Is the growth stock still worth considering after these high-octane gains? Let’s discuss.

Two new deals announced

From an operational perspective, Filtronic – which specialises in advanced wireless communications solutions – continues to go from strength to strength. Recently, it announced a number of new deals.

For example, on 26 March, it announced an $8m contract with a US company to design, develop, produce, and qualify amplifiers for satellite communications. Shortly after this, on 1 April, it announced that it had been selected by a major European defence prime for the initial phase of a new technology programme and that it had won an initial contract for wide-bandwidth solutions worth £0.4m.

These deals are no doubt encouraging. They signal that the company’s technology is in demand.

The stock is expensive now

Looking at the company from an investment perspective, however, I have a few concerns today. I am no longer as bullish as I was back in January.

One issue for me is that the share price has risen a long way in a very short space of time amid excitement around space stocks (the SpaceX IPO has fuelled this). And as a result, the company’s valuation is now extremely high.

At present, City analysts forecast earnings per share of 3.69p for the year starting 1 June 2026. So, at today’s share price of 404p, we have a price-to-earnings (P/E) ratio of 109.

I was comfortable with a P/E ratio near 50 back in January. But near 110, the risk levels here are very high.

I’ll point out that analysts at Berenberg recently raised their target price to 360p (not far below the current price) so they appear to see the current valuation as justified. Personally though, I see it as overstretched.

Insiders are selling shares

Another issue for me is that directors have recently been selling stock. In April, three different directors offloaded shares.

Now, insiders sell shares for many reasons (eg, buying a house, paying tax, paying for school/university fees). However, when multiple insiders are selling stock simultaneously it can be a bit of a red flag.

It’s worth noting that among those selling were the CFO and the chair. These are top-level insiders and they are likely to have the most information on the company.

Still worth it?

Given the high valuation and the insider selling, I don’t see the stock as one to consider today. To my mind, the risk/reward set-up is not attractive at current levels.

If the stock was to experience a material pullback (to say 240p to 270p), however, it could be worth considering. Because there’s no doubt that the company has long-term growth potential.

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To put that number into perspective, a £5,000 investment made in early May 2001 would now be worth roughly £164,000!

Yet I think this stock could head even higher in the coming years. Here’s why.

Game-changing partnership

For those wondering what Filtronic does, it’s a maker of advanced radio frequency (RF) solutions for the aerospace and defence, space, and telecoms infrastructure markets. So that’s various filters, transceivers, amplifier systems, and so on.

The firm is a leader in E-band solid state power amplifiers (SSPAs). As it points out: “Companies like SpaceX have received the approval to use E-band (71-86GHz) frequencies for its Starlink-network, and it’s a sign of where the satellite industry is heading… E-band delivers high-capacity, low-latency connectivity ideal for next-generation satellite networks“.

Filtronic already supplied SpaceX with SSPAs for the ground segment of its Starlink network, which provides high-speed internet via low-earth orbit satellites. But a strategic partnership signed between them in early 2024 immediately sent the stock up 50%.

The game-changing agreement included:

• An initial order of $19.7m (£15.8m) for SSPA modules.
• A commitment to ongoing orders for the next five years.
• SpaceX was issued warrants for up to 10% of Filtronic’s share capital.
• A collaboration to focus on additional frequency bands.

The equity stake gives SpaceX a vested interest in Filtronic’s financial success. As evidenced in August 2025, when a record $62.5m contract for Filtronic’s next-generation GaN E-band product sent the share price surging again.

SpaceX IPO

SpaceX is gearing up for a potentially record-breaking $1.75trn stock market debut this summer. It could net the rocket and satellite giant up to $75bn in cash.

Now, we already know SpaceX will use a decent chunk of this to scale up Starship, its gigantic reusable rocket and spacecraft launch system. It’s designed to deploy massive batches of next-generation Starlink satellites (potentially hundreds at once).

Presumably, if SpaceX uses IPO funds to massively increase the Starlink constellation, and also develop space-based AI data centres, that will require more ground-based infrastructure. And that’s surely fantastic news for Filtronic’s order pipeline. The firm has already moved into a larger headquarters and manufacturing facility to support the anticipated expansion.

