Orbital Corporation Limited (OEC) AI Stock Analysis

• Market Cap: AU$20.59M
• Dividend Yield: N/A
• Average Volume (3M): 157.18K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.21
• Revenue Growth: -34.48%
• EPS Growth: -26000.00%
• Country: AU
• Employees: 87
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): >-0.01
• Shares Outstanding: 179,065,430
• 10 Day Avg. Volume: 168,534
• 30 Day Avg. Volume: 157,176
• PEG Ratio: <0.01
• Price to Book (P/B): 1.74
• Price to Sales (P/S): 1.81
• P/FCF Ratio: -2.62
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 42 Neutral
• Price Target: AU$0.11 ▼(-35.29% Downside)
• Action: Upgraded Date: 01/29/26
• Date: Action: Upgraded 01/29/26

The score is primarily weighed down by weak financial performance, including declining revenue, margin compression, ongoing losses, and negative operating/free cash flow. Technical indicators add only modest support (near-term stabilization but broader downtrend and negative MACD). Valuation is constrained by a negative P/E and no indicated dividend yield.

Positive Factors

Aerospace & Defense niche

Operating in the Aerospace & Defense sector gives Orbital exposure to structurally stable government and defense spending, high technical barriers, and long procurement cycles. These traits support sustained demand for specialized engineering suppliers and can underpin multi‑year revenue visibility.

Improving leverage

A moderate and improving debt-to-equity ratio (0.35) and a near-50% equity ratio provide balance-sheet headroom. Lower leverage reduces refinancing risk and interest burden, supporting durable operational flexibility and capacity to fund R&D or win longer-term contracts without excessive external financing.

Free cash flow improvement

A sharp improvement in free cash flow growth (166.49%) signals movement toward healthier cash conversion. Even if partly driven by a smaller negative base, sustained positive FCF growth would materially strengthen liquidity, reduce dependence on external funding, and permit reinvestment in product development or commercialization.

Negative Factors

Declining revenue

Revenues contracting at -7.37% indicate weakening market traction or loss of customer volume. Persistent top-line decline reduces scale economies, strains fixed-cost absorption, and limits resources for R&D and commercialization, making a sustainable recovery harder without clear new growth drivers.

Gross margin compression

A severe fall in gross margin (55.27% to 29.47%) erodes the company’s ability to generate operating profit from sales. Structural margin pressure reduces resilience to cost inflation and competitive pricing, impairing long-term reinvestment capacity and making profitability restoration more challenging.

Negative profitability & cash flow

Sustained negative profitability and operating cash flow indicate the core business currently fails to cover operating costs. This deteriorates ROE, increases reliance on financing, and constrains strategic initiatives. Unless operational margins recover, financial stability and growth investments remain at risk.

Orbital Corporation Limited Business Overview & Revenue Model

Company Description

Orbital Corporation Limited provides integrated propulsion systems and flight critical components for tactical uncrewed aerial vehicles in Australia and the United States. It also provides modular propulsion solution, design and development, machining and prototyping, product integration, testing and validation, manufacturing and production, and servicing and support services. The company was formerly known as Orbital Engine Corporation Limited and changed its name to Orbital Corporation Limited in October 2004. Orbital Corporation Limited was incorporated in 1988 and is headquartered in Balcatta, Australia.

How the Company Makes Money

Orbital Corporation Limited generates revenue primarily through the sale of its specialized aerospace and defense products and services. The company’s revenue model is built on several key streams, including contracts with government defense agencies, partnerships with private sector aerospace companies, and licensing agreements for its proprietary technologies. Additionally, OEC engages in research and development projects that are often funded through grants or partnerships, which further contribute to its income. Significant partnerships with industry leaders in defense and aerospace amplify its market reach and enhance its product offerings, driving sales and profitability.

Orbital Corporation Limited Financial Statement Overview

Summary

Weak financial profile: declining revenue (-7.37%), sharply lower gross margin (55.27% in 2020 to 29.47% in 2025), and negative net/EBIT/EBITDA margins. Balance sheet leverage is moderate (debt-to-equity 0.35) with a reasonable equity ratio (49.17%), but negative ROE and negative operating/free cash flow pressure overall quality.

Income Statement

Orbital Corporation Limited has faced declining revenue and profitability over recent years. The company reported a negative revenue growth rate of -7.37% in the latest year, indicating a contraction in sales. Gross profit margin has decreased significantly from 55.27% in 2020 to 29.47% in 2025, reflecting challenges in maintaining cost efficiency. The net profit margin is negative, highlighting ongoing losses. The EBIT and EBITDA margins are also negative, indicating operational inefficiencies.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.35, which is an improvement from previous years, suggesting better leverage management. However, the return on equity is negative, indicating that the company is not generating profits from its equity base. The equity ratio stands at 49.17%, showing a reasonable level of equity financing relative to total assets.

Cash Flow

Orbital Corporation's cash flow situation is concerning, with negative operating and free cash flows. The free cash flow growth rate is positive at 166.49%, but this is due to a smaller negative base in the previous year. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is high at 2.11, suggesting cash flow issues relative to reported earnings.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	6.57M	8.23M	12.57M	16.78M	15.72M	31.20M
Gross Profit	-1.78M	2.42M	-2.27M	7.98M	5.32M	14.82M
EBITDA	-5.07M	-2.62M	1.65M	1.56M	-5.13M	-7.67M
Net Income	-3.80M	-4.30M	67.00K	20.00K	-11.13M	-11.45M
Balance Sheet
Total Assets	16.99M	17.42M	22.23M	19.94M	22.61M	29.79M
Cash, Cash Equivalents and Short-Term Investments	3.98M	1.54M	5.53M	3.04M	2.95M	3.70M
Total Debt	4.13M	2.98M	6.07M	6.06M	9.25M	11.81M
Total Liabilities	7.14M	8.85M	11.40M	13.00M	20.41M	22.44M
Stockholders Equity	9.85M	8.57M	10.83M	6.94M	2.20M	7.34M
Cash Flow
Free Cash Flow	-21.50K	-5.67M	-1.19M	-3.78M	-4.60M	-2.42M
Operating Cash Flow	112.00K	-2.69M	-34.00K	-3.49M	-4.09M	-1.69M
Investing Cash Flow	-1.50M	-2.51M	-790.00K	-372.00K	-2.20M	-2.12M
Financing Cash Flow	2.22M	1.49M	3.30M	3.89M	5.39M	-1.07M

