Shares of Kimball Electronics (KE) surged 14.40% in intraday trading on Thursday, following the company's better-than-expected fiscal fourth quarter 2025 earnings report and its plans to aggressively expand its medical contract manufacturing business.

The electronics manufacturing services provider reported quarterly earnings of $0.34 per share, significantly beating analyst estimates of $0.15 per share. Quarterly sales came in at $380.47 million, also surpassing the consensus expectation of $333.19 million.

Investors were particularly encouraged by Kimball Electronics' strategic pivot towards higher-margin medical contract manufacturing operations. The company highlighted its new 300,000-square-foot medical facility in Indianapolis, designed to accommodate several hundred million dollars in annual revenue. CEO Ric Phillips emphasized the potential for "higher EBITDA margins" in the medical contract manufacturing space and the company's focus on "blue-chip customers with long product life cycles."

Adding to the positive sentiment, B. Riley analyst Mike Crawford raised his price target on Kimball Electronics to $29.50 from $24, maintaining a Buy rating on the shares. This analyst upgrade likely contributed to the stock's strong performance.

While the company's fiscal 2026 revenue guidance indicated a potential 2-9% year-over-year decline, management expressed confidence in returning to positive top-line growth in fiscal 2027, driven by the strategic expansion in the medical segment. This long-term growth outlook, coupled with the company's improved balance sheet and cash flow discipline, appears to have resonated well with investors.