Optex Systems Holdings (OPXS) AI Stock Analysis

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Optex Systems Holdings

(NASDAQ:OPXS)

Rating:78Outperform

Price Target:

$12.00

▲(11.94%Upside)

Optex Systems Holdings is performing well, driven by strong financial results and positive technical indicators. The company benefits from substantial revenue growth, efficient cash flow, and robust operating income improvements. While valuation is moderate, and some challenges persist in the backlog and commercial segment, the positive momentum and strategic actions, such as credit facility renewal, contribute to its overall robust standing.

Optex Systems Holdings (OPXS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$71.55M

Dividend YieldN/A

Average Volume (3M)58.30K

Price to Earnings (P/E)15.1

Beta (1Y)0.59

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. Volume97,443

30 Day Avg. Volume58,304

Financial Highlights & Ratios

PEG Ratio-1.41

Price to Book (P/B)1.62

Price to Sales (P/S)0.00

P/FCF Ratio11.25

Enterprise Value/Market Cap0.18

Enterprise Value/Revenue<0.01

Enterprise Value/Gross Profit<0.01

Enterprise Value/Ebitda0.01

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Optex Systems Holdings Business Overview & Revenue Model

Company DescriptionOptex Systems Holdings (OPXS) operates in the defense and aerospace sectors, specializing in the manufacturing of optical sighting systems and assemblies primarily for military applications. The company's product portfolio includes periscopes, rifle and surveillance sights, and other optical components used in vehicles, weapon systems, and other military installations.

How the Company Makes MoneyOptex Systems Holdings makes money through the sale of its optical sighting systems and related components to governments and defense contractors. The company's revenue streams are primarily derived from contracts and purchase orders from the U.S. Department of Defense and other international military organizations. Optex Systems often enters into long-term contracts and partnerships with large defense contractors, which provide a stable source of income. The company also benefits from ongoing maintenance and upgrade services for its existing products, contributing to its revenue.

Optex Systems Holdings Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q2-2025)

% Change Since: 56.50%|

Next Earnings Date:Aug 19, 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 has demonstrated strong financial health with robust revenue growth and efficient cash flow management. Despite a relatively low Net Profit Margin, the company maintains a healthy balance sheet with low leverage and solid equity ratios.

Income Statement

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Sep 2024	Dec 2023	Dec 2022	Dec 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
4.76B	33.99M	25.66M	22.38M	18.22M	25.89M
	Gross Profit
1.72B	9.53M	6.62M	4.90M	2.52M	6.09M
	EBIT
1.20B	4.82M	2.79M	1.65M	-494.00K	2.88M
	EBITDA
1.20B	5.31M	3.13M	1.95M	2.30M	2.62M
	Net Income Common Stockholders
28.42M	3.77M	2.26M	1.28M	2.13M	1.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.53B	1.01M	1.20M	934.00K	3.90M	4.70M
	Total Assets
27.48B	25.52M	22.22M	18.54M	20.86M	20.34M
	Total Debt
2.13B	3.40M	3.90M	3.37M	3.66M	1.83M
	Net Debt
-1.40B	2.39M	2.70M	2.43M	-239.00K	-2.87M
	Total Liabilities
5.89B	6.71M	7.36M	6.13M	5.14M	6.37M
	Stockholders Equity
21.58B	18.81B	14.86M	12.41M	15.71M	13.98M
Cash Flow		Free Cash Flow
3.53B	50.00K	-672.00K	1.78M	207.00K	3.76M
	Operating Cash Flow
3.99B	1.78M	-296.00K	2.04M	481.00K	3.91M
	Investing Cash Flow
-463.53M	-1.73M	-376.00K	-257.00K	-274.00K	-152.00K
	Financing Cash Flow
26.42M	-245.00K	942.00K	-4.75M	-1.01M	-127.00K

Optex Systems Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price10.72

Price Trends

50DMA

7.66

Positive

100DMA

6.81

Positive

200DMA

7.39

Positive

Market Momentum

MACD

0.63

Negative

RSI

68.18

Neutral

STOCH

58.65

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 10.72 is above the 20-day moving average (MA) of 9.21, above the 50-day MA of 7.66, and above the 200-day MA of 7.39, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 68.18 is Neutral, neither overbought nor oversold. The STOCH value of 58.65 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 (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPXS	78 Outperform	$71.55M	15.12	25.69%	―	21.77%	36.36%
VTSI	67 Neutral	$68.70M	47.20	3.10%	―	-29.61%	-78.85%
Sector *	66 Neutral	$4.44B	12.06	5.34%	6.22%	4.17%	-11.81%
CVU	52 Neutral	$40.30M	21.83	7.62%	―	-7.34%	-88.84%
SPAI	49 Neutral	$41.12M	―	-594.07%	―	―	―
KITT	48 Neutral	$35.02M	―	153.01%	―	-64.51%	7.09%
SIDU	42 Neutral	$27.27M	―	-109.05%	―	-18.70%	84.35%

* Industrials Sector Average

Performance Comparison

OPXS

Optex Systems Holdings

10.72

3.59

50.35%

CVU

CPI Aerostructures

3.10

0.80

34.78%

VTSI

VirTra

6.07

-1.47

-19.50%

KITT

Nauticus Robotics

0.94

-3.61

-79.34%

SIDU

Sidus Space, Inc. Class A

1.49

-0.96

-39.18%

SPAI

Safe Pro Group, Inc.

2.72

-1.42

-34.30%

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.