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Optex Systems (OPXS)
:OPXS
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Optex Systems Holdings
(NASDAQ:OPXS)
Rating:75Outperform
Price Target:
$13.00
▲(8.79% Upside)
Optex Systems Holdings (OPXS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$89.87M
Dividend YieldN/A
Average Volume (3M)69.50K
Price to Earnings (P/E)19.0
Beta (1Y)0.70
Revenue Growth21.77%
EPS Growth36.36%
CountryUS
Employees128
SectorIndustrials
Sector Strength84
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.26
Shares Outstanding6,912,919
10 Day Avg. Volume51,742
30 Day Avg. Volume69,504
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)<0.01
Price to Sales (P/S)1.53
P/FCF Ratio1.04K
Enterprise Value/Market Cap0.41
Enterprise Value/Revenue0.99
Enterprise Value/Gross Profit3.45
Enterprise Value/Ebitda5.64
Forecast
1Y Price Target
$12.00Price Target Upside0.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Optex Systems Holdings Business Overview & Revenue Model
Company DescriptionOptex Systems Holdings (OPXS) is a leading manufacturer specializing in optical sighting systems and assemblies primarily for the defense industry. The company operates within the precision optics sector, producing a range of products such as rifle and surveillance sights, periscopes, and other related optical components. Optex Systems Holdings primarily serves military and government clients, providing essential equipment for various vehicle platforms and weapon systems.
How the Company Makes MoneyOptex Systems Holdings generates revenue through the sale of its precision optical products to defense contractors and government agencies. The company's key revenue streams include contracts for the development and supply of optical sighting systems and components used in military vehicles and weapon systems. Additionally, Optex may engage in long-term contracts and partnerships with major defense contractors, which contribute significantly to its earnings. The company's financial performance is influenced by defense budget allocations and the demand for military modernization and equipment upgrades.
Optex Systems Holdings Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q2-2025)
| % Change Since: 74.45%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
Overall, the earnings call reflects a strong performance with significant revenue growth, improved profitability, and a robust cash position. However, challenges remain with a decreased backlog and ongoing legacy order issues. The commercial segment also underperformed, but the strong military segment and recent large orders indicate a positive outlook.Q2-2025 Updates
Positive Updates
Significant Revenue Growth
Revenue increased by 22.2% year-over-year for the six months and 25.9% for the three months ending March 30, 2025, with total revenue reaching $10.7 million for the three-month period and $18.9 million for the six-month period.
Improved Gross Profit and Operating Income
Gross profit increased by 31.4% for the three-month period and 29.4% for the six-month period. Operating income rose by 65% for the three months and 65.2% for the six months, ending at $2.2 million and $3.2 million respectively.
Strong Cash Flow and Balance Sheet
Operating cash flow was $3.9 million, significantly up from the prior year's $1 million, driven by higher revenue and net income. Cash balance increased to $3.5 million from $1 million as of the end of September 2024.
Reduction in Inventory
Inventory decreased by $0.9 million, reflecting higher shipments and efficient inventory use.
New Order for Laser Filters
A significant $5.7 million order for laser filters was received shortly after the reporting period, indicating strong future demand.
Negative Updates
Decrease in Backlog
The backlog as of March 30, 2025, was $41.1 million, down from $44.2 million the previous year, a decrease of $3.1 million or 7%.
Legacy Order Challenges
There are ongoing challenges with legacy orders from the pre-COVID period, reflecting about 7% of the backlog, which are fully reserved on the balance sheet.
Commercial Revenue Decline
There was a noted reduction in commercial line revenues, offsetting some of the gains from the military defense revenue.
