V2X builds innovative solutions that integrate physical and digital environments by aligning people, actions, and technology. V2X is embedded in all elements of a critical mission’s lifecycle to enhance readiness, optimize resource management, and boost security. The company provides innovation spanning national security, defense, civilian, and international markets. With a global team of approximately 16,000 professionals, V2X enables mission success by injecting AI and machine learning capabilities to meet today’s toughest challenges across all operational domains.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
2Q25 Results. Revenue came in at $1.078 billion, essentially flat with last year’s $1.072 billion and was in-line with our $1.08 billion estimate. Helped by the pull forward of the conclusion of a non-recurring contractual commitment, adjusted EBITDA was $82.4 million, or a 7.6% margin, compared to $72.3 million, or a 6.7% margin, last year. V2X reported adjusted EPS of $1.33 for 2Q25, up from $0.83 in 2Q24.
Moving Up to Franchise Programs. Highlighted by last week’s T-6 services award, V2X’s pipeline is reflecting larger, franchise type programs. These programs typically leverage all of V2X’s mission critical capabilities. Management noted the 3-year qualified pipeline is now approximately $50 billion in size.
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V2X builds innovative solutions that integrate physical and digital environments by aligning people, actions, and technology. V2X is embedded in all elements of a critical mission’s lifecycle to enhance readiness, optimize resource management, and boost security. The company provides innovation spanning national security, defense, civilian, and international markets. With a global team of approximately 16,000 professionals, V2X enables mission success by injecting AI and machine learning capabilities to meet today’s toughest challenges across all operational domains.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
New Award. V2X, Inc. has been awarded a $4.3 billion indefinite-delivery/indefinite-quantity contract by the U.S. Air Force for Contractor Operated and Maintained Supply services in support of the T-6 aircraft. This is one of the largest contracts in V2X history and highlights the Company’s operating capabilities, in our view.
Details. This contract provides support for safe flyable aircraft to meet users’ daily flight schedule and depot requirements consistent with Department of Defense and commercial sector best practices in procuring, producing, and delivering products and services to customers. Work will be performed at a variety of military bases across the continental U.S. and is expected to be completed by July 31, 2034. This contract was a competitive source selection with three offers received.
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Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Follow-on Order. Yesterday, Graham Corporation announced the Company was awarded a follow-on order to produce critical hardware for the MK48 Mod 7 Heavyweight torpedo program. This was a sole sourced award. Graham typically receives an annual order for this program once funding is approved for the current year’s supply.
MK48 Program. The follow-on order is valued at approximately $25.5 million. Graham manufactures and tests the alternators and regulators for the MK48 Mod 7 Heavyweight torpedo through its Barber-Nichols subsidiary. We believe there are two more option years remaining under the current program in which 50-120 MK 48s are produced annually.
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The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Amended Facility. The GEO Group announced amendments to its April 2024 Credit Agreement that provide enhanced flexibility, better terms, and an extended maturity. Along with the additional payments on the outstanding debt, GEO has taken another step closer to being able to return capital to shareholders, in our view.
Details. The Amendment increases GEO’s revolver commitments from $310 million to $450 million and extends the maturity to July 14, 2030. The Amendment further provides that interest will accrue on outstanding revolving credit loans at a rate determined with reference to the Company’s total leverage ratio, which, as of today, reduces the rate by 0.50% from the prior applicable rate. The Amendment also increases GEO’s capacity to make restricted payments over the next five years.
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*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.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the bottom of the report for important disclosures
Big Beautiful Bill. The Senate version of the “One Big Beautiful Bill Act” aligns with or even improves upon the House version when it comes to spending on immigration. While it remains to be seen the exact version that will come out of the reconciliation process and be sent to President Trump for his signature, the proposed versions should prove to be beneficial to both CoreCivic and The GEO Group.
Detention Budget. Both the Senate and House proposals call for $45 billion of funding for detention capacity or an additional $10.6 billion annually through fiscal 2029. This would represent an over 300% increase over the current detention budget. This level of funding could support detention bed capacity in excess of 115,000 beds, up from a current 41,500.
