Vicor (VICR) Stock Forecast & Price Target

Vicor Corp has demonstrated robust financial performance, highlighted by a gross margin of approximately 50.2%, which exceeded previous estimates by around 200 basis points, driven by strong revenue and a significant increase in royalty revenue. The company is also experiencing growing momentum in its intellectual property (IP) licensing business, which management anticipates could double within the next few years, contributing positively to future revenue streams. Additionally, the recent agreement on a new licensing contract with an existing original equipment manufacturer (OEM) further solidifies potential for sustained revenue growth and underscores the company's efforts to enhance shareholder value.

Vicor Corp's financial outlook is negatively impacted by a decreasing ending backlog, which fell to $152.8 million, representing a decline from both the previous quarter and the quarter prior. The company's operational expenses are heightened, which would have been lower by approximately $3 million had it not been for the patent litigation settlement revenue, indicating potential inefficiencies. Furthermore, weak net bookings in the second quarter of 2025, driven by a business-to-business ratio dropping below one and cancellations from Chinese customers in response to tariff surcharges, reflect challenges in the industrial market primarily served through distribution channels.