Insufficient data for a verdict (valuation methods computed: 0 of at least 1).

Text generated deterministically from the figures shown; no language model. Not investment advice.

What supports the thesis

  • EBIT margin: 25.1%
  • Current ratio: 2.5x
  • Shareholder yield (distributions): 3.2%

What contradicts it

  • Gross margin: 35.3%
  • FCF margin: 5.6%

Not assessed (insufficient data or a ratio without meaning): Net debt / EBITDA, EV/Sales.

Versus the vertical median

Electronic Components, NEC (SIC 3679) · same industry (4-digit SIC) · compared with 12 companies

Multiples and returns vs the median

P/E
12.9x
vertical median 30.4x
below median (−57.5%)
EV/EBITDA
—
vertical median 25.7x
P/S
3.3x
vertical median 4.8x
below median (−30.7%)
P/B
2.5x
vertical median 2.1x
above median (+22.1%)
ROE
20.1%
vertical median 3.8%
above median (+425.1%)
Net margin
24.2%
vertical median 1.6%
above median (+1,451.8%)
EBIT margin
25.1%
vertical median 8.3%
above median (+201.2%)
Revenue YoY
4.9%
vertical median 16.2%
below median (−69.5%)
Net debt/EBITDA
—
vertical median -0.2x
Dividend yield
3.5%
vertical median 0.0%
above median (+7,264.8%)

Price rebased to 100 (monthly, 5 years)

Companies in the vertical

Market capP/EROENet marginRevenue YoY1A / 3A
VRTVertiv Holdings Co79.1 bn38.446.6%16.0%+27.7%+14% / +371%
AEISAdvanced Energy Industries, Inc.8.6 bn30.419.9%12.7%+21.4%+0% / +123%
PIImpinj, Inc.5.6 bn—-3.8%-2.5%−1.4%+5% / +116%
VICRVicor Corporation1.9 bn41.723.5%32.2%+26.1%+78% / +335%
VREXVarex Imaging Corp779.3 m35.44.6%2.6%+4.1%+60% / −2%
MPTIM-tron Industries, Inc.277.8 m23.512.4%16.3%+11.0%+24% / +85%
ESPEspey Mfg. & Electronics Corp.152.7 m12.920.1%24.2%+4.9%+31% / +193%
LGLLgl Group Inc84.6 m—-0.6%-5.0%−2.9%+15% / +38%
MVISMicroVision, Inc.42.2 m—-197.8%-2,230.6%−74.3%−91% / −97%
NSYSNortech Systems Incorporated31.2 m29.43.0%0.6%+723.6%+59% / +26%
OSTOstin Technology Group Co., Ltd.23.7 m—-169.1%-26.0%+22.2%−97% / −99%
NEONNeonode Inc.10.5 m1.348.6%397.8%−33.7%−72% / −52%
LPLLG Display Co., Ltd.——-37.2%-9.6%+24.8%−39% / −45%

1- and 3-year price returns: for ESP from daily closes (the same as the performance table), for the other companies from month-end closes.

olivLaw engine forecast

The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.

The engine has no published run for this company yet.

Valuation scenarios (editable assumptions)

Illustrative scenarios

Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.

Bear
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Base
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Bull
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Nothing is saved.

Estimated price (USD)

Estimated priceBearBaseBull
1 years
29.40
Total return -39% · Per year -39%
51.87
Total return 7% · Per year 7%
77.98
Total return 59% · Per year 59%
3 years
31.19
Total return -30% · Per year -11%
61.65
Total return 34% · Per year 10%
101.38
Total return 117% · Per year 29%
5 years
33.08
Total return -20% · Per year -4%
73.28
Total return 67% · Per year 11%
131.82
Total return 191% · Per year 24%
What moves the 3-year price the most
  • Exit P/E± 15.41
  • Net margin± 10.79
  • Annual revenue growth± 8.49
  • Annual dilution± 0.91

AI analysis

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

In brief

Espey Mfg. & Electronics Corp. designs and manufactures power supplies, converters, transformers and power distribution equipment for demanding military and industrial uses, from its plant in Saratoga Springs, New York. Net sales reached 46.1 million USD in fiscal 2026 1, and a backlog of 134.9 million USD 1 gives visibility over several years, although the company could remain dependent on US defence budgets.

SWOT

Strengths

  • The company holds ISO and AS9100 certifications, full vertical integration and a sizeable firm order book for a supplier of its scale 1.
  • The balance sheet is solid, with high working capital and no borrowing over the last two years, giving financial flexibility 1.
  • Gross margins improved in fiscal 2026, supported by product mix and service work 1.

Weaknesses

  • Dependence on a small number of large customers means that losing one programme or customer could have a significant impact on results 1.
  • The company has a small workforce and faces difficulty recruiting for specific skillsets 1.
  • Research and development is limited, and the company has little broad proprietary new product portfolio 1.

Opportunities

  • Open opportunities and new orders could support growth if defence contracts materialise 1.
  • Navy industrial base modernisation programmes funded by grants may support equipment investment 1.
  • Diversifying customers and growing sales in foreign markets could reduce the current concentration 1.

Threats

  • Changes in defence budgets or delays in funding approval could postpone or cancel orders 1.
  • Trade tariffs and component shortages could raise costs and delay deliveries 1.
  • Larger competitors accepting lower margins could pressure prices and the winning of new contracts 1.

Risks

  • Customer concentrationhigh

    A small number of customers accounts for a large share of sales, and losing one customer or programme could materially affect financial performance 1.