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Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.” FINRA licenses 7, 24, 63, 87
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The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
A Purchase. The GEO Group is purchasing the currently leased 770-bed Western Region Detention facility for $60 million, or $77,900/bed. GEO is currently leasing the facility at a cost of $5.1 million annually. GEO has had a long-term contract with the U.S. Marshals Service for use of the facility, which generates approximately $57 million of annualized revenue.
A Tax Savings. Expected to close by the end of July, the transaction is expected to be funded as a like kind real estate property exchange with proceeds from the previously announced sale of the GEO-owned Lawton Correctional Facility, which is expected to close on July 25th, resulting in an estimated capital gains cash tax savings of approximately $9.5 million.
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Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Capital Raise. Kratos completed its previously announced offering of Kratos common stock, raising $575 million in gross proceeds, at a public offering price of $38.50 per share, for a total of 14,935,065 shares of common stock, which includes the exercise of the underwriter’s option to purchase additional shares. Net proceeds from the offering were approximately $556 million. Noble Capital participated as a co-manager of the offering.
Use of Proceeds. Kratos expects to use the net proceeds of the offering to (i) fund investments and capital expenditures to scale and successfully execute on large, mission critical National Security priorities related to existing programs, recent program awards and significant high-probability pipeline opportunities; (ii) to finance important customer and program targeted acquisitions; (iii) and for general corporate purposes.
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V2X builds innovative solutions that integrate physical and digital environments by aligning people, actions, and technology. V2X is embedded in all elements of a critical mission’s lifecycle to enhance readiness, optimize resource management, and boost security. The company provides innovation spanning national security, defense, civilian, and international markets. With a global team of approximately 16,000 professionals, V2X enables mission success by injecting AI and machine learning capabilities to meet today’s toughest challenges across all operational domains.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Support Services. According to the daily Department of Defense contract announcements, V2X subsidiary Vectrus Systems has been awarded an $118 million cost-plus-fixed-fee undefinitized contract for base support services in support of the Iraq F-16 program. This is another in a long line of recent wins for V2X, demonstrating the V2X value proposition and confirming the significant traction on near-term Foreign Military and International opportunities previously highlighted by management.
Details. The contract provides for base operating support, base life support, and security services. Work will be performed at Martyr BG Ali Flaih Air Base, Iraq, and is expected to be completed by Nov. 30, 2026. This contract involves Foreign Military Sales (FMS) to Iraq. This contract was a sole source acquisition. FMS funds in the amount of $57.8 million are being obligated at the time of award.
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The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
USMS Contract. The GEO Group, through its GEO Transport subsidiary, has entered into a new 5-year contract, including option periods, with the U.S. Marshals Service (USMS) for the provision of secure transportation and contract detention officer services across three service regions covering 26 federal judicial districts and spanning 14 states. The new contract highlights the Company’s diversified service platform, in our view, which provides the Company with numerous growth avenues.
Impact. The new contract is expected to generate up to approximately $147 million over the five-year period, or up to approximately $29 million in annualized revenues per full-year of operations, with margins consistent with GEO’s Managed-Only services contracts, which average approximately 15%.
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*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.
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
New Award. Kratos was awarded a $25 million task order under the Command and Control System-Consolidated Sustainment and Resiliency contract with the U.S. Space Force Space Systems Command to support ground system capabilities for Evolved Strategic Satellite Communications (ESS). The ESS system will provide the survivable and endurable satellite communications capability for the Nuclear Command, Control, and Communications mission in all operational environments.
Details. The task order has a 34-month period of performance, which began on March 14th and will conclude on November 30, 2027. This was accomplished under the C-SAR single-award indefinite delivery/indefinite quantity (IDIQ) contract awarded to Kratos on November 15, 2023. The C-SAR IDIQ contract has a maximum value of $579 million to cover task/delivery orders to support operations, sustainment, enhancements, and constellation capacity.
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*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.
