V2X (VVX) AI Stock Analysis

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V2X

(NYSE:VVX)

70Outperform

V2X shows a strong financial position with robust revenue growth and improved balance sheet metrics, significantly strengthened by its cash flow generation capabilities. The stock's technical analysis presents mixed signals, with recent price weakness contrasted by neutral momentum indicators. The valuation appears high, reducing attractiveness from a value perspective. Positive sentiment from the earnings call, featuring record contract wins and strategic growth initiatives, supports a favorable outlook despite potential challenges from defense budget cuts.

Positive Factors

Contract Wins

V2X was awarded a $100mn contract by the US Navy to support the Aegis Ashore missile defense facilities in Poland.

Financial Performance

V2X reported adjusted EPS well above expectations due to record topline performance, improved operations, and lower interest expenses.

Military Support

V2X is seen as a key beneficiary of increasingly complex full lifecycle military support, with enhanced readiness being a focus area for the DoD.

Negative Factors

EBITDA Margins

The 2025 outlook suggests topline growth at the midpoint but lower EBITDA margins, indicating some caution in future profitability.

Pricing Pressure

Pricing pressure on logistics-related Operations and Maintenance accounts is anticipated, which is seen as a negative for V2X.

Profitability Risks

Potential downside risk to profitability is seen as V2X may need to take on the cost of implementing digitalization efforts to remain competitive.

V2X (VVX) vs. S&P 500 (SPY)

Market Cap

$1.53B

Dividend YieldN/A

Average Volume (3M)296.39K

Price to Earnings (P/E)45.7

Beta (1Y)1.00

Revenue Growth9.06%

EPS GrowthN/A

CountryUS

Employees16,100

SectorIndustrials

Sector Strength70

IndustryAerospace & Defense

Share Statistics

EPS (TTM)1.09

Shares Outstanding31,588,493

10 Day Avg. Volume224,994

30 Day Avg. Volume296,395

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.36

Price to Cash Flow (P/CF)1.70

P/FCF Ratio1.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$66.43

Price Target Upside33.15% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

V2X Business Overview & Revenue Model

Company DescriptionV2X, Inc. is based in Colorado Springs, Colorado.

How the Company Makes MoneyV2X generates revenue primarily through the sale of its communication systems and software to automotive manufacturers, infrastructure developers, and government agencies. The company also earns income from licensing its proprietary technology and software solutions to third-party developers and partners. Additionally, V2X may engage in strategic partnerships and collaborations with other technology firms and industries to expand its market reach and develop integrated solutions, which can also contribute to its revenue streams.

V2X Financial Statement Overview

Summary

V2X demonstrates strong revenue growth and improved profitability in the last year, supported by a healthier balance sheet with reduced leverage. The company's robust cash flow generation further strengthens its financial position. However, profitability margins could be improved further. The overall financial health is strong, with significant improvements in key areas.

Income Statement

Positive

V2X shows a positive revenue growth rate from $3.96B to $4.32B (9.06% annual growth). The gross profit margin improved slightly from 8.45% to 7.93%, while the net profit margin turned positive from -0.57% to 0.80%. EBIT margin increased from 3.14% to 3.68%. However, the EBITDA margin decreased from 5.98% to 3.68%. These figures reflect a strong revenue growth but reveal some pressure on profitability margins.

Balance Sheet

Positive

The company's debt-to-equity ratio significantly improved from 1.18 to 0.05, indicating a stronger equity position relative to debt. Return on Equity (ROE) improved from -2.28% to 3.38%, suggesting better utilization of equity. The equity ratio slightly increased from 32.14% to 31.78%. The improvement in leverage and ROE showcases financial stability, though the equity ratio still indicates moderate leverage.

Cash Flow

Positive

Free cash flow grew from $162.95M to $254.24M (55.96% growth), reflecting strong cash generation. The operating cash flow to net income ratio improved significantly, highlighting better cash conversion efficiency from operations. The free cash flow to net income ratio remains robust, supporting the company's ability to generate cash relative to earnings. Overall, cash flow metrics indicate a healthy cash position with strong growth.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.32B	3.96B	2.89B	1.78B	1.40B
	Gross Profit
342.96M	334.86M	295.01M	160.42M	124.15M
	EBIT
159.20M	124.42M	55.77M	62.02M	43.48M
	EBITDA
262.88M	237.25M	118.05M	62.02M	43.48M
	Net Income Common Stockholders
34.68M	-22.57M	-14.33M	45.73M	36.95M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
268.32M	72.65M	116.07M	38.51M	66.95M
	Total Assets
3.23B	3.08B	3.23B	889.46M	843.81M
	Total Debt
53.81M	1.16B	1.33B	151.16M	197.57M
	Net Debt
-214.51M	1.09B	1.22B	112.65M	130.62M
	Total Liabilities
2.20B	2.09B	2.24B	539.37M	538.87M
	Stockholders Equity
1.03B	990.80M	997.08M	350.09M	304.94M
Cash Flow		Free Cash Flow
254.24M	162.95M	81.07M	51.56M	59.58M
	Operating Cash Flow
254.24M	187.97M	93.50M	61.34M	64.08M
	Investing Cash Flow
-28.65M	-22.65M	175.96M	-12.64M	-138.03M
	Financing Cash Flow
-24.50M	-211.02M	-193.24M	-75.58M	105.77M

