KWESST Micro Systems (KWE) AI Stock Analysis

• Market Cap: C$5.94M
• Dividend Yield: N/A
• Average Volume (3M): 986.00
• Price to Earnings (P/E): ―
• Beta (1Y): -0.05
• Revenue Growth: 121.88%
• EPS Growth: 77.93%
• Country: CA
• Employees: 29
• Sector: Industrials
• Sector Strength: 90
• Industry: Aerospace & Defense
• EPS (TTM): -129.30
• Shares Outstanding: 667,707
• 10 Day Avg. Volume: 1,332
• 30 Day Avg. Volume: 986
• PEG Ratio: <0.01
• Price to Book (P/B): 0.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -0.44
• 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

• Rating: 49 Neutral
• Price Target: C$9.00 ▲(0.78%Upside)

The overall stock score is primarily impacted by significant financial challenges, including operational losses and negative cash flows. Although there are some positive technical signals and a strategic partnership that could enhance market presence, the negative valuation metrics and overall financial instability weigh heavily on the stock's attractiveness.

KWESST Micro Systems Business Overview & Revenue Model

Company Description

KWESST Micro Systems (KWE) is a technology company specializing in the development and provision of advanced defense and security solutions. Operating primarily in the defense and public safety sectors, the company focuses on providing innovative solutions that enhance the operational effectiveness of military and security forces. KWESST's core products and services include tactical awareness and situational control systems, counter-drone technology, and non-lethal systems for various defense applications.

How the Company Makes Money

KWESST Micro Systems makes money through the sale of its advanced defense technology solutions to military and security organizations. The company's revenue model includes direct sales of its proprietary products such as tactical awareness systems and counter-drone technologies to government and defense agencies globally. Additionally, KWESST may engage in licensing agreements or partnerships with other defense contractors to broaden its market reach. Significant factors contributing to its earnings include government defense budgets, strategic contracts, and collaborations with technology partners to integrate its solutions into larger defense systems.

KWESST Micro Systems Financial Statement Overview

Summary

KWESST Micro Systems faces significant financial challenges with consistent operational losses and negative cash flows. While revenue shows some growth, profitability remains elusive, and liquidity is heavily dependent on financing activities. The company needs to enhance its cost management and operational efficiency to achieve financial stability.

Income Statement

KWESST Micro Systems shows a volatile revenue trajectory with a moderate increase from 2023 to TTM 2024, yet overall revenue growth is inconsistent. Gross profit margin improved in TTM 2024 but remains low, reflecting cost control challenges. The net profit margin is negative, indicating persistent losses, while EBIT and EBITDA margins are also negative, highlighting operational inefficiencies.

Balance Sheet

The company maintains a moderate equity position with an improving equity ratio from the previous year. The debt-to-equity ratio is low, suggesting manageable debt levels. However, negative net income results in a negative ROE, indicating poor returns to shareholders. Overall, the balance sheet reflects a need for improved profitability and financial stability.

Cash Flow

Operating cash flow remains negative, indicating cash outflows from operations. Free cash flow is also negative but shows a slight improvement in TTM 2024 compared to prior periods. The operating cash flow to net income ratio suggests that the company struggles to convert earnings into cash. The cash flow from financing activities reflects reliance on external funding.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
2.26M	1.50M	1.23M	721.52K	1.28M	861.92K
	Gross Profit
625.17K	486.50K	-191.38K	184.78K	476.92K	511.41K
	EBIT
-10.21M	-9.80M	-12.10M	-10.09M	-9.20M	-1.93M
	EBITDA
-8.97M	-5.91M	-7.63M	-9.73M	-9.06M	-3.34M
	Net Income Common Stockholders
-10.50M	-7.44M	-9.31M	-10.52M	-9.32M	-3.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.85M	256.83K	5.41M	170.54K	2.69M	3.07M
	Total Assets
8.07M	5.62M	11.76M	7.32M	8.72M	5.31M
	Total Debt
268.25K	302.22K	429.52K	2.55M	361.16K	594.14K
	Net Debt
-2.59M	45.40K	-4.98M	2.38M	-2.33M	-2.48M
	Total Liabilities
3.06M	4.25M	7.82M	8.33M	2.59M	1.43M
	Stockholders Equity
5.01M	1.37M	3.94M	-1.00M	6.12M	3.88M
Cash Flow		Free Cash Flow
-9.57M	-9.17M	-15.38M	-5.62M	-7.30M	-2.06M
	Operating Cash Flow
-9.45M	-9.06M	-14.08M	-4.26M	-6.26M	-1.79M
	Investing Cash Flow
-116.94K	-111.15K	-1.44M	-1.11M	-1.07M	-390.97K
	Financing Cash Flow
9.95M	4.02M	20.76M	2.85M	6.94M	5.23M

