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Optex Systems Holdings
(NASDAQ:OPXS)
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Rating:61Neutral
Price Target:
$14.00
▲(21.95% Upside)
Action:Reiterated
Date:06/12/26
The score is primarily held back by weak and volatile cash flow despite healthy reported margins, with additional near-term risk highlighted by the earnings call (cash use, expense growth, and timing-driven revenue volatility). Offsetting factors include moderate positive technical momentum and management’s reaffirmed second-half guidance supported by a sizable backlog, while valuation (P/E ~22) is neither clearly cheap nor overly expensive.
Positive Factors
Profitability
Sustained gross and operating margins near current levels indicate the company's core manufacturing and pricing mix remains profitable. Over 2–6 months, healthy margins support reinvestment, coverage of fixed costs, and resilience to modest volume swings in defense program deliveries.
Negative Factors
Weak Cash Generation
Persistent negative operating and free cash flow undermines liquidity and forces reliance on working capital or external funding. Over the next several months, weak cash conversion can constrain capex flexibility, increase financing costs, and amplify risk if government payments or contract timings slip.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability
Sustained gross and operating margins near current levels indicate the company's core manufacturing and pricing mix remains profitable. Over 2–6 months, healthy margins support reinvestment, coverage of fixed costs, and resilience to modest volume swings in defense program deliveries.
Read all positive factors
Optex Systems Holdings Key Performance Indicators (KPIs)
Any
Income Before Taxes by Segment
Shows each segment’s pre-tax profitability, revealing which lines produce healthy margins and which depend on support from others. Indicates operational strength and cash-generation potential and signals whether underperforming segments may need restructuring or are funding investment in growth.
Shows each segment’s pre-tax profitability, revealing which lines produce healthy margins and which depend on support from others. Indicates operational strength and cash-generation potential and signals whether underperforming segments may need restructuring or are funding investment in growth.
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The Fly
The FlyOptex Systems Holdings (OPXS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$89.09M
Dividend YieldN/A
Average Volume (3M)44.88K
Price to Earnings (P/E)22.8
Beta (1Y)0.87
Revenue Growth10.02%
EPS Growth-16.48%
CountryUS
Employees128
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.60
Shares Outstanding6,959,873
10 Day Avg. Volume40,512
30 Day Avg. Volume44,876
Financial Highlights & Ratios
PEG Ratio0.51
Price to Book (P/B)3.67
Price to Sales (P/S)2.15
P/FCF Ratio13.85
Enterprise Value/Market Cap-27.41
Enterprise Value/Revenue-59.29
Enterprise Value/Gross Profit-202.52
Enterprise Value/Ebitda-439.74
Forecast
1Y Price Target
$16.10Price Target Upside40.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.64
Revenue Forecast (FY)$47.50M
Optex Systems Holdings Business Overview & Revenue Model
Company Description
Optex Systems Holdings, Inc. specializes in the production and supply of advanced optical sighting equipment and related assemblies. The company's primary clients include the U.S. Department of Defense, international military organizations, and co...
How the Company Makes Money
Optex Systems makes money primarily by manufacturing and selling defense-related optical and electro-optical products and related assemblies, with revenue largely tied to U.S. Department of Defense programs. Key revenue streams include (1) sales o...
Optex Systems Holdings Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: material short-term headwinds (a pronounced quarter revenue decline, reduced EBITDA, cash drawdown and higher operating expenses) were balanced by solid backlog and bookings, improved gross margins, no revolver debt, and explicit management guidance expecting a stronger second half as delayed government awards ramp. Management emphasized investments in R&D, manufacturing capacity, and organizational improvements to position the company for longer-term growth.Positive Updates
Backlog and Bookings Strength
Ending backlog approximately $36.6M and new orders increased 3.8% year-over-year to $16.3M for the first half, providing visibility into the remainder of fiscal 2026 and steady bookings tied to defense programs.
Negative Updates
Sharp Quarter Revenue Decline (Timing-Related)
Quarter revenue reported as $0.6M compared to $10.7M in the prior year period, a decline of approximately 94.4% year-over-year. Management cited federal government shutdown and delays in appropriations that pushed awards into the second half.
Read all updates
Q2-2026 Updates
Positive
Negative
Backlog and Bookings Strength
Ending backlog approximately $36.6M and new orders increased 3.8% year-over-year to $16.3M for the first half, providing visibility into the remainder of fiscal 2026 and steady bookings tied to defense programs.
