$5.10
$32.80
bear $5.10
base $19.14
bull $32.80
margin of safety $11.00
market price* $27.71
Vishay Intertechnology makes the basic building blocks of electronics: resistors, capacitors, inductors, diodes, MOSFET power transistors and optoelectronic parts. It sells them by the billions to makers of cars, factory equipment, power grids, computers and telecom gear, both directly and through distributors. 2025 sales were $3.07 billion: roughly 41% booked in Europe, 35% in Asia and 24% in the Americas. These are mostly catalogue parts, so demand and prices move with the electronics inventory cycle. The founding Zandman family controls the company through high-vote Class B shares. Earnings level. Our measure of owner earnings is operating cash flow with working-capital swings removed, minus stock compensation, minus the capital spending needed to keep the business where it is. Two judgement calls matter. First, we added back the installments of the one-time 2017 U.S. transition tax on old overseas profits ($14.8M to $47.0M a year), because the final installment was paid in 2025. We left in the withholding taxes Vishay pays whenever it brings cash home from Germany and Israel, because it has paid them in most recent years and they are a running cost. Second, revenue has not grown since 2022, so our method counts nearly all of the recent heavy spending as upkeep. That includes the Newport, Wales wafer fab bought from Nexperia in 2024, the 12-inch fab under construction in Itzehoe, Germany, and new plants in Mexico. On that basis owner earnings per share were $1.07 (2016), $1.80, $1.12, $1.10, $1.26, $2.66 (2021), $2.29, $1.49, then -$0.45 (2024) and -$0.23 (2025). Adding back cash interest gives the cash the business makes before paying its lenders. Over 2016-2025 that figure ran from about -$40M to $401M, with a median of $198M. Those ten years cover a full cycle: the 2019-2020 slump, the 2021-2022 shortage boom and the 2024-2025 inventory correction. We use about $200M as the normal level. Recent results. In the first half of 2026 revenue rose 17% from a year earlier, and the 2025 book-to-bill ratio was 1.21. But capital spending also rose to $206M in the half, so the business made roughly zero cash before interest. That is why no case jumps straight back to the normal level. In 2025 the business made $2M before interest, up from -$40M in 2024. Our base case starts at $10M in the first year, which is below that pace of improvement. Balance sheet. On July 1, 2026 Vishay sold 17.25 million new shares at $50, raising $830M net. It said the money will speed up growth projects and pay down its secured credit line. At July 4, 2026 it had $1.30B of cash against $988M of borrowings: $750M of 2.25% convertible notes due September 2030 and $238M drawn on the revolver. The notes must be repaid in cash up to their face value, and Vishay bought capped calls that cover dilution up to $43.98 a share. We counted $300M of cash as needed to run the business, which leaves net cash of about $15M on roughly 156.5 million diluted shares. At end-2025 net leverage as the credit agreement measures it was 2.42x against a 3.25x limit, and total leverage was 3.23x. The raise left ample headroom. Pension obligations are already charged through cash flow, so we did not subtract them again. Base case ($19.14). Business cash flow recovers from $10M to $60M to $140M over three years as the fab program peaks, then holds at about $200M a year from year four. It stays there after year ten, with no growth credited. Vishay has made these parts for more than 60 years across thousands of customers and many cycles, which supports a lasting level. It does not support growth. We credited no growth from the new capacity, the electrification, AI or 5G demand management cites, or share gains, because none of it is contracted or a proven repeatable process. We assume the new cash is invested at least as well as the rest of the business. The business is worth about $2.98B, it holds about $15M more cash than it owes, and equity is about $2.99B. Bear case ($5.10). The larger plant base keeps capital spending near the 2022-2025 average of about $310M a year. Newport and Itzehoe run below capacity, and price declines continue: the MOSFET segment, where Newport sits, went from a 25.1% operating margin in 2023 to -4.8% in 2025. Normal business cash flow settles near $100M. Over the decade the case includes one more downturn like 2024-2025, when revenue fell 14% in a year and cash flow went negative, at -$40M for two years. We also assume $500M of the new cash is spent on projects that earn nothing. The business is worth about $1.28B against about $485M of net debt, which leaves about $0.80B of equity. The cash on hand covers the 2030 note principal, so this case does not need new money. Bull case ($32.80). The capacity program fills and demand returns to the 2021-2022 shortage pattern, a level the business has already reached. After $60M in the first year, business cash flow is about $250M and then $400M over the next two years, then $320M a year. This is the company's own capacity coming on line as planned, not a new market. The business is worth about $5.12B, with net cash of about $15M. Margin-of-safety price. We are only moderately sure of the $200M normal level. The record swings from losses to $400M, and the past four years have been distorted by an investment program whose payoff is not yet visible. The worst realistic outcome is a long downturn while the new fabs sit underused and the controlling family keeps spending through it. The balance sheet would survive: borrowings are mostly 2030 convertible notes covered by cash, customers are widely spread, and the plants are real assets. But owners could earn almost nothing for years. If normal cash flow is $150M rather than $200M, the shares are worth about $14.40. They are worth about $11.20 if the new cash also earns nothing, and about $10.60 if the trough lasts through 2028 as well. The margin-of-safety price is $11. At that price the company is valued at about $1.7B. That is about 8.6 times the $200M normal level and about 17 times the bear level. The dividend pays $0.40 a share, about 3.6% at $11, over the holding period. Returning to the normal level by 2029-2030 would imply about a 20% or better annual return. A bear-like outcome would hurt, but cash on hand limits the damage. What would prove this wrong: capital spending staying above $350M a year after Itzehoe is finished; the new cash going to acquisitions at high prices; or a recovery that lifts sales but not margins. Earlier analysis. Our previous estimates were made on a different basis and are not comparable. This analysis reflects the July 2026 share sale, which turned Vishay from about $436M of net debt into a roughly debt-neutral position, at the cost of about 13% more shares.