$5.50
$21.70
bear $5.50
base $13.20
bull $21.70
margin of safety $7.50
market price* $60.40
Vishay Precision Group makes precision sensors and measurement equipment in three segments: Sensors (foil resistors and strain gages), Weighing Solutions (load cells and weighing systems) and Measurement Systems (steel, advanced measurement and related systems). Its products are typically designed into customers' equipment, and it makes them in the United States, Europe, Canada, Israel, India, Japan and China. Sales are cyclical, and profit swings more than revenue. How we measure earnings. We start with operating cash flow, take out the cash absorbed or released by working capital (receivables, inventory, prepaid items, payables and other current liabilities), subtract stock compensation as a real cost, and subtract only the capital spending needed to maintain the business (spending tied to revenue growth is treated as discretionary). Per diluted share this gave: 2016 $0.47, 2017 $1.79, 2018 $2.09, 2019 $1.65, 2020 $0.60, 2021 $1.33, 2022 $1.94, 2023 $2.05, 2024 $1.07, 2025 $0.64. Depreciation and amortisation are added back through operating cash flow. 2020 was depressed by capital spending of $22.9 million, which we treated as maintenance because revenue fell that year. The starting level. We use the median of 2019 to 2025, or $1.33 per share. We start in 2019 because the company bought businesses in 2019 (about $40.5 million) and 2021 (about $47.2 million), so earlier years describe a smaller business. The window includes both the strong 2021 to 2023 years and the weak 2020, 2024 and 2025. We did not use trailing twelve months. What has happened recently. Owner earnings per share fell 40% in 2025, from $1.07 to $0.64. Revenue was flat at $307.2 million versus $306.5 million, but gross margin fell from 41.0% to 38.9% and net earnings fell to $5.3 million from $9.8 million in 2024 and $26.0 million in 2023. In the first half of 2026 revenue rose about 15% to $168.3 million from $146.9 million, but the company reported a net loss of about $2.0 million and operating cash flow of roughly negative $0.3 million versus positive $11.2 million a year earlier. The quarterly filing data suggests most of that cash swing came from a build in receivables, inventory and prepaid items of roughly $10 million as sales grew, with cash flow before working capital broadly similar to a year earlier. We could not confirm the reasons in the quarterly narrative, so this reading rests on the reported cash flow line items. Because earnings have been below the seven-year median for two years and the first half of 2026 shows no margin recovery, we do not assume the company returns to $1.33. Base case, $13.20 per share. Owner earnings of $0.60 in 2026 (the first half of 2026 supports roughly this level, and it is 6% below the 2025 result, not above it), rising to $0.75, $0.90 and then $1.05 by 2029, and holding flat through 2035. $1.05 is what the business earned in 2024 on almost the same revenue ($306.5 million) at a 41.0% gross margin, so this is a return to a level already reached rather than growth. Year-end 2025 backlog of $108.2 million, up from $96.2 million a year earlier, and quarterly orders at or above sales throughout 2025 support volumes over the next year, although the company says orders can be cancelled without penalty. After 2035 we assume earnings fade 3% a year, because the company's products are designed into customer equipment for long periods but we cannot point to a named source of growth. No revenue growth, share gains, new products or margin expansion beyond the 2024 level are credited. The Sensors gross margin fell to 28.5% in the fourth quarter of 2025 from 32.0% a year earlier and Weighing Solutions to 33.0% from 34.1%, so the base case is not built on the 2021 to 2023 profitability. Bear case, $5.50 per share. Owner earnings stay at about $0.50 a year, below the 2025 result and close to the first-half 2026 pace, for ten years, then fade 8% a year. This reflects the margin erosion already reported (gross margin down 2.1 points in 2025, with unfavourable currency, mix and inventory adjustments), the tariff exposure the company discloses given manufacturing in India, China, Japan, Europe, Israel and Canada, and a $21.0 million revolver balance (after an $11.0 million repayment in 2025) on a $75.0 million facility maturing August 2029 that carries covenants. The company held $87.4 million of cash at the end of 2025, so leverage is modest. Bull case, $21.70 per share. Owner earnings rise to $0.65, $1.00, $1.40 and then $1.65 by 2029, the median of 2017 to 2025 and a level reached in 2019, and hold to 2035, fading 2% a year afterwards. This needs the backlog to convert at margins seen before 2025 and the working-capital build in 2026 to reverse. We credit no acquisitions and no new markets. Accounting treatment. All values are per share of equity and are not adjusted for cash on the balance sheet or for debt. The cash flow already reflects interest paid, and we do not add the $87.4 million cash on top of the case values or subtract the revolver from them. The three cases stay above zero, so the company does not owe more than the business is worth in any of them. Intangible amortisation is small relative to cash flow and did not need special treatment beyond leaving the growth flat. The 2025 sale of a manufacturing facility for $10.9 million is investing-related and not in owner earnings, although the $5.5 million gain was excluded because it is non-cash. What would make this wrong. The valuation would be too high if margins stay at the 2025 to first-half 2026 level, and too low if margins recover to 2021 to 2023 levels. Two years of weaker results and a first-half loss on rising revenue are the main evidence for caution. The margin-of-safety price is about $7.50 a share, a discount of over 40% to the base case, reflecting a cyclical industrial company with recent margin erosion and a downside case not far below that price.