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NVE (NVK) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. NVE disclosed 13 risk factors in its most recent earnings report. NVE reported the most risks in the “Finance & Corporate” category.

Risk Overview Q1, 2024

Source: the company's latest filing for the period ended Mar 31, 2024, filed May 01, 2024

Risk Distribution
13Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

NVE disclosed risks per quarterNo. of Risks13Q12024Showing: Q1, 2024
Risks removedRisks addedRisks changedNVE Risk Factors
  • Debt & Financing - Risk 1
    We could incur losses on our marketable securities.

    As of March 31, 2024, we held $52,548,876 in short-term and long-term marketable securities, representing approximately 79% of our total assets. Business conditions, bond-market conditions, and interest rate increases beyond our control or ability to anticipate can cause credit-rating downgrades, increased default risk, or unrealized losses. Additionally, the assignment of a high credit rating does not preclude the risk of default on any marketable security. Any impairments of our marketable securities could impact our financial condition, income, or cash flows, or our ability to pay dividends. We may not be able to enforce our intellectual property rights. We protect our proprietary technology and intellectual property by seeking patents, trademarks, and copyrights, and by maintaining trade secrets by entering into confidentiality agreements with employees, suppliers, customers, and prospective customers depending on the circumstances. We hold patents or are the licensee of others owning patented technology covering certain aspects of our products and technology. These patent rights may be challenged, rendered unenforceable, invalidated, or circumvented. Efforts to enforce patent rights can involve substantial expense and may not be successful. Furthermore, others may independently develop similar, superior, or parallel technologies to any technology developed by us, or our technology may prove to infringe on patents or rights owned by others. Thus the patents held by or licensed to us may not afford us any meaningful competitive advantage. Also, our confidentiality agreements may not provide meaningful protection of our proprietary information. Our inability to maintain our proprietary rights could have a material adverse effect on our business, financial condition, and results of operations.

  • Debt & Financing - Risk 2
    We face the risk of credit losses

    Financial Accounting Standards Board Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements requires us to measure our allowance for credit losses based on the expected credit losses over the life of our receivables. In the past fiscal year, we recorded significant expenses under this standard, although most of these expenses were later reversed. Any future increases in our allowance for credit losses would have a negative impact on our financial results, including reducing our net income and net income per share.

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Tech & Innovation (1)
Ability to Sell (1)

Risk Highlights Q1, 2024

Main Risk Category
Finance & Corporate
With 3 Risks
Number of Disclosed Risks
13
S&P 500 Average: 32
Recent Changes
4Risks added
0Risks removed
0Risks changed
Since Mar 2024
Number of Risk Changed
0
S&P 500 Average: 1

Risk Word Cloud

failure to meet stringent customer requirements could result in the loss of key customers and reduce our sales.reduce our saleswe are subject to risks inherent in doing business in foreign countries that could impair our results of operations.subject to riskswe are subject to risks inherent in doing business in foreign countries that could impair our results of operations.subject to risks inherentwe are subject to risks associated with the availability of natural resources and energy.availability of natural resourcesfailure to meet stringent customer requirements could result in the loss of key customers and reduce our sales.loss of key customerswe may lose business and revenue if our critical production equipment fails.our critical production equipment failswe are subject to risks inherent in doing business in foreign countries that could impair our results of operations.impair our results of operationswe face the risk of credit lossesrisk of credit losseswe face an uncertain economic environment in the industries we serve, which could adversely affect our business.adversely affect our businessany decisions to reduce or discontinue paying cash dividends to our shareholders could cause the market price of our common stock to decline.decisions to reduce

Risk Factors Full Breakdown - Total Risks 13

Accounting & Financial Operations1 | 7.7%
  • Accounting & Financial Operations - Risk 1
    Any decisions to reduce or discontinue paying cash dividends to our shareholders could cause the market price of our common stock to decline.

    Future dividends will be subject to Board approval and will consider factors including our results of operations, cash and marketable security balances, the timing of securities maturations, estimates of future cash requirements, fixed asset requirements, and other factors our Board may deem relevant. Because they are generally more than our current cash flow from operations, recent and declared dividend amounts may be unsustainable. Any reduction or discontinuance by us of cash dividends could cause the market price of our common stock to decline.The price of our common stock may be adversely affected by significant price fluctuations due to a number of factors, many of which are beyond our control. From time to time our stock price has decreased sharply and could decline in the future. The market price of our common stock may be significantly affected by many factors, some of which are beyond our control, including: - the announcement of new products or product enhancements by us or our competitors;- delays in our introduction of new products or technologies or market acceptance of these products or technologies;- loss of customers, decreases in customers' purchases, or decreases in customers' purchase prices;- changes in demand for our customers' products;- quarterly variations in our financial results, revenue, or revenue growth rates;- speculation in the press or elsewhere about our business, potential revenue, or potential earnings;- general economic conditions or market conditions specific to industries we or our customers serve or may serve;- legal proceedings involving us, including intellectual property litigation or class action litigation;- changes in Federal or state corporate income tax rates, tax credits, or other changes in tax policies;- changes in tariffs, customs, duties, or other trade barriers in foreign jurisdictions where we purchase raw materials or sell our products; and - our stock repurchase and dividend policies and decisions.

Debt & Financing2 | 15.4%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.