Post-Covid, the consumer electronics industry has faced a challenging path, including inflation, consumers’ reluctance to spend money on non-essential goods, and more. Analysts expect 2025 could bring a modest recovery in this space, with global consumer electronics sales of $977 billion. While this is lower than previous estimates of more than $1 trillion in global sales, it still represents an improvement over recent years.
Behind the prime Consumers like electronics manufacturers Apple Inc. NASDAQ: AAPL or Samsung Electronics Co. Ltd., a lot of Companies are dedicated to designing and manufacturing Various electronic components. These firms not only provide components for some major retail electronic products. but also custom-build items for customers in industrial, healthcare, aerospace, defense, and other markets.
With inflation and supply chain concerns abated for the time being, some of these behind-the-scenes electronic component makers may thrive in the new year.
TTM Technology: AI is ready for development
TTM technology today
(as of 12/4/2024 05:38 PM ET)
- 52-week range
- $13.43
▼
$25.49
- P/E ratio
- 37.32
- Price target
- $25.31
Manufacturer of printed circuit boards, radio frequency components, and many other products, TTM Technologies Inc. Nasdaq: TTMI C Quite a strong third quarter. The company reported a nearly 8% year-over-year revenue improvement and turned from a net loss in the year-ago quarter to net income of $14.3 million. Profit margin came in at 2.3%, which the company should be able to continue to build if revenue continues to trend upward. Cash flow from operations was 10.6% of revenue, helping to strengthen the balance sheet. One area for improvement is EPS, which fell short of analyst forecasts.
TTM’s up-and-coming area of focus is data center computing products, which are in high demand as a result of a broader shift towards generative AI use across industries. It is likely that this part of the company’s business will continue to grow, barring a significant regulatory shift toward AI or further movement away from the technology in the coming quarters.
Analysts are optimistic about TTM heading into the new year. Four analysts give the company a buy rating with zero sell or hold ratings. It also enjoys a consensus price target of $25.31, with a 5% upside potential.
Kimball Electronics: Low results but reasons to be optimistic
Kimball Electronics today
(as of 12/4/2024 ET)
- 52-week range
- $16.64
▼
$27.73
- P/E ratio
- 38.37
- Price target
- $23.25
Despite being weak Results for the first quarter of fiscal 2025which ended on September 30, 2024, Kimball Electronics Inc. Nasdaq: K.E remains an attractive prospect for analysts, who give the firm a moderate buy rating. Kimball manufactures components for the automotive, medical and industrial markets. Sales at all three locations declined year-over-year for the last quarter as a result of weak end markets, which led to a 15% decline in total sales. Any disappointment from the company’s earnings results doesn’t seem to have rubbed off on its stock performance, however, with shares of KE up nearly 7% in the 30 days since November 27.
One reason investors are optimistic is that Kimball recently completed the divestment of its automation, test and measurement business and plans to close a manufacturing plant in Florida to cut costs and streamline operations. is likely to help streamline.
Benchmark Electronics: Efficiency and Preparedness for Industry-Wide Recovery
Benchmark Electronics Today
(as of 12/4/2024 ET)
- 52-week range
- $24.93
▼
$52.57
- Dividend yield
- 1.39%
- P/E ratio
- 28.37
- Price target
- $42.33
Benchmark Electronics Inc. NYSE: BHE Also manufactures electronic components for a wide range of end markets. of this Third quarter sales The $658 million came in at the upper end of guidance, although they represented a year-over-year decline. Driving sales was the company’s mid-cap business, which includes products used in the manufacture of semiconductors.
Benchmark is highly efficient, having generated four consecutive years of quarterly operating margin expansion and $245 million in free cash flow last year. This sets the firm up well for the new year and a potential recovery in the industrial and medical spaces. Industrial and medical businesses accounted for about 40% of the benchmark’s sales in the latest quarter, so either or both markets will see a recovery. Make a meaningful contribution to better top-line performance.
Due to caution
The aforementioned companies have attracted analyst interest for growth potential in the new year. However, the prospect of an uncertain geopolitical landscape and potential tariffs are two factors that contribute to volatility in the electronics component space as well. Investors focusing on these firms should keep a close eye on developments in that sector.
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