Orbital Corporation Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.17
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:OEC, the sentiment is Neutral. The current price of 0.17 is above the 20-day moving average (MA) of 0.11, above the 50-day MA of 0.12, and above the 200-day MA of 0.16, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 48.89 is Neutral, neither overbought nor oversold. The STOCH value of 23.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:OEC.

Orbital Corporation Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SSH	57 Neutral	AU$21.80M	10.26	6.19%	―	-6.52%	-20.79%
VEE	54 Neutral	AU$90.98M	-5.00	5.66%	1.28%	-14.88%	-56.89%
EOS	51 Neutral	AU$1.82B	84.41	-30.81%	―	-72.88%	―
EMB	50 Neutral	AU$17.44M	17.66	4.57%	4.32%	-15.54%	-26.61%
OEC	42 Neutral	AU$20.59M	-3.14	-42.31%	―	-34.48%	-26000.00%
AEI	41 Neutral	AU$9.62M	-1.97	―	―	-0.52%	-38.84%

Orbital Corporation Limited Corporate Events

Orbital posts deeper half-year loss despite modest revenue growth

Orbital Corporation Limited reported half-year revenue from continuing operations of A$4.89 million for the period ended 31 December 2025, a modest 2% increase on the prior corresponding period. However, the company swung to a net loss after tax of A$1.50 million, reflecting a 576% deterioration in profit performance and signalling operational or cost pressures despite the slight revenue growth.

Net tangible assets per share improved to 1.81 cents at 31 December 2025 from 0.79 cents at 30 June 2025, indicating a stronger underlying asset base for shareholders over the period. The board has decided not to declare a dividend for the half year, suggesting a focus on preserving capital and potentially funding ongoing operations or investment needs amid the weaker earnings result.

The most recent analyst rating on (AU:OEC) stock is a Hold with a A$0.11 price target. To see the full list of analyst forecasts on Orbital Corporation Limited stock, see the AU:OEC Stock Forecast page.

Orbital UAV Wins Initial Engine Upgrade Deal for Textron Military Drone Fleet

Orbital UAV has secured an initial order worth about A$475,000 from Textron Systems to supply 25 power upgrade kits for the Textron Aerosonde 4.7 unmanned aerial vehicles currently deployed with the U.S. military. The kits, based on Orbital’s FlexDT technology, are intended to boost performance, reliability and efficiency of the Lycoming-built 75HFE engines that power this Group 3 UAV.

With an estimated 1,350 of these engines already in global service, the contract opens a potentially substantial follow-on revenue stream as the broader fleet is upgraded. Orbital is also in talks with Textron Systems about a wider upgrade program and the possible integration of an Orbital-manufactured 75cc engine in future Aerosonde 4.7 production, complementing its existing supply of 150HFE engines to the newer Aerosonde 4.8 platform and deepening its strategic role across multiple Textron UAS platforms.

The most recent analyst rating on (AU:OEC) stock is a Hold with a A$0.11 price target. To see the full list of analyst forecasts on Orbital Corporation Limited stock, see the AU:OEC Stock Forecast page.

Orbital UAV Improves Cash Position and Ramps Up Production of New 350cc UAV Engine

Orbital UAV reported a materially improved cash performance for the quarter to 31 December 2025, with operating cash inflow of $0.5 million and a modest net cash outflow of $0.2 million, ending the period with $3.5 million in cash, an undrawn $2 million loan facility and expected R&D grant receipts in the March 2026 quarter that together provide additional funding headroom. Operationally, the company continued deliveries of its 150cc heavy fuel engines to a major defence systems customer, completed an engineering upgrade and initial deliveries for Textron’s Aerosonde 4.7 platform, advanced Indian flight trials with further engine shipments, and moved to capitalise on rising demand for higher-capacity UAV powerplants by starting manufacture of 10 units of its new 350cc heavy fuel engine for integration and evaluation by both defence and commercial customers, underscoring its positioning as a key propulsion supplier to the rapidly expanding UAV market.

The most recent analyst rating on (AU:OEC) stock is a Hold with a A$0.13 price target. To see the full list of analyst forecasts on Orbital Corporation Limited stock, see the AU:OEC Stock Forecast page.

Orbital UAV Sets February 2026 Expiry for 17.5 Million Listed Options

Orbital Corporation has notified the market that 17.5 million quoted options (ASX: OECO), each exercisable at A$0.35, will expire at 5:00pm WST on 7 February 2026, with official quotation of these options on the ASX ceasing on 2 February 2026. If holders do not provide cleared funds to exercise their options by the expiry date, the options will lapse unexercised and the associated rights will cease, leaving the company’s share capital at 179,065,431 ordinary shares unless some or all of the options are converted into shares before expiry, a process that could modestly increase the company’s equity base and potentially impact its capital structure depending on the level of take-up.

The most recent analyst rating on (AU:OEC) stock is a Hold with a A$0.16 price target. To see the full list of analyst forecasts on Orbital Corporation Limited stock, see the AU:OEC Stock Forecast page.