  • Dependence on government fundinghigh

    Orders depend on US and foreign government budgets and allocations, and contracts can be terminated for the government's convenience 1.

  • Component shortages and long lead timesmedium

    Single-source components and long delivery times could delay production and affect delivery dates 1.

  • Margin pressuremedium

    Competitors accepting lower profits and the upfront costs of design work could reduce profitability on new programmes 1.

  • Tariffs and raw material costsmedium

    Tariffs on steel and aluminium could raise costs and lead times, and the company cannot assure that the impact will be limited 1.

Investment thesis

What would need to be true (bull case)

  • Sales growth in fiscal 2026 and rising gross margins show that the business can earn good profits when the product mix is favourable 1.
  • A large firm backlog and open opportunities could support revenues in fiscal 2027 1.
  • The strong balance sheet and absence of debt offer room for investment and dividends 1.

What would break the thesis

  • Concentration on a few large customers means results depend on programmes that can be completed or delayed 1.
  • Upfront design investment can temporarily reduce profitability and slow the conversion of orders into sales 1.
  • Dependence on defence budgets and trade tariffs creates uncertainty about order timing 1.

What to watch

  • Revenue delivery against the growth outlook for fiscal 20272027
  • Development of new orders compared with fiscal 2026 levelsnext 10-K
  • Share of large customers in sales and any programme lossesnext 10-K
  • Gross margin trend as the share of new programmes growsQ1 2027

Products, market & competition

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

The business

Espey is a power electronics design and OEM manufacturer with roots going back to 1928, and it holds ISO 9001:2015 and AS9100:2016 certifications 1. Its main products include power supplies, converters, filters, transformers, magnetic components, power distribution equipment, UPS systems and antennas, used on locomotives, ships and radar systems 1. The company is vertically integrated, producing inductors, populating circuit boards, fabricating metalwork and testing products in house 1.

Customer concentration is high: in fiscal 2026, sales to five customers accounted for between 11% and 16% of the total each 1. Most orders come from prime defence contractors, the US Department of Defense and foreign governments, and government contracts can be terminated for convenience 1. The company notes that new product development involves heavy upfront investment that can temporarily reduce profitability 1.

Research activity is limited, as the company works mainly on customer-specific needs, with research expenditures of about 69,902 USD in fiscal 2026 1. Approximately 35% of employees are represented by the International Brotherhood of Electrical Workers, and the collective agreement expires on June 30, 2028 1.

Segments

Power supplies and converters

These are product lines built around long-running defence and industrial programmes. In fiscal 2026 sales in this category declined, reflecting contract completions and customer delivery schedules that left fewer active orders than the prior year 1.

Magnetics and transformers

Sales growth in fiscal 2026 was driven mainly by magnetics programmes and field service work 1. The company completed construction of its Magnetics Center of Excellence in 2025 1.

Build to print and engineering services

These services include design to specification, build to print products, design studies, environmental testing and automatic test equipment development 1. They form part of the strategy to win longer-term production work after the engineering phase 1.

Market context

Espey operates in military and industrial electronic equipment, where competition is based on price, product performance and supplier experience 1. The company states that its sales are not a significant share of the market for any class of its products 1. Demand across the power electronics industry has created shortages and lead times that sometimes approach a year or more for components 1.

For fiscal 2027, management expects revenues to outpace fiscal 2026 and new orders to meet or exceed fiscal 2026 levels 1. Open opportunities depend on US defence spending allocations and on competitive bidding 1.

Trends

  • Defence demand and government budgetsmixed

    Most orders come from the US Department of Defense and foreign governments, so funding depends on budget allocations and political decisions 1. Delays in Congress or changes in funding could alter programme timing 1.

  • Component shortages and long lead timesheadwind

    Strong demand across the power electronics industry creates shortages, and some components can take nearly a year to arrive 1. The company says it adjusts planning for these lead times, but delays can still affect deliveries 1.

  • Steel and aluminium tariffsheadwind

    Tariffs on steel and aluminium imports are in effect and could raise raw material costs and lengthen lead times, although the company has not reported significant issues so far 1. The company cannot assure that additional tariffs will not affect future earnings 1.

  • Workforce and wage pressuremixed

    The workforce is stable, but hiring for specific skillsets takes longer and the local labour market is competitive 1. If staffing delays combine with supply problems, shipments could be postponed 1.

Competitive position

Competition comes from divisions of the largest electronics companies and from many small firms 1. Many competitors invest aggressively in design costs and accept lower margins to keep existing business and grow share, which pressures Espey's prices and margins 1.

The main competitive factors are price, product performance and the supplier's experience and history 1. Espey adjusts its pricing to retain repeat programmes while staying competitive in bids for new programmes 1.

  • Divisions of large electronics companies

    The filing refers generically to large electronics companies, without naming them, competing across all of Espey's product classes 1.

  • Small military electronics firms

    The filing mentions many small companies in the same industry, competing mainly on niche programmes 1.

  • Competitors offering aggressive pricing

    The source describes competitors accepting lower margins and investing in design to win share, without naming them 1.

  • Other suppliers for government contracts

    Competition for defence contracts takes place through bidding, but the source does not name specific other suppliers 1.

News & filings

In the press

No news in our archive over the last 180 days.

SEC filings

Sources

  1. [1] Form 10-K, fiscal year ended 2026-06-30 · SEC / Espey Mfg. & Electronics Corp. · 23 Sept 2026

Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.