Key Points: – Small-cap defense companies operate in specialized sectors with higher agility and acquisition potential compared to mega-cap contractors – Cybersecurity, drone systems, and advanced materials offer the strongest growth opportunities in current geopolitical climate – Market volatility creates entry opportunities before institutional recognition drives valuations higher
While major defense contractors like Lockheed Martin and Northrop Grumman capture headlines during geopolitical tensions, astute small-cap investors should turn their attention to the lesser-known defense players positioned to benefit from increased military spending and technological innovation. Small-cap defense companies often operate in specialized niches that make them indispensable to larger prime contractors and government agencies, and unlike their mega-cap counterparts, these firms can pivot quickly to emerging threats and technologies, making them attractive acquisition targets or compelling long-term growth stories.
The current geopolitical climate, highlighted by recent Middle East tensions and ongoing global conflicts, has created a sustained tailwind for defense spending. President Trump’s pledge of a $1 trillion defense budget, while potentially falling short in fiscal 2026, signals a multi-year commitment to military modernization that extends far beyond traditional weapons systems. This environment particularly benefits small-cap companies specializing in cybersecurity and electronic warfare, where firms focusing on cyber defense, electronic countermeasures, and signal intelligence are experiencing unprecedented demand. These companies often possess proprietary technologies that are difficult to replicate and command premium margins, creating substantial competitive advantages.
The drone revolution presents another compelling opportunity, extending beyond consumer applications into military reconnaissance, logistics, and combat operations. Small-cap manufacturers of specialized UAV components, software, and support systems are capturing market share from traditional aerospace giants, while companies developing next-generation materials for armor, stealth applications, and extreme environment operations often fly under the radar while generating substantial returns for early investors.
When evaluating small-cap defense opportunities, successful investors focus on companies with government contract diversification across multiple agencies and international allies to reduce single-customer risk. The most attractive investments typically feature proprietary technology through patents and specialized expertise that create competitive moats justifying premium valuations. Experienced management teams with deep defense industry connections and security clearances consistently accelerate contract wins, while financial discipline demonstrated through strong balance sheets and consistent cash flow generation proves crucial despite the lumpy nature of contract timing.
Small-cap defense investing requires careful risk assessment, as government budget cycles, security clearance requirements, and regulatory compliance create unique challenges. However, companies that successfully navigate these hurdles often enjoy sustained competitive advantages and multi-year revenue visibility that reward patient investors. The current environment of elevated geopolitical tensions, combined with technological disruption in warfare, creates an ideal backdrop for small-cap defense investments. While large-cap names grab immediate attention during crisis periods, the real long-term value creation often occurs in the innovative small companies that power the next generation of military capabilities. Smart investors should use market volatility as an opportunity to build positions in quality small-cap defense names before institutional recognition drives valuations higher.
CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Acquisition. CoreCivic is expanding its Safety Segment with the proposed acquisition of The Farmville Detention Center in Farmville, Virginia, about 60 miles west of Richmond. Constructed in 2010, Farmville is a 736-bed facility that provides transportation, care, and civil detention services to adult male noncitizens through an Intergovernmental Service Agreement between Prince Edward County, Virginia, and U.S. Immigration & Customs Enforcement (“ICE”), which expires in March 2029.
Details. CoreCivic is paying $67 million for Farmville, or about $91,000 per bed. The transaction is expected to be funded with cash on hand and borrowings under the Company’s revolving credit facility. The acquisition is expected to close effective July 1st and will add approximately $40 million of incremental revenue on an annual basis. Using the Safety segment’s average 2024 operating margin, Farmville could add nearly $10 million of segment operating income on an annual basis.
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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.
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Favorable Adelanto Outcome. The GEO Group received some more good news yesterday with the U.S. District Court, Central District of California, approving a settlement that allows for immediate full intake at GEO’s 1,940-bed Adelanto ICE Processing Center in California. Recall, previous court rulings had limited the use of Adelanto based on the then prevailing COVID-19 conditions.
Another Uplift. Under a January 20025 ruling, the Court had allowed the facility to increase its population cap to 475 detainees. At full occupancy and under the current contract, GEO would see an uplift in revenue of some $31 million, with margins consistent with other Company-owned Secure Service facilities. Adding in Monday’s D. Ray James announcement, GEO could be looking at $100 million of additional revenue and approximately $26 million of net operating income on an annual basis.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