Lumpiness

That said, growth’s unlikely to be linear. Revenue for this fiscal year (FY26), ending May, is expected to be broadly the same as FY25, at about £55m. Therefore, earnings can be lumpy, inviting share price volatility.

On top of this, the valuation’s now very high (albeit far cheaper than the mooted SpaceX valuation). Based on the £75m revenue forecast for the 2027/28 year (FY28), the forward price-to-sales ratio is around 8.5.

If sales growth fails to materialise, the stock could end up badly overvalued.

Worth a look?

Looking ahead though, it’s hard not to be bullish on Filtronic’s future growth trajectory, especially when adding in emerging opportunities across the European SpaceTech and defence sectors.

Its new high-powered V-band amplifiers open up further opportunities in medium earth orbit and geostationary for the first time.

Weighing things up, I think the Starlink and defence growth potential make the stock worth considering for the next five years.

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The exciting communications manufacturer had just signed a deal with SpaceX to supply equipment for the firm’s rockets. The stock was surging. The growth story looked compelling. I took the plunge and opened a position. What has happened since? It looks like I made a pretty good decision…

Double up

In the eight months since that article, the Filtronic share price has doubled in value – up 120% at its peak, although it has retreated a touch since then. The market cap has soared to £651m, now larger than a couple of dozen FTSE 250 companies (it may join the index in the near future). A £10,000 stake is now worth £20,175.

All the while, I got a decisive answer to the opening question – yes, yes I should have bought that UK tech stock!

A share price doubling in less than a year is a pretty rare event. So what happened? In short, we can call it the ‘SpaceX effect’.

Filtronic works closely with SpaceX, receiving two massive orders in the last year alone. The American giant also holds something like 10% of the equity in the British firm – a sign that this is a partnership that is here for the long run.

What has been lifting up both companies is the hype around the nascent ‘space industry’ and the upcoming blockbuster IPO. When SpaceX has a public offering later this year, it is expected to be valued at $2trn or thereabouts.

While the 100% gain has been nice to watch rising in my portfolio, I will say that us longtime investors know that there will always be winners and losers. I was not looking to double up as quickly as possible and sell. I’m interested in investing in great companies that can be financially rewarding over decades. And with that in mind, I think Filtronic could still be a good buy today…

Is it a buy today?

Much of the potential with Filtronic is tied up in the success of the space industry at large. We have seen applications for taking things to orbit already such as Starlink. And BAE Systems has just released a new spacecraft for space defence too. If the use cases continue to grow then the valuable technology Filtronic provides could as well.

The risks are that this is a new industry and valuations are sky high. Filtronic now has a price-to-earnings ratio of 71 – making it one of the most expensive stocks on that metric across the whole FTSE 350. To take another example, SpaceX is aiming for a market cap of $2trn with a purported revenue of $16bn and earnings of $8bn. Pricey stuff.

My view? I’m not focusing on a time period as short as the past eight months. I think the company makes good products that are needed in a growing industry. I like its prospects over the long term and think it’s worth considering today.

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For those keeping count, that’s a barnstorming 2,290% increase since April 2023!

Yet one broker sees even more gains ahead and has just massively lifted its price target. Why has it turned so bullish?

Supersonic Filtronic

As a quick reminder, Filtronic is a specialist electronics company that designs and makes radio frequency (RF), microwave, and mmWave components. These are used across telecommunications, aerospace, and defence, and the space sector.

Filtronic shareholders can thank the latter for the stock’s surge, specifically Elon Musk’s SpaceX. The rocket and satellite giant partnered with the UK company in 2024 after taking a fancy to its E-band solid state power amplifiers and transceivers.

These allow Starlink satellites to talk to the ground at ultra-high speeds. In August, Filtronic bagged a £47.3m ($62.5m) contract with SpaceX, its largest ever deal.

For context, that was more than the firm generated in revenue for the whole of the previous year. CEO Nat Edington said the contract “validates the strength of our engineering capability“.

Bullish broker

Yesterday (28 April), Berenberg Bank reiterated its Buy recommendation on Filtronic and upped its share price target to 360p. That was well beyond its previous target of 213p, and is 37% above the current price.

The analyst team has turned more bullish after visiting the company’s new headquarters and manufacturing facility in County Durham. It called Filtronic “one of the best-positioned pure-play space names” in the UK. 

