Why is a buy for CPS Technologies now?
1) Financial Performance Has Improved
Return to Profitability
CPS Technologies reported record revenue and profitability in early 2025, with $7.5 M in Q1 revenue and a return to operating profit after years of losses — even without revenue from a major past defense contract. �
Q2 2025 revenue hit $8.1 M, a significant year-over-year increase, and the company posted operating profit again.
Q3 2025 delivered $8.8 M in revenue, more than doubling prior-year figures and marking three consecutive quarters of record sales.
This trend shows both top-line growth and improved margins, indicating CPS is moving into a more stable and scalable phase rather than just one-off spikes.
2) Expanded Contract and Product Base
Large Follow-On Contract
CPS secured a $15.5 M follow-on contract with a major multinational semiconductor manufacturer, which began in late 2025 and runs about a year — a meaningful revenue driver going into 2026.
Multiple Government Research Awards
The company has expanded its roster of SBIR and STTR government research contracts, including:
Phase I and Phase II Army and Department of Energy contracts
Projects in advanced materials like controlled fragmentation tungsten warheads and fiber-reinforced aluminum composites
This supports a diversified and innovation-driven pipeline — crucial for long-term growth.
First Commercial Sales of New Products
CPS completed its first commercial sale of radiation shielding materials, a new product line with applications in defense, aerospace, and nuclear markets.
These developments show CPS is no longer reliant on one big contract but building multiple revenue streams.
3) Improving Operations and Capacity
To support demand and growth, CPS has:
Added a third production shift to increase output and reduce lead times.
Raised capital via a public offering (~$9.5 M) to expand production capabilities and invest in operations — a positive sign of investor support and runway.
This gives the company operational flexibility to support larger contracts and growth initiatives.
4) Outlook: Growth in 2026 and Beyond
2025 Expected as Best Year Yet
Management has repeatedly stated that 2025 is on track to be CPS’s strongest revenue year in its history, driven by record sales and an expanding product portfolio.
Growth Drivers Into 2026–2027
Key elements that could support continued growth include:
Continued demand for advanced metal matrix composite materials in aerospace, defense, automotive, and power electronics markets.
Expansion of radiation shielding and AlMax™ offerings into new commercial and government markets.
Further wins of SBIR/STTR development contracts, which often lead to larger Phase II and production contracts.
Broad diversification that reduces dependence on a single major customer contract.
This combination suggests CPS has multiple levers for growth, rather than a narrow product focus.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
