Gooch & Housego (GHH) AI Stock Analysis

• Market Cap: £202.54M
• Dividend Yield: 2.19%
• Average Volume (3M): 79.90K
• Price to Earnings (P/E): 25.6
• Beta (1Y): 1.09
• Revenue Growth: 10.66%
• EPS Growth: 21.19%
• Country: UK
• Employees: 911
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.20
• Shares Outstanding: 27,370,726
• 10 Day Avg. Volume: 105,270
• 30 Day Avg. Volume: 79,900
• PEG Ratio: -0.27
• Price to Book (P/B): 1.26
• Price to Sales (P/S): 0.98
• P/FCF Ratio: 64.83
• 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): 0.45
• Revenue Forecast (FY): £174.23M

• Rating: 65 Neutral
• Price Target: 796.00 p ▲(28.80% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is driven primarily by improving profitability and revenue growth, but is held back by weak cash flow conversion and a sharp decline in free cash flow growth. Technically, the stock shows strong upward momentum versus key moving averages, while valuation is a notable headwind due to the elevated P/E despite a modest dividend yield.

Positive Factors

Revenue Growth

Gooch & Housego reported revenue growth in 2025, supporting a multi-quarter expansion trend. Durable top-line growth underpins scale benefits, helps absorb fixed costs on engineered programs, and supports sustained investment in R&D and production capability for OEM program conversions.

Profitability Turnaround

The swing to a positive net margin reflects improved cost control and operating leverage in higher-value photonics products. A sustained move from loss to profit suggests better pricing, mix or efficiency, giving management room to reinvest and strengthen ROE over the medium term if maintained.

Defensible End Markets & Manufacturing

Serving aerospace, defense and life‑sciences creates long product lifecycles, high qualification barriers and premium pricing. Combined with in‑house precision optics/coatings and subsystem assembly, this vertical capability builds customer stickiness and captures more value across programs.

Negative Factors

Weak Cash Conversion

A low operating cash flow to net income ratio indicates earnings are not converting into cash efficiently. This strains liquidity for capex, NRE on custom programs and working capital for series production, increasing reliance on external funding for durable growth plans.

Free Cash Flow Decline

A 70% drop in free cash flow growth materially reduces internal funding capacity. Persistently weak FCF constrains reinvestment, makes the firm more dependent on debt or equity to scale programs, and raises execution risk for multi‑year engineered product transitions.

Gross Margin Pressure

A slight decline in gross margin signals emerging cost or pricing pressures within component and subsystem lines. If structural (supply chain, input costs, or competitive pricing), sustained margin compression could erode recent profitability gains and limit ability to fund strategic investments.

Gooch & Housego Business Overview & Revenue Model

Company Description

Gooch & Housego PLC engages in the manufacture and sale of acousto-optics, electro-optics, fiber optics, and precision optics and systems in the United Kingdom, North America, Europe, the Asia Pacific, and internationally. It operates through Aerospace & Defence, Life Sciences/Bio-photonics, and Industrial segments. It offers acousto-optic products, such as acousto-optic modulators, deflectors, frequency shifters, model lockers, multi-channel modulators, pulse pickers, Q-switches, tunable filters, and RF drivers; crystal optics, including crystals and nonlinear optics, lithium niobate wafers, and periodically-poled lithium niobite; and electro-optics, such as pockels cells, lithium niobate Q-switches, and pockels cell drivers. It also provides fiber optics, such as DFB lasers and modules, fiber coupled pump lasers, high speed detectors and power combiners, benchtop laser controllers, polarization-maintaining and single-mode fused fiber couplers, polarization diverse receivers, ruggedized and wideband couplers, planar lightwave circuits, and fiber coupled modulators; precision optics, including beamsplitters, corner cubes, optical domes, optical windows and flats, precision lenses, precision mirrors, precision prisms, ring laser gyroscope components, synchrotron mirrors, waveplates, Hy-Per bond, magnetoheological finishing, optical coatings, single point diamond turning, and superpolishing; lens systems, such as broadband, LWIR, MWIR, and Vis-SWIR lens systems; and vision systems for armored fighting vehicles, including embedded image periscope and sighting systems, enhanced drivers vision system, sabre commander/gunner sights, spares and repairs, spectre camera pack, and unity vision periscopes. The company offers its products for use in semiconductor and microelectronic, metrology, telecommunications, and scientific research industries; and mission-critical applications. Gooch & Housego plc was founded in 1948 and is headquartered in Ilminster, the United Kingdom.