Company Guidance
During the Optex Systems Holdings, Inc. Second Quarter Earnings Call, guidance detailed several key financial metrics. The company reported a significant year-over-year revenue increase, with a 22.2% rise for the six-month period and a 25.9% jump for the three-month period ending March 30, 2025. Gross profit also surged, increasing by 31.4% for the three months and 29.4% for the six months. Operating income rose by 65% for the three months and 65.2% for the six months, while net income increased by 66.5% and 74.9% for the respective periods. The company concluded the three-month period with an EBITDA of $2.4 million, up from $1.6 million in the prior year. Cash flow also improved significantly, with operating cash flow rising to $3.9 million compared to $1 million the previous year. These results were driven by higher revenue, improved gross margins, and stable G&A spending. Additionally, Optex reduced its inventory by $0.9 million, which, along with other working capital changes, contributed to the enhanced cash flow.Optex Systems Holdings Financial Statement Overview
Summary
Optex Systems Holdings demonstrates strong financial health with substantial revenue growth and efficient cash flow management. While profitability ratios such as Net Profit Margin can be optimized further, the overall financial stability and cash flow generation are commendable. The balance sheet is healthy with low leverage, although improving Return on Equity would enhance shareholder value.Income Statement
Optex Systems Holdings has shown strong revenue growth with a significant increase in total revenue from previous years. The Gross Profit Margin is healthy, indicating effective cost management. However, the Net Profit Margin is relatively low compared to the revenue, which suggests higher operational or interest expenses. The EBIT and EBITDA margins are solid, reflecting efficient operations.75
Positive
Balance Sheet
The company maintains a strong equity base with a high Equity Ratio, indicative of good financial stability. The Debt-to-Equity Ratio is low, reducing the risk associated with leverage. However, Return on Equity could be improved to better reflect the profitability yielded from shareholders' investments.70
Positive
Cash Flow
Optex Systems Holdings exhibits strong operating cash flow, significantly exceeding net income, which reflects excellent cash generation efficiency. The Free Cash Flow is robust, showing the company's ability to fund operations and growth without additional financing. There is substantial growth in Free Cash Flow, indicating improved operational efficiency.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 37.43M | 33.99M | 25.66M | 22.38M | 18.22M | 25.89M |
| Gross Profit | 10.78M | 9.53M | 6.62M | 4.90M | 2.52M | 6.09M |
| EBITDA | 6.60M | 5.31M | 3.13M | 1.95M | 2.30M | 2.62M |
| Net Income | 4.89M | 3.77M | 2.26M | 1.28M | 2.13M | 1.82M |
Balance Sheet | ||||||
| Total Assets | 27.48M | 25.52M | 22.22M | 18.54M | 20.86M | 20.34M |
| Cash, Cash Equivalents and Short-Term Investments | 3.53M | 1.01M | 1.20M | 934.00K | 3.90M | 4.70M |
| Total Debt | 2.13M | 3.40M | 3.90M | 3.37M | 3.66M | 1.83M |
| Total Liabilities | 5.89M | 6.71M | 7.36M | 6.13M | 5.14M | 6.37M |
| Stockholders Equity | 21.58M | 18.81M | 14.86M | 12.41M | 15.71M | 13.98M |
Cash Flow | ||||||
| Free Cash Flow | 3.82M | 1.10M | -672.00K | 1.78M | 207.00K | 3.76M |
| Operating Cash Flow | 4.79M | 1.78M | -296.00K | 2.04M | 481.00K | 3.91M |
| Investing Cash Flow | -997.00K | -1.73M | -376.00K | -257.00K | -274.00K | -152.00K |
| Financing Cash Flow | -581.00K | -245.00K | 942.00K | -4.75M | -1.01M | -127.00K |
Optex Systems Holdings Technical Analysis
Positive
11.95
Price Trends
11.02
Positive
8.67
Positive
8.04
Positive
Market Momentum
0.29
Positive
57.48
Neutral
55.94
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 11.95 is below the 20-day moving average (MA) of 12.46, above the 50-day MA of 11.02, and above the 200-day MA of 8.04, indicating a bullish trend. The MACD of 0.29 indicates Positive momentum. The RSI at 57.48 is Neutral, neither overbought nor oversold. The STOCH value of 55.94 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
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $89.87M | 18.97 | 25.69% | ― | 21.77% | 36.36% | |
66 Neutral | $81.31M | 55.99 | 3.10% | ― | -29.61% | -78.85% | |
64 Neutral | $10.63B | 16.03 | 5.49% | 2.12% | 2.74% | -23.62% | |
60 Neutral | $43.81M | 24.08 | 7.62% | ― | -7.34% | -88.84% | |
51 Neutral | $55.23M | ― | -594.07% | ― | ― | ― | |
45 Neutral | $35.47M | ― | 153.01% | ― | -64.51% | 7.09% | |
44 Neutral | $30.79M | ― | -109.05% | ― | -18.70% | 84.35% |
* Industrials Sector Average
Performance Comparison
OPXS
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KITT
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SIDU
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SPAI
Safe Pro Group, Inc.
3.64
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-12.08%
Optex Systems Holdings Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Optex Systems Holdings Renews Credit Facility Agreement
Positive
May 22, 2025
On May 21, 2025, Optex Systems Holdings, Inc. and its subsidiary renewed their credit facility with Texas Capital Bank, entering into a new Business Loan Agreement effective May 22, 2025. This agreement provides a $3 million revolving line of credit with a commitment period of 24 months, expiring on May 22, 2027. The credit facility includes a variable interest rate and various covenants, and it is secured by the operating assets of the borrowers. This renewal is significant for Optex’s financial operations, ensuring continued access to capital and potentially impacting its strategic planning and stakeholder interests.
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.