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Velo3D $VELO turned its first positive gross margin in Q1 and is sitting on $50M+ of US defense additive-manufacturing awards

I've been digging into Velo3D and I think the market is still pricing it like a 3D-printing momentum stock when the business underneath is rapidly turning.

Background: Velo3D makes metal additive manufacturing systems, the Sapphire line, that print parts too complex to machine conventionally. Rocket engines, turbine and jet components, defense hardware. The company nearly died two years ago in the 3D printing meme stock rush (see: Desktop Metals for another example), got pushed to OTC, ran a reverse split, and bumped right up against full near-bankruptcy.

But its customer base changed, and the overall "reindustrialization" vibes/headwinds are forcing the turnaround. Over the past year Velo3D has rebuilt itself around defense with signed, multi-year work: a $32.6 million Department of War award for Project FORGE and an $11.5 million full-rate production contract with a US defense prime, on top of an Army ground-vehicle qualification. The Sapphire printers are assembled in the US, which is the whole game when your buyers are programs that legally cannot source parts offshore. SpaceX is a customer too.

In its first quarter, revenue rose 48% year over year to $13.8 million, gross margin flipped positive to 17.2% after running deeply negative the quarter before, and it added a $9.8 million five-year IDIQ with the Defense Logistics Agency. Management is guiding to positive EBITDA in the back half of 2026.

For a company that was left for dead, gross margin crossing zero is big, because it means each system sold stops burning cash.

To be fair Velo3D has paid for this comeback by selling stock over and over, including a $50 million raise in April and an open at-the-market shelf on top of it, so anyone holding today keeps getting diluted as it scales, but that may be just a short-term fundraising mechanism to keep the pivot pivoting.

Position: small starter

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u/writeonfinance — 3 days ago
▲ 0 r/stocks

Velo3D $VELO turned its first positive gross margin in Q1 and is sitting on $50M+ of US defense additive-manufacturing awards

I've been digging into Velo3D and I think the market is still pricing it like a 3D-printing momentum stock when the business underneath is rapidly turning.

Background: Velo3D makes metal additive manufacturing systems, the Sapphire line, that print parts too complex to machine conventionally. Rocket engines, turbine and jet components, defense hardware. The company nearly died two years ago in the 3D printing meme stock rush (see: Desktop Metals for another example), got pushed to OTC, ran a reverse split, and bumped right up against full near-bankruptcy.

But its customer base changed, and the overall "reindustrialization" vibes/headwinds are forcing the turnaround. Over the past year Velo3D has rebuilt itself around defense with signed, multi-year work: a $32.6 million Department of War award for Project FORGE and an $11.5 million full-rate production contract with a US defense prime, on top of an Army ground-vehicle qualification. The Sapphire printers are assembled in the US, which is the whole game when your buyers are programs that legally cannot source parts offshore. SpaceX is a customer too.

In its first quarter, revenue rose 48% year over year to $13.8 million, gross margin flipped positive to 17.2% after running deeply negative the quarter before, and it added a $9.8 million five-year IDIQ with the Defense Logistics Agency. Management is guiding to positive EBITDA in the back half of 2026.

For a company that was left for dead, gross margin crossing zero is big, because it means each system sold stops burning cash.

To be fair Velo3D has paid for this comeback by selling stock over and over, including a $50 million raise in April and an open at-the-market shelf on top of it, so anyone holding today keeps getting diluted as it scales, but that may be just a short-term fundraising mechanism to keep the pivot pivoting.

Position: small starter

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u/writeonfinance — 4 days ago
▲ 29 r/stocks+2 crossposts

Rocket Lab's 8B Iridium deal is the third space consolidation move this quarter, could Frequency Electronics $FEIM be next?

Rocket Lab agreed to buy Iridium for $8 billion this week, the major third space consolidation move this quarter after Amazon's Globalstar deal and the SpaceX IPO.

It looks to me like there's a pattern emerging similar to the mid-1990s car industry that birthed Ford, GM, or early-2000s tech that led to today's Google and Amazon: the industry is collapsing toward two or three vertically integrated giants that can fund launch, manufacturing, and constellations all at once, and the smaller players that own a single hard-to-replicate capability end up as acquisition targets instead of standalone businesses.

Frequency Electronics is the least glamorous version of that idea, which is why I think it holds up.

