Citron Research Says Market Is ‘Missing’ This Tesla-Linked Small Cap Growth Play: Retail Traders Rush In

Vishay Precision Group, Inc. (VPG) shares jumped over 20% on Wednesday, with a long call from former short-seller Citron Research providing the upward thrust.

In a report released on Wednesday, Citron said Vishay Precision, spun-off from Vishay Intertechnology in July 2010, Inc. (VSH), presents a rare overlooked opportunity. 

The research firm surmised that the design contract Vishay Precision secured in late 2023 with an unnamed, leading humanoid robot developer is none other than Tesla's Optimus.

Vishay Precision, which is a niche provider of precision measurement and sensing technologies crucial for robotic precision tasks, said in November that the design win was in the beta phase. 

Citron noted that Tesla unveiled Optimus Gen 2 a month later, emphasizing advanced tactile and force/torque sensors. The firm added that the technology is precisely VPG's specialty.

The firm also noted that Vishay Precision's management said on its August earnings call that its customer planned thousands of robots internally by the end of 2025, which perfectly aligns with Tesla CEO Elon Musk's statements.

Calling humanoid robots as Silicon Valley's next gold rush, Citron said, "Yet, remarkably, the market seems oblivious to Vishay Precision Group (VPG), the critical "picks-and-shovels" supplier quietly powering Tesla's  ambitious humanoid plans."

The firm also noted that Vishay Precision traded at remarkably modest multiples, while it has net cash of over $25 million and consistently generated positive free cash flow.

"Citron believes the market is missing a clear Tesla-driven growth story in Vishay Precision," the firm added.

According to the firm, the current market cap of $300+ million severely undervalued the near-term growth trajectory and long-term potential.

Following Citron's report that triggered a rally in the Vishay Precision stock, its following on Stocktwits jumped by 22% over 24 hours on Wednesday.

On Stocktwits, retail sentiment toward Vishay Precision stock moderated to 'bullish' (66/100) by late Wednesday from the 'extremely bullish' mood that prevailed a day ago. The message volume on the stream stayed 'extremely high.'

A watcher said if Citron's claim was true, the stock could be in for strong gains, given its low float.

Another user concurred with Citron about the valuation being very cheap.

Vishay Precision stock has traded in a 52-week range of $20.83 to $35.26, and Wednesday's surge has helped the stock gain 20% for the year-to-date period.

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