Category: Aerospace and Defense

Wednesday, June 17, 2020

Kratos Defense & Security (KTOS)

Acquisition Expands Satellite Antenna Capability

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

ASC Signal Acquisition. Yesterday, Kratos announced the acquisition of ASC Signal for $35 million. ASC is a manufacturer of high-performance, highly engineered antenna systems for satellite communications, radar, electronic warfare, and high-frequency applications. While details of the business size were not provided, we would note the business was running at a $50 million revenue rate back in 2016. Notably, the Department of Justice required the sale of ASC in order for Communications and Power Industries to proceed with its proposed acquisition of General Dynamics SATCOM Technologies, Inc.


Synergies and Expansion. The acquisition brings numerous synergies with Kratos’ existing core space business and expands Kratos’ industry-broadest offering of advanced products across the ground station segment. ASC antennas are used in a variety of mission-critical space applications, ranging from Telemetry, Tracking & Command to satellite communications and earth sensing and observation for military and…








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This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, June 17, 2020

Kratos Defense & Security (KTOS)

Acquisition Expands Satellite Antenna Capability

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

ASC Signal Acquisition. Yesterday, Kratos announced the acquisition of ASC Signal for $35 million. ASC is a manufacturer of high-performance, highly engineered antenna systems for satellite communications, radar, electronic warfare, and high-frequency applications. While details of the business size were not provided, we would note the business was running at a $50 million revenue rate back in 2016. Notably, the Department of Justice required the sale of ASC in order for Communications and Power Industries to proceed with its proposed acquisition of General Dynamics SATCOM Technologies, Inc.


Synergies and Expansion. The acquisition brings numerous synergies with Kratos’ existing core space business and expands Kratos’ industry-broadest offering of advanced products across the ground station segment. ASC antennas are used in a variety of mission-critical space applications, ranging from Telemetry, Tracking & Command to satellite communications and earth sensing and observation for military and…








Click to get the full report.

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, June 10, 2020

DLH Holdings Corp. (DLHC)

Raising Price Target to $11.00 from $8.25

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Raising PT to $11.00. We are reiterating our Outperform rating and raising our twelve month price target to $11.00 per share, up from our previous $8.25 price target. At our new price target, DLHC shares would trade at 8.7x our fiscal 2020 adjusted EBITDA estimate and 0.9x our fiscal 2020 revenue estimate, still significant discounts to its peer group.

Stock Outperformance YTD. After years of trading in the $4-$6 range, DLHC shares broke out this year, up 112% YTD, compared to a 7.8% decline YTD in the Russell 2000. In our view, the outperformance can be attributable to…









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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, June 10, 2020

DLH Holdings Corp. (DLHC)

Raising Price Target to $11.00 from $8.25

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Raising PT to $11.00. We are reiterating our Outperform rating and raising our twelve month price target to $11.00 per share, up from our previous $8.25 price target. At our new price target, DLHC shares would trade at 8.7x our fiscal 2020 adjusted EBITDA estimate and 0.9x our fiscal 2020 revenue estimate, still significant discounts to its peer group.

Stock Outperformance YTD. After years of trading in the $4-$6 range, DLHC shares broke out this year, up 112% YTD, compared to a 7.8% decline YTD in the Russell 2000. In our view, the outperformance can be attributable to…









Click to get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, May 13, 2020

Vectrus (VEC)

Strong 1Q20 Results

Vectrus Inc is a U.S.-based company that provides services to the U.S. government. It operates as one segment and offer facility and logistics services and information technology and network communications services. The information technology and network communications capabilities consist of communications systems operations and maintenance, management and service support, systems installation and activation, system-of-systems engineering and software development, and mission support for the department of defense. The facility and logistics service include airfield management, ammunition management, civil engineering, communications, emergency services, life support activities, public works, security, transportation operations and others.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q20. Revenue of $351.7 million, up 7.9% y-o-y. Consensus was $337 million and we were at $350 million. EPS was $0.74, up from $0.62 in 2019. Consensus was $0.74 and we were at $0.69. Organic revenue growth was 4% and Advantor added $11.2 million. Management estimated COVID impacted revenue by $2.2 million and EPS by $0.02 in the quarter.


