NN, Inc. is a diversified industrial company that combines advanced engineering and production capabilities with in depth materials science expertise to design and manufacture high precision components and assemblies for a variety of end markets on a global basis. The company operates 27 facilities located in North America, South America, Europe and China. These facilities support production for automotive, general industrial, medical, electrical and other industrial…
NN, Inc. is a diversified industrial company that combines advanced engineering and production capabilities with in depth materials science expertise to design and manufacture high precision components and assemblies for a variety of end markets on a global basis. The company operates 27 facilities located in North America, South America, Europe and China. These facilities support production for automotive, general industrial, medical, electrical and other industrial sectors. NN, Inc. leverages its process technologies to deliver components that meet strict tolerance requirements and are used in systems ranging from power steering and braking to electrical contacts and medical instruments.
NN, Inc. generates revenue by selling its manufactured components and assemblies to original equipment manufacturers and other industrial customers. Its product portfolio includes power steering systems, braking components, transmission parts, gasoline fuel system components, heating ventilation and air conditioning units, diesel injection and emissions treatment devices, electrical contacts and connectors, precision stampings, aerospace and defense hardware and medical tools for orthopedics and surgical applications. Sales are primarily made under supply contracts or commercial terms with customers who pass through material cost fluctuations via price adjustments. In 2025 approximately 60% of the company’s sales were to customers in North America, 19% to Asia, 10% to South America and 11% to Europe.
The company operates through the following segments.
• Mobile Solutions: This segment focuses on growth in the automotive, general industrial and medical end markets. It manufactures high volume components such as power steering parts, braking systems, transmission elements, gasoline fuel system parts, heating ventilation and air conditioning units, diesel injection devices and emissions treatment equipment. The segment leverages tight tolerance machining and progressive stamping to deliver parts that meet strict customer specifications.
• Power Solutions: This segment targets growth in the electrical, general industrial, automotive and medical end markets. It produces electrical contacts, connectors, contact assemblies and precision stampings for the electrical market, high precision parts for aerospace and defense applications and a range of tools and instruments for orthopedics and medical/surgical markets. The segment combines material science expertise with advanced production techniques to create components that satisfy strict tolerance and performance requirements.
NN, Inc. holds a strong position in the high precision components market due to its ability to maintain tolerances below one micron while producing millions of parts per day. The company differentiates itself through a combination of in house tool design, process know-how and a zero defect approach that reduces variability and defects throughout the product life cycle. Its competitors in the Mobile Solutions space include Anton Häring KG, A. Berger Holding GmbH & Co. KG, Brovedani Group, Burgmaier Technologies GmbH & Co. KG, CIE Automotive S. A. and IMS Gear SE & Co. KGaA. In the Power Solutions arena the company faces competition from Checon Corporation, Electrical Contacts Ltd., Interplex Industries Inc., J&J Machining LLC, Norstan Inc., Owens Industries Inc., Composidie Inc. and Eaton Corporation. NN, Inc. believes its technical competence, proven product development track record, global platform and commitment to quality, price and service give it a competitive edge.
NN, Inc. serves hundreds of customers worldwide, primarily manufacturers in the automotive, electrical, agricultural, construction, residential devices and equipment, aerospace and defense, medical, heating ventilation and air conditioning, fluid power and diesel engine sectors. In 2025 the top ten customers accounted for approximately 49% of the company’s net sales. Geographically, about 60% of sales were to customers in North America, 19% to Asia, 10% to South America and 11% to Europe.