FEIM makes space-qualified atomic clocks and oscillators, the precision timing layer underneath every satellite constellation, GPS program, and position-navigation-and-timing system.

It's a boring, mission-critical niche with real qualification barriers, the kind of supplier a prime would rather buy than build.

Rocket Lab has spent four years running exactly this playbook, most recently pulling the laser-comms maker Mynaric out of a German restructuring for its tech and its engineers, so this isn't hypothetical.

The fundamentals are further along than most space small-caps. FEI closed its fiscal year with backlog over $100 million for the first time and set a target of at least $150 million in revenue by fiscal 2029, which would more than double where it is now.

It's debt-free.

In March it won a contract for atomic clocks on a lunar mission, and rising GPS-jamming concerns are pushing demand for alternative PNT and better clocks across the board. For a roughly $600 million company, that's a credible multi-year growth story tied to how much more timing hardware is heading to orbit.

Of course being an acquisition target is not the same as being a good investment on its own merits. Lockheed Martin bought Terran Orbital last year for $0.25 a share, a 37.5% discount to the prior close and a sliver of where it came public via SPAC. Terran was a satellite maker its own investors had pushed to find a buyer, and the bid that finally came rescued the company, not the shareholders.

FEI is in far better financial shape than Terran ever was, but the stock has already run about 215% in a year and trades near 9x sales, so a lot of the takeout-and-growth optionality already looks priced in. Revenue is lumpy quarter to quarter by management's own admission, and the float is under 10 million shares, so it whips around on single contract headlines.

So really I'm bouncing between whether the qualification-barrier moat is strong enough to justify the multiple here, or if this a good business on its own merits, at a price that already bakes in the acquisition premium? Would also like to know if anyone has dug into how concentrated FEI's customer base is, since that cuts both ways for a takeout case.

Position: Watching, no position (yet)

EDIT: Found a few additional small-cap space stock (potential) tuck-in targets and wrote them up here

u/Then_Marionberry_259 — 7 days ago
▲ 2 r/ValueInvesting+1 crossposts

Sypris Solutions $SYPR: electronics orders up 28% YoY/269% sequentially in Q1, but for a contract manufacturer that's revenue 12-24 months out

Sypris is a micro-cap contract manufacturer that's easy to screen straight past. Full-year 2025 revenue fell to $119.9M from $140.2M, the net loss came in around $6.3M, and the first quarter of 2026 was worse with a $4.1M loss with the electronics segment swinging to an outright gross loss. I.e. on a financials basis it looks destined for delisting.

The reason I think it's a deep-ish value play is that for a contract manufacturer, orders lead revenue by roughly 12 to 24 months, and the orders are inflecting where the income statement isn't.

In Q1, electronics orders rose 28% year over year and 269% sequentially, and energy product orders rose 31% YoY. I.e., none of that is revenue yet but it's building a hefty backlog.

More importantly, that backlog is right at the intersection of where the hard tech sectors are putting a ton of time/attention/energy (and money) right now:

  • Sypris' defense line builds power-supply and EW modules that go inside missiles as a subcontractor to the primes, and in September 2025 it won a follow-on for a classified missile program with production starting in 2026.
  • The space line makes circuit-card assemblies for NASA's Orion, and in January 2026 it won an expanded Orion follow-on with backlog now running through 2027.
  • There's a subsea leg supplying high-reliability assemblies to a major undersea fiber-optic cable provider, riding the data-demand buildout.
  • And the legacy drivetrain business, heavy-truck axle and transmission components, which is what actually cratered in the 2025 truck downturn, just won a new sole-source reshoring award for a truck maker's next-gen transmission, deliveries starting 2027.

The drivetrain biz is especially notable considering recent renewed emphasis on trucking safety initiatives + the tariff shock impacting that segment of Sypris' biz model through no fault of the company itself, meaning it's due for an inflection/reversal.

So you've got four lines riding unrelated secular tailwinds (missile restock, space, data-center-driven subsea and power demand) plus a fifth cyclically bottoming, and the whole thing loses money today because the growth programs are in early-stage production, which front-loads scrap and unabsorbed overhead, while the truck business is still depressed.

The concern is that this could just be a value trap where the orders inflect and the margins never follow, with the balance sheet being a binding constraint: cash is about $4.8M against ongoing losses, so a long ramp probably means dilution. Plus government program work (Orion especially) carries its own funding risk.