While only three City brokers have covered the stock in the past three months, all rated it a Buy. However, the average price target among them is just 0.5% higher, including Berenberg’s 360p.

SpaceX war chest

Of course, analysts’ price targets often change like the wind, so they can’t be relied upon as gospel. But it’s hard not to be bullish about Filtronic’s future growth prosects.

After all, strategic partner SpaceX is gearing up for a massive IPO this summer. It may be the biggest ever if Elon Musk gets his way, with a $1.75trn valuation being talked about.

The good news for Filtronic is that SpaceX will be flush with cash if it raises between $50bn and $75bn of new capital. And with expansion of its Starlink satellite constellation a key priority, this bodes well for Filtronic’s high-frequency RF solutions.

Our core markets of space and defence continue to be supported by sustained satellite deployment activity, increased defence expenditure and growing requirements for secure, high-frequency communications.
Filtronic

Two key risks

Now, as bullish as I am (I’ve highlighted this stock nearly every month since January 2025), there are two risks to bear in mind.

The first is that record contracts from SpaceX have led to significant customer concentration. If anything went awry with this partnership, the share price could quickly collapse.

The second concern relates to valuation. After surging 187% in the past year, the stock now traded at more than 10 times sales. The forward price-to-earnings ratio is approximately 75.

I think a premium is warranted here due to the Starlink and defence growth opportunities. However, with the valuation looking a bit stretched, investors may want to consider building a position gradually through dips. 

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Showing this figure isn’t just science fiction, we had two developments last week. First, there was NASA’s successful Artemis II rocket launch that sent humans towards the Moon for the first time in over 50 years. Second, industry juggernaut SpaceX has reportedly filed to go public at a potential valuation of $1.75trn.

Here are three stocks to consider buying for exposure to the booming space economy.

SpaceTech fund

Let’s start with Seraphim Space Investment Trust (LSE:SSIT). This £365m trust invests in earlier-stage growth companies involved with space technology (SpaceTech).

The stock’s had an amazing run, going from 51p to above 150p in just 12 months.

However, this hasn’t been driven by mere hype, but actual tangible progress made by its portfolio companies. In March, it announced a 20% jump in its net asset value (NAV), or an increase of £56.4m.  

For example, Finnish microsatellite firm ICEYE secured a massive €1.7bn space reconnaissance contract from the German government alongside its partner, defence giant Rheinmetall. ALL.SPACE, HawkEye 360, and D-Orbit also received meaningful valuation uplifts.

It’s worth noting that seven of the trust’s top 10 holdings expect to report EBITDA profitability in 2026. So these are far from starry-eyed start-ups in garages.

The biggest risk would be Europe turning off the funding tap. However, while this can’t be ruled out, I think President Trump threatening to leave NATO makes it even more likely that Europe spends hundreds of billions building out its own space and defence capabilities.

If so, then many of the key holdings here should benefit massively. As I write, the trust’s trading at a 5% premium to NAV, suggesting that its valuation is far from bonkers.

European blue chip

Next, we have Airbus (ENXT:AIR), whose share price is down roughly 22% since January.

While primarily a maker of passenger jets, Airbus also has a Defence and Space division. Last year, revenue here increased 11% year on year to €13.4bn, while order intake surged to a record €17.7bn.

Airbus built the European Service Module for NASA’s Artemis programme, providing power and life support for the Orion spacecraft heading to the Moon.  

Rather than a pureplay space stock, Airbus is a stable, profitable giant with a massive backlog of 8,754 commercial aircraft. Supply chain shortages could result in production delays, but the forward price-to-earnings multiple of 22 looks reasonable to me.

AIM-listed stock

Returning to SpaceX, let’s end with Filtronic (LSE:FTC). This is a small-ish UK company with a £435m market-cap that designs and manufactures advanced radio frequency (RF) solutions for the space, aerospace and defence, and telecoms markets.

A deal signed with SpaceX to support SpaceX’s Starlink satellite constellation has been transformative. Revenue ballooned from £16.3m in 2023 to £56.3m last year.

The flip side to this is that SpaceX now makes up the vast bulk of revenue, which adds concentration risk. However, it’s worth noting that Filtronic is having success diversifying revenue streams.

For example, last week it was selected by a major European defence firm to provide it with components, building on an $8m contract won with the US army the week before.

