Everspin Technologies makes magnetoresistive memory — chips that keep their contents when the power is cut — and the fastest-growing line in its June quarter was not a chip at all. Non-product revenue reached $3.4m against $2.1m a year earlier, the first partial-quarter recognition of a $40m, 30-month subcontract to supply Toggle MRAM to a US prime contractor. Product sales still carried the quarter, at $15.3m, up 38% year over year, taking the company total to a record $18.7m, up 42%.

That record arrived into a share price that has fallen 30% over three months and sits 64% below its 12 May high of $44.01. For an 85-person company in Chandler, Arizona with a $374m market value, the question is whether the decline marks something breaking in a business selling into long design-in cycles, or the deflation of a spike. On the evidence, it is the second — and that matters because the stock is still not priced as a broken business.

What is actually growing

Revenue growth has accelerated for three straight quarters — 11.8% year over year in the December quarter, 13.2% in March, 42% in June — after sales fell 21% in full-year 2024. The June quarter's product strength came from industrial automation, helped by a recovery in Japan, from European energy management, and from aerospace and defense, including a first geostationary satellite win: Astro Digital selected the 64-megabit PERSYST magnetic memory for boot and telemetry on its Raven Bus.

"Driven by strong product revenue coupled with initial non-product revenue under our recently signed $40 million contract with a US prime contractor," chief executive Sanjeev Aggarwal said of the quarter on the 5 August call. Management cautioned that recognition on that contract follows a bell curve rather than a straight line. September-quarter revenue is guided to $19.5-20.5m, roughly 40% above the $14.06m of a year earlier.

The defense channel widened again on 2 September, when Everspin and Teledyne HiRel Semiconductors announced a partnership to push 64-, 128- and 256-megabit PERSYST parts into avionics, radar, electronic-warfare payloads and satellite electronics, with customer availability anticipated in the fourth quarter.

What is not growing is the thing the company's name is most often attached to. Its Compute Express Link work — the memory-pooling standard — is a proof-of-concept demonstration pairing externally developed controller intellectual property with an AMD field-programmable gate array, plus a memorandum of understanding with MaxLinear. It earns nothing today.

The loss is a legal bill

Operating expenses rose to $14.5m from $8.7m, including $4.0m of litigation and $1.1m of non-recurring engineering. Avalanche Technology sued in January over four patents on magnetic materials and filed a parallel complaint at the International Trade Commission; the claims target the spin-transfer-torque line only, not Toggle memory or sensors, and the import-ban proceeding is targeted for completion on 6 July 2027. Guidance bakes in about another $4m of it this quarter. Everspin ended June with $43.9m of cash, no debt, and $0.2m of operating cash flow — thin, but funded.

The reported gross margin of 53.9%, up from 51.3%, is mix rather than pricing power: management guided product gross margins down to the mid-to-upper 40s on packaging and test cost increases at outsourced assemblers and higher gold prices, with the higher-margin contract revenue holding the company total above 50%.

What the price knows

On 12 May, 14.0m shares changed hands at the peak; recent volume averages 0.86m a day. A year ago the stock was $6.80 on a similar revenue base, which means the sales multiple has roughly doubled even after the fall. At 5.98x trailing and 5.01x forward sales — earnings multiples are meaningless against a trailing loss — the shares carry about 4.3x 2027 consensus revenue of $86.2m, and 3.7x the company's own target of more than $100m by fiscal 2029. Thursday's 4.7% drop came alongside a broad memory selloff, with Western Digital down 7.0% and Micron 4.3%, against a 0.5% decline for the S&P 500.

So the business earns none of the de-rating and the valuation excuses most of it. Accelerating revenue, a widening defense book and a funded balance sheet are not the profile of a company losing its market; what has compressed is the speculative premium a May squeeze installed. The risks that remain are specific and dated: a legal bill that has to stop growing, and a product margin management has already guided lower.

Everspin's stated path past $100m of revenue runs through a 256-megabit part entering production in mid-2027 and a foundry partner, Taiwan Semiconductor, expected to join at the end of this year — neither of which has produced a shipped chip yet.