The cleanest single tell is Sypris Electronics gross margin, which turned negative on the ramp. If it works back toward positive over the next two or three quarters, the orders-convert-to-profit story is validating a reversal in real-time but if it stays red, the backlog is just funding startup losses against a thin balance sheet, and you're early to nothing.

I can't tell yet which one it is, which is half the reason I'm posting. For anyone who's traded order-lead-revenue names before: how many quarters of improving gross margin would you want to see before treating the backlog as real rather than a financing problem wearing a thesis?

Position: Small starter

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u/writeonfinance — 11 days ago
▲ 16 r/stocks

Lockheed signed a seven-year deal to triple PAC-3 interceptor production, Park Aerospace ($PKE) is a materials sole-source supplier

Even with the US/Iran conflict is (hopefully) sunsetting, rebuilding munitions stockpiles is going to be one of the highest-priority defense tasks churning below the surface. In just a few months, the US mil drew down its interceptor stockpiles faster than it can rebuild them, and the procurement response kicked into overdrive.

In January, Lockheed signed a seven-year framework agreement with the government to lift annual PAC-3 MSE production from about 600 interceptors to 2,000. In April it took the first contract under that framework, a $4.7 billion action to start pulling volume forward. With a multi-year production mandate like that, the cleanest way to play it is usually to own an input the program can't swap out, specifically Park Aerospace ($PKE).

Park is sole-source qualified for the advanced composite ablative materials in the PAC-3's solid rocket motors, and it distributes ArianeGroup's C2B fabric for the same application.

Ablative material is the heat-shielding composite that lets a motor survive its own burn long enough to do the job. It's a certified, program-qualified input, so a prime can't re-source it on a whim, and demand for it scales with the interceptor ramp. Lockheed delivered 620 MSEs in 2025, and the framework calls for roughly tripling that by 2030.

FY26 revenue came in near $73 million, and management is guiding toward roughly $200 million by FY31, backed by a plant expansion meant to double capacity, which will be a huge feather in their cap as American industrial capacity across sectors rebuilds/revitalizes. Park also holds about $63 million in cash and no long-term debt.

A risk is that "sole source" supplier is a customer designation, not necessarily a hard-and-fast moat. The Pentagon is explicitly pushing toward greater competition across primes/neo-primes and suppliers, i.e., the same Pentagon driving PAC-3 demand just put $1 billion into L3Harris's solid-rocket-motor business, explicitly to broaden the base and revive competition after decades of consolidation.

That money went toward motors rather than ablative materials, and Park's management frames more motors as more demand for its product. Still, a buyer writing billion-dollar checks to kill single points of failure is the standing risk to anyone in a sole-source seat.

Edit - a couple more upstream supplier defense small-caps, including $NPK and $CVU, look strong along similar lines to the $PKE thesis. I wrote them up here

u/writeonfinance — 20 days ago
▲ 16 r/Defense_Tech+3 crossposts

DroneShield ($DRSHF) bagged a $19.3M JIATF-401 contract, proving counter-UAS is a fast-moving US gov procurement category

AUS company DroneShield announced earlier this month that the US Department of War's Joint Interagency Task Force 401 awarded it an initial $19.3M contract with up to $5.6M in additional end-user options over five years. The buy covers RF detection hardware, jamming systems, software subscriptions, and services. JIATF-401 is Uncle Sam's standing counter-UAS task force (across agencies, including Dept of War + DHS + FBI + FAA + others), which is the part of this that interests me more than the dollar figure.

Most C-UAS contracts to date have been one-off proof-of-concept buys or supplemental orders tied to specific deployments. A dedicated task force funding a multi-year, multi-component package (hardware plus software subscriptions plus services) is structurally different. It looks more like the procurement shape of an established capability category than the lumpy contract flow that's defined the space since around 2018.

If counter-UAS is genuinely turning into a procurement line item in its own right, DroneShield is one of the cleaner public pure-plays, especially considering its cost-per-shot is far lower than most of the exquisite directed energy solutions + better mobility than the same for smaller unit utility (think squad/platoon vs brigade+ asset) and civilian agency deployment.

Beyond cost/mobility, the product story holds up against most comps. The RfPatrol line does passive RF detection from handheld through fixed-site, the DroneGun family covers jamming, and underneath both is an AI threat library that ingests new drone signatures continuously.

That last piece matters because adversary drone designs evolve faster than traditional procurement update cycles. The software-update model is also what supports recurring revenue rather than one-shot box sales, which is the more important structural read here than any single contract value.

There's a little turbulence / unknowns - ASIC (Australian SEC equivalent) disclosed an investigation into DroneShield in May 2026 around disclosures and share trading. Scope hasn't been detailed publicly, and the company has said it will cooperate, but it's a regulatory overhang that's hard to size and worth pricing into any position.

There's a little bit of cyclicality to C-UAS trends, too, which could mean we're at the beginning of a hype cycle that collapses. Counter-drone has had multiple narrative cycles since 2017 where contracts looked like they were about to inflect and didn't. AeroVironment ($AVAV) is the closest large-cap analog and has had its own multi-year stretches where C-UAS revenue didn't materialize on the expected curve. The JIATF-401 read could be the real turn or could be one more wave that crests below the prior high.

Position: My only C-UAS adjacent holding right now is $AVAV before building a bigger sector position, but I'm trying to get some more research together for comps across the field, especially in small caps - interested in what others may see out there and how $DRSHF compares.

u/writeonfinance — 21 days ago
▲ 2 r/SpaceInvestorsDaily

Spire's OISL constellation as the publicly-traded play on what SpaceX's S-1 calls "solved" mesh comms

Looking at how the SpaceX S-1 frames the long-term space economy, the explicit naming of inter-satellite lasers and mesh connectivity as "solved" capabilities on the path to orbital AI compute (targeted "as early as 2028") matters a lot for how to think about publicly-traded laser-comms exposure. The most direct public small-cap I keep landing on is Spire Global.

On the OISL side, Spire launched its seventh Optical Inter-Satellite Link satellite in Q1 2026, building out the laser-comms layer that any orbital compute architecture would need to move processed inference back to ground without saturating Starlink bandwidth. The revenue line is thin today, but it's the right kind of optionality on a thesis where the broader business doesn't depend on OISL working.

That broader business is a 240+ satellite constellation across RF geolocation (mostly weather data products after spinning off maritime/AIS segments), atmospheric data, and a hyperspectral microwave sounder demonstrator that just delivered first light. Q1 2026 revenue was $15.8M, beating guidance. Full-year 2026 guidance is $75-85M for 50%+ growth, with 76% already under contract. Market cap sits around just shy of $800M, so the sweet spot (or death valley, depending on your outlook) for small-caps.

The piece I find most interesting for near-term prospects: reserved launch capacity through 2028, which becomes more valuable if you take the SpaceX prospectus seriously about launch being a sector bottleneck over the next few years.

The obvious comp pressure is Mynaric, restructured under German bankruptcy in 2025, wiped out shareholders despite Peter Thiel and ARK Invest on the cap table. RKLB picked up the IP and assets.

So clearly being early in OISL is not sufficient on its own. The reason I land on Spire as the more durable bet is the contracted revenue base from the existing constellation businesses. That's the actual margin of safety against the Mynaric outcome, not Spire's OISL roadmap on its own.

The harder question I don't have a clean answer on is how should the public Spire thesis be valued against Telesat Lightspeed (TSAT, larger and a different scale of business) and the private players (Mynaric peers and successor companies)? If anyone has done the comp work on TSAT specifically, would appreciate the read.

Also curious how this sub is thinking about BKSY's compute-platform thesis versus Spire's mesh thesis as the cleaner SpaceX-adjacent small-cap exposure. They're not direct competitors but they're playing different bets on what the prospectus actually means.

Position: None yet (in either SPIR or BKSY), waiting for post-SPCX IPO heat to cool across space stocks but may look into opening a small position in July

I also think that $BKSY and $KULR are interesting SPCX-adjacent small-cap space stocks and wrote them up here if anyone is interested

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u/writeonfinance — 24 days ago
▲ 1 r/SmallCapStocks

Spire Global ($SPIR): small-cap with 76% of 2026 revenue contracted and reserved launch capacity through 2028

Spent the past few days diving into space stocks / down and upstream SPCX oppos and went deep on going through Spire Global (SPIR) and wanted to put the thesis up here for pushback. Just under $800M market cap, so right in that small-cap sweet spot (or valley of death), but the business profile reads more disciplined than most names this size even though long-term goals are super aspirational/risky.

Headline numbers: Q1 2026 revenue of $15.8M beat guidance and led to full-year 2026 guidance push upward to $75-85M / 50%+ growth. 76% of 2026 revenue is already under contract, which is the kind of visibility small-caps usually don't have at this growth rate. They also have reserved launch capacity through 2028 which helps manage their backlog and keep costs predictable.

The business is a 240+ satellite constellation across RF geolocation, atmospheric data, and a hyperspectral microwave sounder demonstrator that just delivered first light in Q1. Sitting on top of that is the Optical Inter-Satellite Link (OISL) build-out (i.e. space lasers). Spire launched its seventh OISL satellite earlier in Q1 2026. The SpaceX S-1 that dropped last week explicitly named inter-satellite lasers and mesh connectivity as capabilities they have "solved" on the path to orbital AI compute (targeted "as early as 2028"), so SPIR seems right at the fore of space-based data center growth (though risk of Elon & co inflating near-term progress/potentiality a la FSD).

The best counter-evidence I could find: Mynaric, a prior public laser-comms small-cap, restructured under German bankruptcy in 2025 and wiped out shareholders despite Peter Thiel and ARK Invest on the cap table (RKLB picked up the IP and assets out of the restructuring but shareholders and I believe debt holders got cooked). Being early in optical inter-satellite comms is not enough on its own. The differentiator I land on for Spire is the broader contracted revenue base from the existing constellation businesses.

Watching for: more OISL revenue conversion from backlog in Q2/Q3 reporting, any contract announcements specifically tied to orbital data center comms, and the broader small-cap space group reaction once SPCX actually starts trading.

Anyone else in SPIR here? Particularly interested if anyone has thoughts on the competitive set, given Mynaric was the public comp and they're gone, so it's mostly private players and mid-caps (TSAT) to look at.

Position: None, may open later in the month when post-SPCX space stock heat dies down.

I also think that $BKSY and $KULR are interesting small-cap SPCX plays and wrote them up here if anyone is interested

u/writeonfinance — 24 days ago
▲ 2 r/SpaceXBets+3 crossposts

SpaceX's S-1 is calling inter-satellite lasers as a "solved" capability, Spire Global looks like the most direct small-cap exposure

SPCX's drop is consuming most of the coverage this week, but there is way more meat in Elon's actual filing prospectus. SpaceX explicitly names orbital AI compute (targeted "as early as 2028") and a lunar economy buildout as the next phase, and lists inter-satellite lasers, mesh connectivity, and satellite mass production at scale as capabilities the company has already solved.

If you take that seriously, the question is which public small-caps have direct exposure to those capability buckets. The one that keeps coming up for me on the lasers/mesh side is Spire Global ($SPIR / ~$714M market cap).

Spire launched its seventh Optical Inter-Satellite Link satellite in Q1 2026. That's the laser-comms layer orbital data centers would need to move processed inference back to ground without saturating Starlink. Thin revenue line today, but it maps directly onto the capability SpaceX's prospectus argues is foundational to its compute roadmap.

The rest of the business gives the thesis downside support rather than relying on OISL working. Spire operates a 240+ satellite constellation across RF geolocation, atmospheric data, and a hyperspectral microwave sounder demonstrator that just delivered first light. Q1 2026 revenue was $15.8M, beating guidance. Full-year 2026 guidance is $75-85M for 50%+ growth. 76% of 2026 revenue is already under contract. They also have reserved launch capacity through 2028, which matters if SpaceX's own prospectus is advocating for a launch-constraint thesis being a mid-term bottleneck.

I did dig up some counterevidence: Mynaric, a prior public laser-comms small-cap, restructured under German bankruptcy in 2025 and wiped out shareholders despite Peter Thiel and ARK Invest on the cap table. Being early in inter-satellite optical comms is not sufficient on its own. You also have to stay alive long enough to monetize. Spire's broader contracted revenue base is what differentiates it for me, but Mynaric's collapse is the right base rate to keep in mind.

Curious if anyone here has been in the inter-satellite-laser space and has takes on competitors worth looking at. Mynaric was the obvious public comparable and they're gone, which leaves SPIR and a lot of private players so tough to build comps.

Position: None, watching post-SPCX action first

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u/writeonfinance — 25 days ago