Sectors:Industrials · HealthcareSector rationaleThe company's primary business is the design and manufacture of high-precision components and assemblies for automotive, aerospace, defense, and general industrial markets, which falls under Industrial Machinery and Metal Fabrication. A secondary sector is justified because the company maintains a distinct and substantial business line producing medical tools for orthopedics and surgical applications, which belongs in the Healthcare sector.Industries:+1 moreMetal FabricationIndustrialsPrimaryNN, Inc. designs and manufactures high precision components, assemblies, and precision stampings for a variety of industrial customers. The company specifically utilizes progressive stamping and tight tolerance machining to produce parts for automotive, electrical, and general industrial sectors.Medical DevicesHealthcareSecondaryThe company manufactures medical tools for orthopedics and surgical applications, which are sold as components and instruments for the medical market.DefenseIndustrialsSecondaryThe Power Solutions segment produces high precision parts specifically for aerospace and defense applications.Classified using BQ-MICSCIK: 0000918541
Investment Thesis
▲ Bull case
NNBR's strategic shift away from legacy automotive markets toward high-growth end markets like electric grid, data center, and defense electronics is creating a structural margin expansion opportunity that the market is underestimating. Management highlighted that their growth markets now constitute 44% of the business versus 35% in 2023, directly correlating with improved profitability—Power Solutions segment EBITDA margins reached 18.7% in Q1 FY26 versus 14.5% in the prior year. This mix shift is not merely tactical but represents a deliberate, multi-year portfolio transformation where higher-margin industrial and technology-focused segments are replacing lower-margin automotive exposure. The company's ability to grow sales with 22 of its top 30 customers while maintaining broad-based growth across 700 total customers indicates sustainable demand diversification, reducing reliance on any single end market or geographic region. Crucially, management noted that their long-term financial goals—$600 million in net sales and $80 million in adjusted EBITDA by 2029—are being accelerated from a 2030 timeline due to stronger-than-expected execution in growth initiatives, implying the market may be pricing in outdated timelines for value creation. The data center opportunity, specifically liquid cooling connectors, represents a hidden catalyst with a TAM estimated between $1.5 billion and $6 billion and growth rates up to 40% annually, where NNBR already has an LTM business exceeding $70 million and is targeting $100 million in the near term. Their investment in 17 new plating machines (with half already received) and integration of proprietary fluid management trade secrets positions them to capture increased content per rack—a lever management described as having "multiples" of their current $70 million TTM revenue potential. This is not a temporary cyclical rebound but a structural repositioning where operating leverage from their leaner footprint will amplify EBITDA growth as volume scales in higher-margin markets, a dynamic not fully reflected in current valuations given their guidance for only 9% net sales growth in FY26 despite visible momentum in new business wins totaling $42.9 million in Q1 alone.
NNBR's strategic shift away from legacy automotive markets toward high-growth end markets like electric grid, data center, and defense electronics is creating a structural margin expansion opportunity that the market is underestimating. Management highlighted that their growth markets now constitute 44% of the business versus 35% in 2023, directly correlating with improved profitability—Power Solutions segment EBITDA margins reached 18.7% in Q1 FY26 versus 14.5% in the prior year. This mix shift is not merely tactical but represents a deliberate, multi-year portfolio transformation where higher-margin industrial and technology-focused segments are replacing lower-margin automotive exposure. The company's ability to grow sales with 22 of its top 30 customers while maintaining broad-based growth across 700 total customers indicates sustainable demand diversification, reducing reliance on any single end market or geographic region. Crucially, management noted that their long-term financial goals—$600 million in net sales and $80 million in adjusted EBITDA by 2029—are being accelerated from a 2030 timeline due to stronger-than-expected execution in growth initiatives, implying the market may be pricing in outdated timelines for value creation. The data center opportunity, specifically liquid cooling connectors, represents a hidden catalyst with a TAM estimated between $1.5 billion and $6 billion and growth rates up to 40% annually, where NNBR already has an LTM business exceeding $70 million and is targeting $100 million in the near term. Their investment in 17 new plating machines (with half already received) and integration of proprietary fluid management trade secrets positions them to capture increased content per rack—a lever management described as having "multiples" of their current $70 million TTM revenue potential. This is not a temporary cyclical rebound but a structural repositioning where operating leverage from their leaner footprint will amplify EBITDA growth as volume scales in higher-margin markets, a dynamic not fully reflected in current valuations given their guidance for only 9% net sales growth in FY26 despite visible momentum in new business wins totaling $42.9 million in Q1 alone.