How the Company Makes Money

GHH makes money primarily by selling photonics components and higher-value engineered subsystems to OEM and industrial customers, generating revenue when products are delivered under customer purchase orders and longer-running supply arrangements. Key revenue streams typically include: (1) Standard and configurable components: sales of catalog and semi-custom photonic parts (e.g., acousto-optic/electro-optic devices, fiber-optic components, precision optics and coatings) used as building blocks in customer systems; revenue is earned per unit sold, with pricing reflecting specification, performance, and volume. (2) Custom engineered solutions and subsystems: design-and-build work where GHH develops application-specific optical/photonic modules or assemblies (often involving optics, coatings, opto-mechanics, and/or fiber integration); revenue is earned through prototype/NRE (non-recurring engineering) and subsequent production orders if the program transitions to series manufacture. (3) Program-based and repeat production supply: recurring sales from customers once a device is designed into an end system, creating ongoing demand tied to the customer’s production volumes and platform lifecycles; this is particularly relevant where qualification and switching costs are high. (4) Aftermarket/spares and support (where applicable): revenue from replacement units, repairs, and sustaining engineering for deployed systems and long-life programs; specific contribution is null. Factors that contribute to earnings include operating in regulated/high-reliability markets (e.g., aerospace/defense and life sciences) that can support premium specifications and longer product lifecycles, and leveraging in-house manufacturing capabilities (precision optics, coatings, and photonic device fabrication/assembly) to capture value across the supply chain. Specific significant partnerships and their financial impact are null.

Gooch & Housego Financial Statement Overview

Summary

Income statement strength (revenue up 5.05% in 2025 and net margin improved to 2.35% from a loss in 2024) is offset by weaker cash generation (free cash flow growth down 70.2% and operating cash flow to net income at 0.21) and somewhat higher leverage (debt-to-equity up to 0.43).

Income Statement

Gooch & Housego has shown consistent revenue growth over the past year, with a 5.05% increase in 2025. The gross profit margin has slightly decreased from previous years, indicating some pressure on cost management. However, the net profit margin has improved significantly from a negative position in 2024 to a positive 2.35% in 2025, showcasing a turnaround in profitability. EBIT and EBITDA margins are stable, reflecting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased to 0.43 in 2025, indicating a higher reliance on debt financing compared to previous years. However, the return on equity has improved to 3.01%, suggesting better utilization of equity. The equity ratio remains strong, indicating a solid capital structure with a significant portion of assets financed by equity.

Cash Flow

There is a notable decline in free cash flow growth, down by 70.2% in 2025, which could be a concern for liquidity. The operating cash flow to net income ratio is relatively low at 0.21, indicating potential challenges in converting income into cash. The free cash flow to net income ratio is moderate, suggesting some ability to generate cash relative to net income.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	150.49M	135.99M	148.48M	124.80M	124.07M
Gross Profit	42.71M	41.65M	36.93M	39.06M	41.32M
EBITDA	20.03M	18.34M	18.84M	8.89M	15.79M
Net Income	3.54M	-6.38M	4.05M	-2.01M	3.40M
Balance Sheet
Total Assets	206.86M	166.31M	192.61M	176.09M	160.71M
Cash, Cash Equivalents and Short-Term Investments	7.96M	6.62M	7.29M	6.00M	8.35M
Total Debt	51.05M	32.43M	39.00M	25.07M	17.59M
Total Liabilities	89.42M	57.92M	72.88M	57.55M	46.43M
Stockholders Equity	117.44M	108.39M	119.73M	118.54M	114.28M
Cash Flow
Free Cash Flow	2.28M	8.94M	8.85M	-2.03M	10.00M
Operating Cash Flow	6.84M	14.19M	16.17M	6.54M	16.25M
Investing Cash Flow	-16.03M	-3.89M	-18.49M	-9.29M	-9.96M
Financing Cash Flow	9.84M	-10.89M	4.19M	299.00K	-17.27M

Gooch & Housego Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 618.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GHH, the sentiment is Neutral. The current price of 618 is below the 20-day moving average (MA) of 765.00, below the 50-day MA of 709.47, and above the 200-day MA of 597.98, indicating a neutral trend. The MACD of 11.55 indicates Positive momentum. The RSI at 48.03 is Neutral, neither overbought nor oversold. The STOCH value of 15.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:GHH.

Gooch & Housego Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSCV	77 Outperform	£551.74M	10.73	8.49%	2.09%	0.49%	61.73%
KMK	73 Outperform	£67.15M	3.57	7.39%	―	36.61%	―
RSW	72 Outperform	£2.82B	17.58	8.06%	2.12%	3.15%	-13.57%
GHH	65 Neutral	£202.54M	25.56	3.10%	2.19%	10.66%	21.19%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TTG	54 Neutral	£211.54M	-4.83	-31.42%	―	-16.33%	-448.12%
WPHO	39 Underperform	£31.99M	-21.06	-17.36%	―	-14.81%	-1362.50%

Gooch & Housego Corporate Events

Gooch & Housego faces shareholder backlash on pay at AGM

Gooch & Housego reported that all resolutions at its Annual General Meeting were passed except the advisory vote to approve its Remuneration Committee Report, which was rejected by a majority of shareholders. The board said it had consulted major institutional investors beforehand but will now undertake further engagement and publish the outcome within six months, while also seeking feedback on a share-allotment related special resolution that attracted more than 20% opposition.

Despite the remuneration setback, shareholders backed the company’s financial statements, the recommended final dividend, director re‑elections, auditor re‑appointment and authorities to allot shares and repurchase stock. The voting pattern highlights growing investor scrutiny of executive pay and capital authorities, signalling pressure on the board to adjust its remuneration approach and justify dilution‑related powers to maintain support from key institutional holders.

