Technology Firm Advances Quantum Sensing Applications

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Frequency Electronics Inc. (FEIM:NASDAQ) is a U.S.-based developer and manufacturer of high-precision timing and frequency control products, a niche but vital segment of the aerospace and defense industry. Founded in 1961 and headquartered in Uniondale, New York, the company specializes in components like atomic clocks, master oscillators, and synchronization systems used in satellite payloads, defense platforms, secure communications, and other mission-critical applications. Its customers include major defense contractors and government agencies.

Frequency Electronics operates primarily through its wholly owned facilities, maintaining vertical integration over its manufacturing process. This allows the company to control quality and delivery times — crucial factors when supplying for national security-related programs. According to the company, its products have been part of over 120 space programs, including the historic Voyager missions.

Powering the Invisible: Inside the Timing and Frequency Sector

The market for precision time and frequency (PT&F) solutions plays a foundational role in enabling advanced technologies like GPS navigation, satellite communication, wireless networks, air traffic control systems, and high-frequency financial trading. Frequency's focus is the most specialized and accurate part of this sector: atomic clocks.

"Overall this is a very bullish chart and given that volume in recent weeks is not climactic, it is expected to continue to accelerate to the upside," Technical Analyst Clive Maund said.

Atomic clocks serve as the heartbeat of satellite constellations and are essential for GPS accuracy, synchronized data collection, and autonomous systems.

As specified in the company's presentation from Q1 2025, the global atomic clock market currently stands at approximately US$600 million annually and is projected to surpass US$1 billion by 2035. Frequency believes its own addressable market will grow from under US$500 million today to more than US$1 billion, particularly in space-related products.

Multibagger Monitor on Substack, in a June 16 article, emphasized Frequency's status as "the undisputed U.S. leader in precision time and frequency solutions for satellite applications," especially as national security priorities shift toward increased space capabilities.

A Strategic Position in a Changing Defense Landscape

Frequency Electronics is directly exposed to two major U.S. defense spending trends: LEO (Low Earth Orbit) satellite proliferation and the Trump administration's "Golden Dome" missile shield initiative. The Golden Dome has an initial appropriation of US$25 billion, with estimates ranging as high as US$500 billion to US$1 trillion. The program aims to modernize and expand U.S. air and space defenses through sensor upgrades, interceptors, and rapid satellite deployment.

Multibagger Monitor wrote that Frequency is already benefitting from the "surge in A&D spend via the Golden Dome initiative" and called the core PT&F business "monopolistic," citing vertical integration and a lack of domestic competitors in the space clock segment. The publication further noted that the company's technology is embedded in a wide range of critical applications — many of which are classified and not publicly disclosed.

CEO Tom McClelland has emphasized that the future lies in smaller, cheaper, and faster-to-launch satellites, given the vulnerability of expensive, long-lead-time geostationary satellites. These changes align with broader goals from the U.S. Space Development Agency and are expected to benefit suppliers like Frequency that are already embedded in satellite and defense infrastructure supply chains.

Beyond PT&F, Frequency is now establishing itself in the emerging field of quantum sensing. This branch of quantum technology uses entanglement and other quantum properties to make ultra-precise measurements. Applications range from GPS-free navigation to magnetic field detection and infrastructure monitoring.

Unlike many quantum-focused startups, Frequency is already generating revenue from real-world projects. Notably, the company is collaborating with defense contractor Leidos and the MIT Lincoln Laboratory to develop quantum technology for electronic warfare protection and GPS resilience. According to Multibagger Monitor, this partnership should establish "a beachhead and credibility for further quantum sensing projects."

The publication also praised Frequency for its strategic outreach, particularly the company's annual quantum sensing summit that brings together leaders from the Department of Defense, NASA, Sandia National Lab, and Northrop Grumman. "It seems rather astonishing, and promising, that the head of quantum sensing for DoD, Sandia National Lab, the Air Force Research Lab, the NIH, NASA . . . all have relationships with a US$170 million market cap company," the article noted.

Valuation and Catalysts

Despite its long-standing presence and strategic role in sensitive technologies, Frequency trades at modest valuation multiples. Its trailing twelve-month P/E ratio stood at 7.64x, while LTM EV/EBITDA was 13.85x, its lowest since 2016. Multibagger Monitor attributed this disconnect to a combination of under-the-radar operations, lack of analyst coverage, and the technical complexity of the business.

Backlog growth from US$53 million in fiscal year 2023 to US$73 million in fiscal year 2024 suggests improving fundamentals. The article noted that "as revenues shed their cyclicality . . .  there's no reason the multiple shouldn't expand to at least 17-20x, where it has been in the past."

For the quantum sensing segment, the market is still nascent. However, if it reaches US$1 billion in size by 2030 as projected, Frequency could become one of its most credible early leaders. 

Technical Outlook Signals Accelerating Bull Market

According to Technical Analyst Clive Maund in a June 25 analysis shared with Streetwise Reports, Frequency Electronics appeared to be in a "powerful bull market that started after its late 2022 low." Maund explained that this upward trend had been "accelerating and looks set to continue to accelerate," citing strong technical support levels and bullish moving average patterns. He noted that "larger corrections have found support in the vicinity of its rising 200-day moving average with moving averages in strongly bullish alignment."

Maund highlighted a recent breakout as a key development: "Early this week it broke out of a large consolidation pattern that had been building out since last December, gapping higher on very big volume." While he acknowledged that "this is clearly a bullish signal," he pointed out that the stock made "a couple of almost identical moves last year and on both occasions it then spent a long time consolidating / reacting back afterwards before gaining more traction, although on the 2nd occasion it did this, it made further gains first."

Despite the potential for near-term consolidation, Maund concluded with a strong overall assessment: "Overall this is a very bullish chart and given that volume in recent weeks is not climactic, it is expected to continue to accelerate to the upside." 

Ownership and Share Structure

According to Refinitiv, Institutions own 57.32% of Frequency Electronics. Of them, Edenbrook Capital LLC owns the most with 19.36%, Wax Asset Management holds 7%, Dimensional Fund Advisors has 5.01%, The Vanguard Group has 4%, and Renaissance Technologies holds 3.28%.

Management and Insiders hold 27.69% with Johnathan B. Brolin holding 19.34%, Russell M. Sarachek at 4.52%, and Thomas Mcclelland holding 1.74%.

Strategic Entities hold 5.18%. The rest is retail.

The company has 6.5 million free float shares and a market capitalization of US$216.75 million. The 52 week range is US$7.96 to US$24.77.