Big SpaceX deal triggers upgrades at superstar stock Filtronic
This company has tripled in value in less than a year, but doing business with Elon Musk’s space business is proving hugely lucrative. City writer Graeme Evans explains.
11th February 2025 13:35
by Graeme Evans from interactive investor
The shares of 20-bagger Filtronic (LSE:FTC) are continuing to fly high after another eye-catching deal involving Elon Musk’s SpaceX yesterday led to a third profit upgrade in two months.
The AIM-listed radio frequency communications business, which is based in County Durham, has risen more than 200% since April’s landmark announcement of a five-year strategic partnership to supply SpaceX’s Starlink satellite internet platform.
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The company’s valuation now tops £230 million, still a far cry from the £1.5 billion of the 2000 dotcom boom but 20 times higher than five years ago when shares were just 5.5p.
Source: TradingView. Past performance is not a guide to future performance.
The journey has caught the eye of interactive investor customers as the shares have regularly featured among the most bought on our platform in recent weeks.
This included yesterday morning after Filtronic announced a significant new agreement with SpaceX valued at $20.9 million (£16.8 million) for work to be fulfilled in both 2025 and 2026.
Chief executive Nat Edington said the contract alongside momentum in strategic markets boosted confidence that Filtronic will beat growth targets for this year and next.
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The company’s other strategically important customers include the European Space Agency, as well as BAE Maritime and Qinetiq for radar systems.
But the most significant is SpaceX after Filtronic extended a relationship that began with initial production orders in early 2023.
Its supply of Cerus solid state power amplifier products at multiple frequency bands demonstrated the strength of its engineering capabilities, having taken the concept to volume production in less than six months.
The low earth orbit (LEO) space market has grown rapidly as the costs associated with the launch and deployment of satellite technology continues to dramatically reduce.
Private corporations such as SpaceX, together with established global aerospace contractors and regional start-up companies, are racing to build constellations of satellites that will accelerate the delivery of internet and “direct to cell” services across the globe.
SpaceX contributed 48% of revenue in the May 2024 financial year, with Filtronic’s three largest customers representing 84% of turnover compared with 73% in 2023.
Mindful of this concentration, Filtronic voiced confidence in the 2024 annual report that this will rebalance over time as the LEO sector develops and it wins business in other markets.
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Revenues grew 56% to £25.4 million in 2024, with analysts at Cavendish now looking for a figure of £50.4 million in 2025 following yesterday’s contract win.
Counterparts at Edison added that the visibility provided by the close working relationship with SpaceX and the conversion of recent design wins in the aerospace and defence market into orders, could provide further support for its 2026 forecasts.
Filtronic, which has over 45 years’ experience in the radio frequency market, has reported “excellent progress” with recruitment as it seeks to scale the engineering team to meet demand and serve the opportunity pipeline.
This has led to a 16% headcount increase reported in this month’s half-year results, including the addition of a design team in Cambridge. Two new production lines have been installed to increase manufacturing capacity to support revenue growth.
The company also disclosed a “healthy” net cash position of £5.1 million, which it said enabled continued investment in growth initiatives.
As part of last year’s partnership Filtronic issued warrants that will enable SpaceX to subscribe for up to a maximum of 10% of shares.
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