KWESST Micro Systems Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.93
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KWE, the sentiment is Neutral. The current price of 8.93 is above the 20-day moving average (MA) of 7.66, above the 50-day MA of 7.20, and below the 200-day MA of 20.48, indicating a neutral trend. The MACD of 0.28 indicates Negative momentum. The RSI at 64.31 is Neutral, neither overbought nor oversold. The STOCH value of 84.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:KWE.

KWESST Micro Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MDA	80 Outperform	C$3.61B	35.42	8.54%	―	49.98%	108.76%
MAL	78 Outperform	C$1.02B	25.57	5.12%	0.55%	8.59%	242.80%
FTG	75 Outperform	C$283.20M	20.78	17.82%	―	15.25%	48.96%
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%
DPRO	53 Neutral	$18.37M	―	-978.94%	―	7.90%	57.35%
KWE	49 Neutral	C$5.94M	―	-231.01%	―	121.88%	77.93%
SNA	24 Underperform	C$6.36M	―	174.16%	―	130.45%	6.25%

KWESST Micro Systems Corporate Events

KWESST Announces Share Consolidation to Ensure Nasdaq Compliance

KWESST Micro Systems Inc. announced a share consolidation, converting twenty-one pre-consolidation shares into one post-consolidation share, effective April 23, 2025, on Nasdaq and April 24, 2025, on TSXV. This move aims to maintain compliance with Nasdaq’s minimum bid price requirements. The consolidation will not affect the number of outstanding share purchase warrants, but it will alter the number of shares issuable and their exercise price. The company believes this consolidation is in the best interest of shareholders.

KWESST Implements 1-for-21 Share Consolidation to Meet Nasdaq Requirements

KWESST Micro Systems Inc. announced a 1-for-21 share consolidation to increase the bid price of its shares and maintain compliance with Nasdaq’s listing requirements. The consolidation, effective April 23, 2025, will reduce the number of outstanding shares and adjust the exercise terms of listed warrants, impacting shareholders and warrant holders.

KWESST Shareholders Approve Share Consolidation to Meet Nasdaq Requirements

KWESST Micro Systems Inc. announced the approval of a Consolidation Resolution by its shareholders, allowing the company to consolidate its common shares to comply with Nasdaq’s minimum bid price requirement. This move is expected to help maintain the company’s listing status and ensure regulatory compliance, with the board set to finalize the share ratio and timing for implementation.

KWESST Expands U.S. Manufacturing with Nordon Partnership

KWESST Micro Systems Inc. has announced a strategic partnership with U.S.-based Nordon Inc. to manufacture its ARWEN™ products in the United States. This move aims to enhance product availability, streamline logistics, and support U.S. law enforcement with American-made products, while also driving local employment and economic growth. The partnership is expected to reduce trade barriers and tariffs, strengthen KWESST’s North American supply chain, and expand its footprint in the U.S. market.

KWESST Seeks Shareholder Approval for Share Consolidation to Maintain Nasdaq Listing

KWESST Micro Systems Inc. has announced a special shareholder meeting on March 31, 2025, to seek approval for a proposed share consolidation. This move is aimed at ensuring compliance with Nasdaq’s Minimum Bid Price Requirement, following a notification from Nasdaq regarding the company’s non-compliance due to its share price falling below $1.00. The consolidation, if approved, would allow KWESST to maintain its Nasdaq listing, which is crucial for the company’s market presence and shareholder value.