Revenue Up in all Geographies and with all Major Customers. Revenue in Europe grew 15% to $32.3 million, U.S. by 14% to $81.4 million, and 5% in the Middle East to $237.9 million. Revenue from the Army grew 9.2% to $247.6 million. The Air Force was up 8% to $73.3 million, and Navy revenue rose 1.0% to $15.2 million. The Company’s focus on enhancing its portfolio of clients and…









Click to get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, May 13, 2020

Vectrus (VEC)

Strong 1Q20 Results

Vectrus Inc is a U.S.-based company that provides services to the U.S. government. It operates as one segment and offer facility and logistics services and information technology and network communications services. The information technology and network communications capabilities consist of communications systems operations and maintenance, management and service support, systems installation and activation, system-of-systems engineering and software development, and mission support for the department of defense. The facility and logistics service include airfield management, ammunition management, civil engineering, communications, emergency services, life support activities, public works, security, transportation operations and others.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q20. Revenue of $351.7 million, up 7.9% y-o-y. Consensus was $337 million and we were at $350 million. EPS was $0.74, up from $0.62 in 2019. Consensus was $0.74 and we were at $0.69. Organic revenue growth was 4% and Advantor added $11.2 million. Management estimated COVID impacted revenue by $2.2 million and EPS by $0.02 in the quarter.


Revenue Up in all Geographies and with all Major Customers. Revenue in Europe grew 15% to $32.3 million, U.S. by 14% to $81.4 million, and 5% in the Middle East to $237.9 million. Revenue from the Army grew 9.2% to $247.6 million. The Air Force was up 8% to $73.3 million, and Navy revenue rose 1.0% to $15.2 million. The Company’s focus on enhancing its portfolio of clients and…









Click to get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Friday, May 8, 2020

Kratos Defense & Security (KTOS)

A First Quarter Beat, But Lower Expectations for the Second Quarter

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q20 Results. Kratos reported revenue of $168.9 million, above the $164.0 million consensus estimate and our $165.0 million projection. Adjusted EPS totaled $0.09, compared to a consensus and our $0.07 estimate. Adjusted EBITDA for the quarter was $16.3 million. Revenue came in at the high end of guidance, while adjusted EBITDA exceeded the $12-$15 million guidance. range.


Unmanned Continues to Lead the Way. US revenues of $42.0 million rose $7.1 million, or 20.3%, over the first quarter of 2019, driven by new target awards and additional tactical development contracts. Government Systems segment revenue increased $1.4 million to $126.9 million as organic growth in turbines, microwave, rocket systems, and cyber were offset by reductions in training solutions. satellite communications, and…





Click to get the full report.

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Friday, May 8, 2020

Kratos Defense & Security (KTOS)

A First Quarter Beat, But Lower Expectations for the Second Quarter

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q20 Results. Kratos reported revenue of $168.9 million, above the $164.0 million consensus estimate and our $165.0 million projection. Adjusted EPS totaled $0.09, compared to a consensus and our $0.07 estimate. Adjusted EBITDA for the quarter was $16.3 million. Revenue came in at the high end of guidance, while adjusted EBITDA exceeded the $12-$15 million guidance. range.


Unmanned Continues to Lead the Way. US revenues of $42.0 million rose $7.1 million, or 20.3%, over the first quarter of 2019, driven by new target awards and additional tactical development contracts. Government Systems segment revenue increased $1.4 million to $126.9 million as organic growth in turbines, microwave, rocket systems, and cyber were offset by reductions in training solutions. satellite communications, and…





Click to get the full report.

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, March 4, 2020

Vectrus (VEC)

Excellent 2019. Will the Momentum Carry Over into 2020?

Vectrus Inc is a U.S.-based company that provides services to the U.S. government. It operates as one segment and offer facility and logistics services and information technology and network communications services. The information technology and network communications capabilities consist of communications systems operations and maintenance, management and service support, systems installation and activation, system-of-systems engineering and software development, and mission support for the department of defense. The facility and logistics service include airfield management, ammunition management, civil engineering, communications, emergency services, life support activities, public works, security, transportation operations and others.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Strong 4Q19 and FY2019. 4Q19 revenue grew 11% to $365.3 million, adjusted EBITDA rose 29% to $18 million and adjusted diluted EPS was $0.93 compared to $0.73 in 4Q18. Full year revenue was up 8% to $1.38 billion, adjusted EBITDA rose 15% to $61.4 million, and adjusted diluted EPS was $3.21 compared to $3.04 in 2018.


