Optex Systems Holdings

OPXS

Aerospace & Defense · Industrials

Price

$12.76

-0.30 (-2.30%)

Market Cap

$88.8M

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−16.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 8.3M (2021) → 6.9M (2025)

Optex Systems Holdings makes optical components and assemblies used in military equipment. Its main products include sighting systems, periscopes, and laser filters built into weapons, armored vehicles, and aircraft. The company sells almost entirely to the U.S. Department of Defense and large defense contractors like BAE Systems and General Dynamics.

Optex earns revenue by fulfilling government contracts and subcontracts, typically on a fixed-price or cost-plus basis. It operates out of a single facility in Richardson, Texas, which keeps its footprint small but also concentrates its risk. With a market cap around $100 million, it is a niche supplier, and its moat comes from specialized manufacturing know-how and long-standing program relationships that are difficult for new competitors to break into quickly. The biggest risk the company faces is customer concentration — a slowdown in defense spending or the loss of a key program could have an outsized impact on revenue.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-10.3% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-26.9% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

20.9%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

5+ years

Quarterly Free Cash Flow

→ Burn rate stable

$4.2B cash & investments at current burn rate

Revenue declining

Optex Systems Holdings's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

35.2%

Modest — 35.2% gross margin

Operating Margin

17.3%

Healthy — 17.3% operating margin

ROCE

0.0%

Weak — 0.0% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+18.2%

Fast-growing sales (18.2% YoY)

EPS YoY

+53.2%

Earnings growing fast (53.2% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

51%

Weak — only 51% of profit becomes cash

FCF Margin

5.4%

Thin free cash flow (5.4%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.06

Conservative — low debt load (0.06)

Interest Cover

100.00x

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

15.6x

Fair value — P/E 15.6

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

-2.0

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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