Universal Electronics Stock Analysis

UEIC is a solid looking net-net trading at a deep discount to NCAV

While scanning my net-net screener recently, I stumbled across Universal Electronics Inc. (UEIC). Unlike the usual junk that populates these lists, UEIC caught my eye as a potentially decent stock trading at a significant discount to its Net Current Asset Value (NCAV). The company’s core business centers on designing and manufacturing remote controls for the cable and smart TV markets, but they have been aggressively expanding into the smart home and IoT space with wireless sensors, thermostats, and automation hubs. An interesting piece of UEIC’s intellectual property is their ownership of the world’s largest database of device control codes, ensuring their tech remains compatible with nearly every device on the market.

From a market capitalization standpoint, we are firmly in micro-cap territory with a market cap of just $55.5M. The stock has had a rough ride; after trading near $20 in early 2023, it began a steady slide. By the summer of 2025, the price sat at $7, only to tumble below $3 in November. This decline corresponds with UEIC’s declining sales, revenue peaked at $753M in 2019 and has since drifted down to a trailing twelve-month (TTM) figure of $391M. However, despite the shrinking revenue, gross margins remain resilient at 28%. The company has posted TTM operating losses of $5.7, and losses of $7.5M in 2024 and $32M in 2023. This is a departure from their historical performance where between 2010 and 2022, they only saw one other year of operating losses.

The current strategy involves heavy R&D spending, roughly $30M annually, as they pivot toward higher-tech products. While this diversification seems necessary for long-term survival, that R&D spend represents a significant lever management could pull if they found themselves in a real liquidity pinch.

As I mentioned earlier, UEIC is a net-net. UEIC holds $208.6M in total current assets, comprised of: $31.5M in cash, $90.4M in accounts receivable, and $80.6M in inventory. The company has total liabilities of $134.6M, of which is $6.9M in capital lease obligations. When I analyze net-nets, I add back the capital lease obligation. This leaves us with an NCAV of $80.9M. With 13.3M shares outstanding, the NCAV per share sits at $6.08. With the stock currently trading around $4, it is trading at two thirds of its liquidation value, which is highly attractive.

I also find it encouraging that the cash balance alone represents 56% of the market cap and that the asset mix isn’t dangerously overweight in inventory. Furthermore, management hasn’t been diluting shareholders, in fact shares outstanding have trended down over the years. A big red flag with net-nets is massive share issuance. Another thing to look at is how much the company’s NCAV has declined over a period, known as the burn rate. Given that the NCAV only declined about 6% over the last year, the burn rate feels reasonable. As for shareholder returns, UEIC pays no dividends but has intermittently repurchased shares. The company had significant repurchases a few years ago, totaling $13M in 2022 and $60M in 2021. Unfortunately for them, that was at a much higher stock price. While buybacks have paused the past couple of years, they still have $3.5M in remaining authorization.

Overall Universal Electronics looks to be a solid net-net without obvious red flags. The company seems to be navigating declines in their traditional TV remote business, but are pivoting to other lines of business. The stock is at a deep enough discount to NCAV to provide a good amount of margin of safety. I will be bumping this stock up on my research priority list.

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