Shares of a small-cap electronics manufacturer plummeted 30% following a weak earnings report

Shares of Key Tronic Corporation, a small-cap electronics manufacturer—whose products range from driver-assistance systems to mobile power systems for the military— plummeted nearly 30% on August 28. The company reported a decline in revenue for the previous quarter and declined to provide a forecast for the current quarter.

Key Tronic shares plummeted more than 28% on the Nasdaq on August 28, falling to $2.76. This is the lowest level since mid-April.

On the evening of August 27, the company reported that its revenue for the fourth fiscal quarter, which ended on June 27, fell nearly 8% year-over-year to $102 million. Key Tronic, like the entire electronics contract manufacturing industry, faced financing constraints, which led to a delay in shipments of its products worth approximately $10 million, he explains.

Net loss for the reporting period rose by nearly 780%, to $34.3 million (or $3.16 per share). According to the press release, most of this loss was attributable to non-cash expenses and was related to the creation of a tax provision. In addition, the company wrote off approximately $8.4 million in accounts receivable from troubled customers, the press release states.

As a result, Key Tronic’s net loss for the full 2026 fiscal year rose by 476%, to $47.8 million ($4.41 per share). Revenue, meanwhile, declined by more than 17%, to $386.7 million.

The manufacturer expects that the increase in new contracts will enable Key Tronic to boost its revenue in the coming quarters. In the fourth quarter, the company signed agreements worth more than $60 million in new segments for it—construction and power management in data centers and industrial facilities—according to CEO Brett Larsen, as quoted by the company.

Key Tronic declined to provide a specific revenue and profit forecast for the current quarter.

In fiscal year 2026, the company wound down production in China, a move it expects to save approximately $4 million this year. Currently, half of its operations are based in the U.S. and Vietnam. This has improved the cost structure, increased supply chain flexibility, and enabled the company to offer customers attractive manufacturing terms amid ongoing macroeconomic and geopolitical uncertainty, says Larsen.

Only one Wall Street analyst is covering the company. He recommends buying the company's stock, with a target price of $9.25—235% higher than the last closing price.