NNBR
NN Inc
Summary
What they do:
Manufacture high-precision metal components and assemblies — including micron-tolerance watertight couplings for liquid-cooled computing equipment, high-voltage cable assemblies for rack-top power distribution in data centers, precision stamped components for electric grid infrastructure (transformers, switchgear), and engineered parts for automotive, defense, and industrial applications.
Why they matter:
NN is pivoting from legacy automotive precision components toward high-growth data center, electric grid, and defense markets. Electrical grid and data center products already represent ~60% of sales. Their precision machining capability (micron-level tolerances) translates directly to liquid cooling couplings where a leak destroys server equipment, and they are now adding cable assemblies and busbar distribution hardware as a second DC product line. New business wins totaled $71.8M in FY2025 (200+ individual programs), and 2026 wins guidance is $70–80M. Over $200M won since mid-2023 transformation launch.
Recent performance:
FY2025 revenue $422M, GAAP net loss $24.4M. Adjusted EBITDA $49M (11.6% margin). Adjusted gross margin 18.5% (Q4: 18.8%). Adjusted operating income $14.2M, roughly 3x prior year. Q4 revenue $104.7M. Guided 2026 revenue $445–465M, EBITDA $50–60M. Long-term target: $600M revenue, $80M EBITDA by 2030. New business wins averaging 27% gross margin. CapEx doubling from ~$10M to ~$20M (75% growth-focused). Stock ~$2.20, market cap ~$110M. Board launched strategic/financial alternatives review committee to address capital stack.
Our Verdict
A turnaround micro-cap pivoting from automotive precision components to data center liquid cooling and electric grid infrastructure — at ~0.25x trailing revenue with $43M in new DC/grid wins, the optionality is real but profitability is absent and execution risk is high.
Structural trends
Structural
59
/ 100
Moat
3/10
Precision machining capability but not proprietary; competitive market, no pricing power
AI Exp.AI Exposure
Stub~8% AI
Play Type
SpeculativeAI Growth
~20%
Rel. Value
63
ATTRACTIVENN Inc is a precision industrial components company based in Charlotte, North Carolina, operating through two segments: Mobile Solutions (precision machined products — automotive, defense, medical) and Power Solutions (precision stamped products — electric grid, data center, defense electronics). The company makes parts measured in microns — gears, shafts, couplings, cable assemblies, and stamped components that require extreme dimensional accuracy.
Revenue mix by end market (FY2025)
Electrical grid and data center ~60% of sales. Defense electronics ~10% and growing strongly (key customer: Raytheon missile defense systems). China automotive (BYD, Geely) is a meaningful portion. Commercial vehicle recovering after three-year freight recession. Global automotive (NA/SA/Europe) is the legacy business being intentionally shrunk. Medical and industrial round out the balance.
Data center products — two angles. First, high-precision watertight couplings for liquid-cooled computing cabinetry. These must maintain micron-level tolerances to prevent coolant leaks that would destroy server hardware. CEO Bevis noted "the cabinets are dense with this type of product." Second, cable assemblies and busbar power distribution hardware at the top of server racks — high-voltage cable assemblies NN can manufacture with existing capabilities. Management hired a dedicated DC team in late 2025: Mohammed Farhad (technical leader, electrical products background), Tim Merrill, and three account managers with industry knowledge. DC is described as an "immediate ramp-up" market because the supply industry is behind demand — not a long gestation like medical or automotive qualification. Management attended Data Center World 2026 to expand the pipeline and intends to report TAM sizing on the next earnings call.
Electric grid and power infrastructure is the larger established business within Power Solutions. Power Solutions segment posted $178.6M in pro forma FY2025 revenue (+5.3% YoY), with Q4 at $45.5M (+14.9% YoY). Growth driven by precious metals pass-through pricing plus new program launches in electrical and defense. NN operates in this market in both the U.S. and China. They recently secured a large multiyear re-win in electrical power business, beating two large global competitors.
The transformation is real but the balance sheet is the constraint. Since mid-2023, NN closed/consolidated four plants, right-sized ~800 employees, eliminated an expensive executive layer, and achieved $15M in cost-outs in 2025 (targeting $10M more in 2026). SG&A dropped to 10.9% of sales. Adjusted operating income hit $14.2M in FY2025, roughly 3x prior year. Adjusted gross margins at 18.5% are tracking toward the 20% five-year goal, and new wins are coming in at ~27% gross margin — meaningfully accretive to the mix. CEO describes 2025 as "the third consecutive year of improved results" and FY2025 EBITDA as "pushing towards company highs."
But the capital stack is "problematic." CEO Bevis stated directly: "our capital stack is problematic — there is basically too much debt plus preferred equity." The Board launched a strategic and financial alternatives committee in December 2025 to examine options. No concrete updates yet. The company remains "capital-constrained" — free cash flow goes first to cash interest on debt, second to CapEx. Despite this, CapEx is doubling from ~$10M to ~$20M in 2026, with 75% allocated to growth programs. Management approves growth CapEx program-by-program, evaluating market, customer, and part. Long-term targets: $600M organic revenue, $80M adjusted EBITDA by 2030 (10% CAGR), supported by ~5% market growth plus ~2% share gain.
Supply Chain Dependencies
Upstream Suppliers
The Catch
NNBR is a $110M market cap company losing money on a GAAP basis, with a capital stack the CEO calls "problematic." The electrical grid and data center business is actually ~60% of sales — bigger than it looks — but the DC liquid cooling angle specifically is early and small (first win just achieved). The 60% figure is dominated by legacy electrical grid stamping, not data center cooling. Precision couplings are important components but not proprietary — larger competitors with stronger balance sheets could enter or undercut. The Board is reviewing strategic alternatives, which could mean anything from refinancing to a sale — or nothing. This is a micro-cap turnaround where the balance sheet is the existential risk. Size positions accordingly.
If They Win
If liquid cooling becomes universal for AI data centers and NN's precision couplings + cable assemblies become specified into major cooling and rack platforms, the company completes its transformation from an automotive parts maker into a precision infrastructure supplier spanning data centers, electric grid, and defense. Revenue reaches management's $600M target by 2030 with $80M EBITDA (13%+ margins), driven by new wins at 27% gross margin replacing legacy automotive at lower margins. The Board's strategic review either fixes the capital stack (unlocking faster growth) or leads to a sale at a premium to the current $110M market cap. At $600M revenue / $80M EBITDA, this is a $500M–800M enterprise value company — 5x to 7x the current market cap. Defense electronics (Raytheon) and commercial vehicle pre-buy provide near-term growth while DC cooling scales.
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Not financial advice. All scores generated via AI algorithms using public data.