The most recent analyst rating on (GB:GHH) stock is a Hold with a £820.00 price target. To see the full list of analyst forecasts on Gooch & Housego stock, see the GB:GHH Stock Forecast page.

Gooch & Housego Order Book Surges as Defence and Industrial Demand Rebounds

Gooch & Housego reported strong order book growth since the start of its new financial year, with orders rising to £168.3m, driven in particular by increased demand from aerospace and defence customers in the U.S. and Europe. Recent acquisitions Global Photonics and Phoenix Optical are seeing robust demand, prompting capacity expansion within existing sites in line with planned capital expenditure.

Industrial markets are showing early signs of recovery, especially in semiconductors and industrial lasers, while supply chain issues in life sciences Pockels cells have been resolved and production is expected to ramp up in the second half. Net debt has edged down to £28.0m, and the board has left full-year expectations unchanged, citing a strong order book, self-help measures and a growing pipeline of multi-year contracts as it targets mid-teen returns on sales over the medium term.

The most recent analyst rating on (GB:GHH) stock is a Hold with a £825.00 price target. To see the full list of analyst forecasts on Gooch & Housego stock, see the GB:GHH Stock Forecast page.

Gooch & Housego Confirms Start Date for New Chief Financial Officer

Gooch & Housego PLC has confirmed that James Corte will join the company as Chief Financial Officer and Executive Director, with his appointment effective from 9 April 2026. The move finalises a previously announced leadership transition and is expected to strengthen the company’s senior management team as it continues to pursue its strategy in the specialist optics and photonics market.

The most recent analyst rating on (GB:GHH) stock is a Hold with a £760.00 price target. To see the full list of analyst forecasts on Gooch & Housego stock, see the GB:GHH Stock Forecast page.

Gooch & Housego Executives Sell Shares to Cover Tax on Vested Awards

Gooch & Housego PLC, a specialist manufacturer of photonic components and systems, serves markets that depend on precision optical and photonic technologies. The company reported that Chief Executive Officer Charlie Peppiatt and Company Secretary Gareth Crowe sold ordinary shares on 12 January 2026 following the vesting of share awards, with Peppiatt disposing of 41,617 shares and Crowe 7,564 shares at 614p per share to cover associated tax liabilities, leaving Peppiatt holding approximately 0.2% of the company’s issued share capital; the transactions are routine PDMR dealings and do not indicate a change in the company’s strategic direction.

The most recent analyst rating on (GB:GHH) stock is a Hold with a £623.00 price target. To see the full list of analyst forecasts on Gooch & Housego stock, see the GB:GHH Stock Forecast page.

Gooch & Housego Grants New Long-Term Incentive Awards to Senior Executives

Gooch & Housego has granted new share-based awards under its Long Term Incentive Plan to Chief Executive Officer Charlie Peppiatt and Company Secretary Gareth Crowe, comprising Restricted Stock Awards and LTIP awards that will vest in January 2029 subject to service and performance conditions. The awards, linked to total shareholder return, earnings per share and ESG metrics, underline the company’s continued use of performance-aligned executive incentives designed to support long-term value creation and align senior management interests with those of shareholders.

The most recent analyst rating on (GB:GHH) stock is a Hold with a £623.00 price target. To see the full list of analyst forecasts on Gooch & Housego stock, see the GB:GHH Stock Forecast page.

Gooch & Housego Issues New Shares Following Management Incentive Vesting

Gooch & Housego PLC, the AIM‑quoted specialist in photonic components and systems, has expanded its issued share capital as part of its long‑term incentive arrangements for senior management. The company has issued and allotted 171,216 new ordinary shares of 20p each following the vesting of awards under its long‑term incentive plan, including to persons discharging managerial responsibilities such as Chief Executive Officer Charlie Peppiatt and Company Secretary Gareth Crowe. Application has been made for these shares to be admitted to trading on AIM on 12 January 2026, after which the company’s issued share capital will comprise 27,370,726 ordinary shares with one voting right each and no shares held in treasury, providing an updated denominator for shareholders assessing disclosure thresholds on their holdings.

The most recent analyst rating on (GB:GHH) stock is a Hold with a £638.00 price target. To see the full list of analyst forecasts on Gooch & Housego stock, see the GB:GHH Stock Forecast page.

Gooch & Housego Posts 2025 Annual Report and Sets Date for 2026 AGM

Gooch & Housego PLC has distributed its Annual Report and Financial Statements for the year ended 30 September 2025, along with the notice of its 2026 Annual General Meeting, to shareholders and has made these documents available on its investor website. The AGM is scheduled for 27 February 2026 at the company’s head office in Somerset, providing shareholders with a formal opportunity to review performance, governance and strategic direction as the photonics specialist continues to engage with investors and other stakeholders.

The most recent analyst rating on (GB:GHH) stock is a Hold with a £638.00 price target. To see the full list of analyst forecasts on Gooch & Housego stock, see the GB:GHH Stock Forecast page.