NNBR's apparent resilience in offsetting automotive weakness through diversification masks significant execution risks in its growth initiatives that the market is ignoring, particularly regarding the medical segment's delayed ramp-up and overreliance on volatile precious metals pass-through. While management celebrated medical as a "steady and growing market," they conceded it remains a small business and is "slower than we expected relative to the other two diversification endeavors," with Harold Bevis acknowledging it did not contribute to Q1 sales growth despite years of investment and certifications. This delay undermines the thesis of balanced diversification, as the company's long-term margin expansion depends on all three growth pillars scaling simultaneously—yet medical's persistent lag suggests deeper challenges in penetrating OEM supply chains or achieving cost parity with legacy automotive volumes. Furthermore, the Q1 sales growth of 12.1% was artificially inflated by $3.8 million in higher precious metals pass-through (explicitly cited by CFO Bohnert as a driver), a temporary tailwind that management admitted would not contribute beyond Q2 due to flat sequential pricing—meaning core organic growth excluding this pass-through effect was likely closer to 6-7%, a figure far less impressive than the headline 12% suggests. The market may be overlooking how tariff exposure remains a material unhedged risk; Bevis acknowledged metal tariffs from Germany and elsewhere must be passed through with a lag, creating working capital pressure and potential margin compression if customers resist price increases—a dynamic evidenced by their need to "prove" incurred inflation via POs before adjusting prices, a process requiring active customer service work and carrying execution risk. Finally, while management emphasized available capacity in Power Solutions for rapid ramp-ups, they simultaneously revealed ongoing efforts to refinance preferred stock—a multiyear process Bevis attributed partly to "turnover at the investment bank"—indicating persistent structural leverage concerns that could limit financial flexibility if growth initiatives require unexpected CapEx, such as the end-of-year plating equipment installation whose funding timing remains uncertain despite being deemed "medium-sized" and guided for the year.
NNBR's apparent resilience in offsetting automotive weakness through diversification masks significant execution risks in its growth initiatives that the market is ignoring, particularly regarding the medical segment's delayed ramp-up and overreliance on volatile precious metals pass-through. While management celebrated medical as a "steady and growing market," they conceded it remains a small business and is "slower than we expected relative to the other two diversification endeavors," with Harold Bevis acknowledging it did not contribute to Q1 sales growth despite years of investment and certifications. This delay undermines the thesis of balanced diversification, as the company's long-term margin expansion depends on all three growth pillars scaling simultaneously—yet medical's persistent lag suggests deeper challenges in penetrating OEM supply chains or achieving cost parity with legacy automotive volumes. Furthermore, the Q1 sales growth of 12.1% was artificially inflated by $3.8 million in higher precious metals pass-through (explicitly cited by CFO Bohnert as a driver), a temporary tailwind that management admitted would not contribute beyond Q2 due to flat sequential pricing—meaning core organic growth excluding this pass-through effect was likely closer to 6-7%, a figure far less impressive than the headline 12% suggests. The market may be overlooking how tariff exposure remains a material unhedged risk; Bevis acknowledged metal tariffs from Germany and elsewhere must be passed through with a lag, creating working capital pressure and potential margin compression if customers resist price increases—a dynamic evidenced by their need to "prove" incurred inflation via POs before adjusting prices, a process requiring active customer service work and carrying execution risk. Finally, while management emphasized available capacity in Power Solutions for rapid ramp-ups, they simultaneously revealed ongoing efforts to refinance preferred stock—a multiyear process Bevis attributed partly to "turnover at the investment bank"—indicating persistent structural leverage concerns that could limit financial flexibility if growth initiatives require unexpected CapEx, such as the end-of-year plating equipment installation whose funding timing remains uncertain despite being deemed "medium-sized" and guided for the year.