Jul. 3 at 1:53 PM
$DFNS $15M MC. Guidance for
$26M in 2026 was printed in Q1 - that was based on what they already had booked for the year. Positech just disclosed
$10M in new orders. There was an additional
$5M of orders in Q2. I suspect we’ll get a new guide soon.
Zacks has a PT of
$1.50. Noble has a PT of
$0.80.
Based on the guide alone with a 5x revenue multiple (which is very conservative all emerging defense tech trades at 15 to 30x guide) my PT is
$1.50. I’m using a low multiple because of the headwinds.
The largest headwind here has been Esousa. They haven’t been a seller this year. That’s clear from the filings. But with them in the deal it’s going to be forever shorted. In addition OS has ramped from 5m to 98m in the last 9 months. Menny was clear he’d dilute to buy though so it was part of the plan.
This has been by far my worst performing pick. However I’ve stayed in because I think it’s very under valued. On the way down I’ve adjusted my PTs based on the dilution and at each stage I’ve believed the stock is under valued, so I’ve strayed.
This is the way I’ve always traded, and it’s worked 90% of the time. DFNS could end up being a 10%. We’ll see.