Read all positive updates
Company Guidance
Management guided full-year revenue of $43.0–$45.0 million and adjusted EBITDA of $7.5–$8.5 million, saying they expect a stronger second half as delayed federal awards from the FY26 appropriations cycle move forward; they also guided full-year capital expenditures of $2.0–$2.5 million (having spent $0.8M YTD with $1.1M committed). Key reported metrics include Q2 revenue of $0.6M (vs. $10.7M LY) and 6‑month revenue of $18.8M (essentially flat vs. $18.9M LY), Q2 gross profit $3.4M and 6‑month gross profit $5.5M, gross margin 35.2% in Q2 (up from 31.3%) and 29.2% YTD (vs. 29.0% LY), Q2 operating expenses $1.7M (YTD $3.7M), Q2 net income $1.3M ($0.19/diluted share), Q2 adjusted EBITDA $2.0M (YTD $2.8M), cash $4.2M (vs. $6.4M at fiscal year end) with no revolver debt, used $1.3M operating cash (vs. $4.0M generated LY), working capital $22.6M (vs. $21.1M), new orders up 3.8% YoY to $16.3M YTD, and ending backlog of about $36.6M.Optex Systems Holdings Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
58
Neutral
Cash Flow
32
Negative
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 41.18M | 41.34M | 33.99M | 25.66M | 22.38M | 18.22M |
| Gross Profit | 12.05M | 12.06M | 9.53M | 6.62M | 4.90M | 2.52M |
| EBITDA | 5.55M | 6.87M | 5.31M | 3.13M | 1.95M | 2.30M |
| Net Income | 4.12M | 5.15M | 3.77M | 2.26M | 1.28M | 2.13M |
Balance Sheet | ||||||
| Total Assets | 30.86B | 30.06M | 25.52M | 22.22M | 18.54M | 20.86M |
| Cash, Cash Equivalents and Short-Term Investments | 4.16B | 6.39M | 1.01M | 1.20M | 934.00K | 3.90M |
| Total Debt | 1.64B | 1.85M | 3.40M | 3.90M | 3.37M | 3.66M |
| Total Liabilities | 4.56B | 5.76M | 6.71M | 7.36M | 6.13M | 5.14M |
| Stockholders Equity | 26.30B | 24.29M | 18.81M | 14.86M | 12.41M | 15.71M |
Cash Flow | ||||||
| Free Cash Flow | -546.73M | 6.43M | 50.00K | -672.00K | 1.78M | 207.00K |
| Operating Cash Flow | -90.30M | 6.93M | 1.78M | -296.00K | 2.04M | 481.00K |
| Investing Cash Flow | -456.43M | -504.00K | -1.73M | -376.00K | -257.00K | -274.00K |
| Financing Cash Flow | -89.00K | -1.05M | -245.00K | 942.00K | -4.75M | -1.01M |
Optex Systems Holdings Technical Analysis
Positive
11.48
Price Trends
11.50
Positive
12.31
Positive
13.37
Negative
Market Momentum
0.34
Positive
55.89
Neutral
44.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPXS, the sentiment is Positive. The current price of 11.48 is below the 20-day moving average (MA) of 12.46, below the 50-day MA of 11.50, and below the 200-day MA of 13.37, indicating a neutral trend. The MACD of 0.34 indicates Positive momentum. The RSI at 55.89 is Neutral, neither overbought nor oversold. The STOCH value of 44.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OPXS.
Optex Systems Holdings Risk Analysis
Optex Systems Holdings disclosed 22 risk factors in its most recent earnings report. Optex Systems Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Optex Systems Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $89.09M | 22.79 | 0.06% | ― | 10.02% | -16.48% | |
54 Neutral | $66.58M | 37.78 | 6.74% | ― | -7.98% | -7.88% | |
49 Neutral | $36.97M | -15.08 | -5.07% | ― | -26.36% | -260.65% | |
46 Neutral | $262.44M | -3.06 | -82.97% | ― | -9.23% | 64.77% | |
43 Neutral | $84.33M | -5.57 | -119.17% | ― | -19.76% | -0.17% | |
42 Neutral | $7.87M | -0.01 | 9999.00% | ― | 249.33% | 97.72% |
* Industrials Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.