New Business Drove Results. Navy revenue grew 45% in the year, Air Force business jumped 22%, and Vectrus added the Department of State and Japan’s MoD as new clients during the year. Vectrus won some $1.2 billion of new business in 2019. And the opportunity pipeline remains robust at…









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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, March 4, 2020

Vectrus (VEC)

Excellent 2019. Will the Momentum Carry Over into 2020?

Vectrus Inc is a U.S.-based company that provides services to the U.S. government. It operates as one segment and offer facility and logistics services and information technology and network communications services. The information technology and network communications capabilities consist of communications systems operations and maintenance, management and service support, systems installation and activation, system-of-systems engineering and software development, and mission support for the department of defense. The facility and logistics service include airfield management, ammunition management, civil engineering, communications, emergency services, life support activities, public works, security, transportation operations and others.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Strong 4Q19 and FY2019. 4Q19 revenue grew 11% to $365.3 million, adjusted EBITDA rose 29% to $18 million and adjusted diluted EPS was $0.93 compared to $0.73 in 4Q18. Full year revenue was up 8% to $1.38 billion, adjusted EBITDA rose 15% to $61.4 million, and adjusted diluted EPS was $3.21 compared to $3.04 in 2018.


New Business Drove Results. Navy revenue grew 45% in the year, Air Force business jumped 22%, and Vectrus added the Department of State and Japan’s MoD as new clients during the year. Vectrus won some $1.2 billion of new business in 2019. And the opportunity pipeline remains robust at…









Get the full report on Channelchek desktop.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Tuesday, February 25, 2020

Kratos Defense & Security (KTOS)

Underwhelming 4Q; Is the Future Brighter?

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Underwhelming 4Q19. Kratos reported mixed 4Q19 results. Revenue came in at $185.1 million, below the $197 million consensus estimate, while adjusted EPS totaled $0.09, below the consensus $0.10 estimate. Full year revenue of $717.5 million was below the low-end of management’s $720-$740 million guidance, although 2019 adjusted EBITDA of $77.3 million was above the $71-$77 million guided range. Full year adjusted EPS totaled $0.34, up 41.7% from $0.24 in 2018.

Unmanned Still The Star. Unmanned Systems saw 2019 revenue jump 21.4% to $161.4 million. We continue to see positive momentum here, although timing of production awards, and thus significant revenue growth, is uncertain. We continue to believe Kratos has developed a valuable asset in…

Get the full report on Channelchek desktop.

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Tuesday, February 25, 2020

Kratos Defense & Security (KTOS)

Underwhelming 4Q; Is the Future Brighter?

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Underwhelming 4Q19. Kratos reported mixed 4Q19 results. Revenue came in at $185.1 million, below the $197 million consensus estimate, while adjusted EPS totaled $0.09, below the consensus $0.10 estimate. Full year revenue of $717.5 million was below the low-end of management’s $720-$740 million guidance, although 2019 adjusted EBITDA of $77.3 million was above the $71-$77 million guided range. Full year adjusted EPS totaled $0.34, up 41.7% from $0.24 in 2018.

Unmanned Still The Star. Unmanned Systems saw 2019 revenue jump 21.4% to $161.4 million. We continue to see positive momentum here, although timing of production awards, and thus significant revenue growth, is uncertain. We continue to believe Kratos has developed a valuable asset in…

Get the full report on Channelchek desktop.

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Friday, February 7, 2020

Vectrus (VEC)

U.S. Army Determines LOGCAP V Bid Prices Reasonable, Will Proceed with Original Awardees

Vectrus Inc is a U.S.-based company that provides services to the U.S. government. It operates as one segment and offer facility and logistics services and information technology and network communications services. The information technology and network communications capabilities consist of communications systems operations and maintenance, management and service support, systems installation and activation, system-of-systems engineering and software development, and mission support for the department of defense. The facility and logistics service include airfield management, ammunition management, civil engineering, communications, emergency services, life support activities, public works, security, transportation operations and others.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

U.S. Army Determination. On February 5th, the U.S. Army filed a status report with the U.S. Court of Federal Claims regarding its reexamination of bid prices under the LOGCAP V award. The Army determined the bid prices of the winning awardees are reasonable. Hopefully, this will allow Vectrus to move forward on its awards under LOGCAP V.

Proceeding with Original Awardees. According to the status report, the Army “intends to proceed with the previously awarded LOGCAP V contracts on or after March 2nd.” Recall, in April 2019, Vectrus was awarded LOGCAP V contracts for the CENTCOM and…

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision.