Key Highlights
- Filtronic’s stock surged up to 14% following the announcement of a $68.1 million contract from SpaceX.
- The contract covers Cerus E-band gallium nitride amplifiers, with deliveries primarily scheduled for FY2028.
- This marks Filtronic’s biggest SpaceX contract to date, surpassing a previous $62.5 million agreement from 2025.
- Cavendish has maintained its “buy” recommendation with a 290p target price.
- According to Cavendish, more than 90% of Filtronic’s anticipated FY2028 revenue is now secured through confirmed orders.
Shares of Filtronic experienced significant upward momentum on Thursday, surging as much as 14% to reach an intraday peak of 270p. The rally followed the company’s disclosure of a substantial $68.1 million follow-on contract from SpaceX.
The contract covers Filtronic’s Cerus E-band gallium nitride solid-state power amplifier systems. This represents the most substantial individual agreement SpaceX has awarded to the British firm.
The new agreement follows a previously announced $62.5 million contract signed in 2025 for identical technology. The two orders combined demonstrate an expanding partnership between Filtronic and Elon Musk’s aerospace company.
Most deliveries under this new contract are scheduled to occur throughout Filtronic’s fiscal year 2028. Management indicated the agreement aligns with, rather than alters, the company’s existing financial guidance for that period.
Contract Details and Technology
The power amplifiers utilize Filtronic’s gallium nitride (GaN) semiconductor technology. According to the company, GaN delivers superior power density, enhanced efficiency, and better heat management compared to legacy gallium arsenide alternatives.
These components are deployed in terrestrial gateway stations that facilitate SpaceX’s Starlink satellite constellation. Starlink operates thousands of low Earth orbit satellites to provide global broadband internet coverage.
Filtronic specializes in manufacturing advanced radio frequency components for aerospace, defense, and telecommunications infrastructure applications. SpaceX has emerged as a critical customer for the firm over recent years.
Investment firm Cavendish maintained its “buy” recommendation on the stock following the announcement. The firm’s 290p price target remains unchanged from its previous assessment.
Cavendish highlighted that this latest contract secures over 90% of Filtronic’s expected revenues for fiscal 2028. This represents exceptional order book visibility for a company of this scale.
Analyst Projections Remain Unchanged
The brokerage firm maintained its existing financial projections after the contract announcement. Revenue expectations for FY2028 remain at Ā£75 million.
Adjusted EBITDA for that fiscal year is projected at Ā£17 million. Cavendish indicated it anticipates SpaceX will continue expanding its worldwide gateway infrastructure significantly past 2028.
The analyst also identified additional growth opportunities for Filtronic’s GaN technology beyond SpaceX. These include other satellite communications providers and military applications.
Filtronic has delivered consecutive years of revenue growth combined with enhanced profitability. The company has also demonstrated consistent operating cash generation, strengthening its financial position for future investments.
However, the business faces certain challenges. Recent revenue fluctuations, compressed margins, and variable free cash flow highlight the company’s sensitivity to large contract timing.
Year-to-date, Filtronic shares have gained approximately 35%. Daily trading volume averages around 1.4 million shares.
Technical indicators currently suggest a “buy” signal for the stock. Filtronic’s market capitalization stands at roughly Ā£519.1 million based on recent trading levels.
The $68.1 million contract announced Thursday represents Filtronic’s largest SpaceX agreement on record, with Cavendish reaffirming its 290p valuation target.
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