V2X Technical Analysis

Technical Analysis Sentiment

Positive

Last Price49.89

Price Trends

50DMA

48.24

Positive

100DMA

51.13

Negative

200DMA

52.88

Negative

Market Momentum

MACD

0.48

Positive

RSI

48.13

Neutral

STOCH

23.92

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VVX, the sentiment is Positive. The current price of 49.89 is above the 20-day moving average (MA) of 49.39, above the 50-day MA of 48.24, and below the 200-day MA of 52.88, indicating a neutral trend. The MACD of 0.48 indicates Positive momentum. The RSI at 48.13 is Neutral, neither overbought nor oversold. The STOCH value of 23.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VVX.

V2X Risk Analysis

V2X disclosed 51 risk factors in its most recent earnings report. V2X 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

V2X Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDRE	74 Outperform	$1.23B	33.73	14.21%	1.18%	17.62%	-12.37%
VVX	70 Outperform	$1.53B	45.69	3.44%	―	9.06%	―
DCO	64 Neutral	$859.55M	26.32	4.78%	―	3.90%	81.41%
Sector *	62 Neutral	$7.50B	12.89	3.19%	3.38%	3.64%	-14.27%
AIR	57 Neutral	$1.96B	246.75	-1.08%	―	21.07%	-120.95%
TGI	54 Neutral	$1.90B	273.23	46.74%	―	-8.59%	―
SPR	40 Underperform	$3.89B	―	81.63%	―	4.44%	-202.63%

* Industrials Sector Average

Performance Comparison

VVX

V2X

49.89

4.48

9.87%

AIR

AAR

53.39

-7.27

-11.98%

DCO

Ducommun

55.56

0.18

0.33%

SPR

Spirit AeroSystems

32.81

-0.60

-1.80%

TGI

Triumph Group

24.70

11.04

80.82%

CDRE

Cadre Holdings

30.77

-2.45

-7.38%

V2X Earnings Call Summary

Earnings Call Date: Feb 24, 2025 | % Change Since: 18.64% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance in 2024, with record revenues and contract wins, along with significant debt reduction. The company demonstrated substantial growth in the Indo-Pacific region and secured a strong backlog for future growth. However, there were concerns about the completion of key programs and potential defense budget cuts. Overall, the sentiment is positive, with significant achievements outweighing the challenges.

Highlights

Record Quarterly Revenue and Growth

Fourth-quarter revenue increased by 11% year-over-year to $1.16 billion. Full-year revenue grew by 9% to $4.3 billion, exceeding the top end of guidance.

Indo-Pacific Region Growth

The Indo-Pacific region saw a 27% increase in revenue, highlighting significant growth and alignment with national security priorities.

Debt Reduction and Cash Generation

Net debt improved by $210 million year-over-year, achieving a net leverage ratio of 2.6 times, providing significant flexibility for 2025.

Record Contract Wins

Secured over $5.5 billion in contract wins in 2024, setting a new record for the company and building a strong foundation for future growth.

Strong Backlog

Total backlog at the end of the year was $12.5 billion, representing a 1.2 times book-to-bill ratio in the quarter.

Growth in Warfighter Training Readiness Solutions

The $3.7 billion Warfighter-Training Readiness Solutions program is ramping up, supporting national security readiness.

Lowlights

KC-10 and T1A Program Completion

The completion of these programs, which contributed approximately $80 million to revenue in 2024 with mature margins, presents a headwind for 2025.

Potential Budget Cuts and Uncertainty

Discussion of potential 8% budget cuts in defense spending could impact future contracts and growth, though specifics remain uncertain.

Company Guidance

In the V2X Fourth Quarter 2024 Earnings Conference Call, the company reported notable financial metrics and strategic accomplishments. V2X achieved record quarterly revenue of $1.16 billion, marking an 11% year-over-year increase, and full-year revenue growth of 9% to $4.3 billion, surpassing the top end of their guidance. Adjusted EBITDA for the fourth quarter was $86.2 million, with a full year total of $310 million, showing 5% and 6% growth respectively. The company reported a remarkable improvement in net debt by $210 million year-over-year, resulting in a net leverage ratio of 2.6 times. Additionally, V2X secured contract wins worth over $5.5 billion, contributing to a total backlog of $12.5 billion, which is 1.2 times book-to-bill ratio for the quarter. The company also highlighted the potential for growth in the Indo-Pacific region, with a 27% revenue increase, and emphasized its strategic alignment with national security priorities. Looking forward to 2025, V2X anticipates revenue growth between $4.375 billion and $4.5 billion, with adjusted EBITDA projected at $305 million to $320 million.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.