Small-cap electronics manufacturer Key Tronic plunges 30% on weak earnings
Key Tronic completed the wind-down of manufacturing in China and shifted more production to U.S. and Vietnam facilities / Photo: LinkedIn / Company / Keytronic
Shares of Key Tronic Corporation, a small-cap manufacturer of electronics for other companies, like keyboards, mice, and other input devices, plunged around 30% on Friday. The company reported a decline in revenue for its latest quarter and declined to provide guidance for the current quarter.
Details
Key Tronic tumbled more than 28% on the Nasdaq on Friday to $2.76 per share, its worst close since mid-April.
On the evening of Thursday, the company reported that revenue for its fiscal fourth quarter, ended June 27, fell almost 8% year over year to $102 million. Key Tronic, like the broader electronics contract-manufacturing industry, faced financial constraints that delayed approximately $10 million of its shipments, the company explained.
The net loss for the reporting period widened almost 780% year over year to $34.3 million, or $3.16 per share. Most of the loss was attributable to a noncash charge related to the establishment of a valuation allowance against certain deferred tax assets, according to the press release. The company also wrote off approximately $8.4 million in receivables from distressed customers.
Against this backdrop, Key Tronic’s net loss for the full 2026 fiscal year widened 476% to $47.8 million, or $4.41 per share. Revenue was down more than 17% at $386.7 million.
Outlook
An increase in new program wins will allow Key Tronic to grow revenue over the coming quarters, the manufacturer expects. In the fourth quarter, it secured more than $60 million in new program awards in markets that are new for the company – construction, data centers, and industrial power management – according to CEO Brett Larsen. Key Tronic declined to provide specific revenue or earnings guidance for the current quarter.
In its fiscal 2026, the company wound down manufacturing in China, a move it expects will save approximately $4 million in the current fiscal year. About half of its manufacturing now takes place in the U.S. and Vietnam. This has improved its cost structure, enhanced supply-chain flexibility, and enabled it to offer customers attractive manufacturing options amid ongoing macroeconomic and geopolitical uncertainty, Larsen noted.
According to MarketWatch data, only one Wall Street analyst covers the stock. They have a “buy” rating at a target price of $9.25 per share, implying 235% upside from the last close.