The post 3 top space stocks to consider buying for an ISA in April appeared first on The Twelfth Magpie.

There are a number of small-cap UK defence stocks that have delivered far higher returns over the last six months, however. Here are three to check out.

Advanced space technology

First up, we have Filtronic (LSE: FTC), which is up about 50% over the last six months. This is a technology company that specialises in advanced wireless communication solutions.

It’s had a lot of success in recent years selling wireless components to SpaceX. It’s now having success selling satellite and sensor hardware to defence businesses.

For example, in December, the company won a £11m contract with a major defence prime. “This latest win deepens our engagement with a key European defence customer and strengthens Filtronic’s position in the defence sector, a growing market for the group,” said CEO Nat Edington at the time.

After its recent run up, this stock looks a little expensive. The forward-looking price-to-earnings (P/E) ratio is now over 50 – this doesn’t leave any room for an operational setback (eg the loss of a key customer).

Taking a five-year view, however, I see a lot of potential. So, I think the stock is worth considering.

Nuclear radiation protection

Next, we have Kromek (LSE: KMK), which is up about 150% over six months. It provides nuclear radiation detection solutions to the global defence and security markets.

Its product portfolio ranges from personal, handheld, and wearable devices to systems that can be mounted on remotely operated vehicles (ROVs) or drones. Note that the company has worked in partnership with the US Department of Defense’s Defense Threat Reduction Agency (DTRA) and the Defense Advanced Research Projects Agency (DARPA) to develop high quality products and solutions that meet the needs of leading players in the defence and security industries.

I think this company has a lot of growth potential and is worth a closer look. It could do well in the years ahead as governments spend more on defence (note that sales in its chemical, biological, radiological, and nuclear defence (CBRN) segment more than doubled in the first half of the current financial year).

That said, this is a very small business and profits could be up and down. So, the stock could be volatile.

Rugged computing products

Finally, we have Concurrent Technologies (LSE: CNC), which is up about 50% over six months. It makes rugged high-performance computing products designed for the defence and aerospace markets.

This company has a lot of momentum at present. In January, it told investors that it generated double-digit growth for 2025 and that total order intake for FY25 was a record £47m (versus £41m in 2024).

It added that it has started 2026 with good momentum, underpinned by robust customer demand, record order intake, and a growing pipeline of design wins that are expected to convert into production revenues. This all sounds very promising.

The forward-looking P/E here is about 35, so again, we have an expensive stock that doesn’t have a lot of room for error. However, with earnings per share expected to grow by around 20% this year, it could still be worth a look.

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First some context. Both rank among the Footsie’s top five performers over the past five years, along with Rolls-Royce, Airtel Africa and Fresnillo.

Here are the returns from this magnificent quintet of UK shares.

The common theme for three of these is that they’re in the aerospace and defence sector. BAE Systems is an industry giant and Babcock operates the UK’s nuclear submarine bases. Meanwhile, Rolls-Royce has a thriving defence division.

All three stocks got a boost today (16 February), with Babcock jumping almost 4%. Shareholders can thank news surrounding the prime minister, Keir Starmer.

Spend more, faster

According to the BBC, Prime Minister Starmer is considering increasing defence spending faster than expected. Originally the government had announced plans to spend 2.5% of gross domestic product (GDP) on defence by 2027. This would rise to 3% by the next parliament.

However, the BBC reports that this 3% could be met by the end of this parliament (scheduled for 2029). Bringing this forward would cost billions of pounds.

At the Munich Security Conference over the weekend, the PM said: “To meet the wider threat, it’s clear that we are going to have to spend more, faster.”

Needless to say, spending more faster would benefit Babcock, which has a far higher proportion of sales tied to the Ministry of Defence than BAE. But this would benefit them all, including Melrose Industries, which owns GKN Aerospace and supplies military airframes and engines.

Of course, there’s a risk these stocks pull back if the UK government doesn’t rustle up the cash for this extra defence splurge. But looking at their respective share price rises today, the market’s clear which it thinks could benefit the most.

• Babcock +3.8%
• Melrose +3.8%
• BAE +3.1%
• Rolls-Royce +1.5%

AIM-listed gem

Before ending, I want to highlight another defence-adjacent stock that should benefit from higher military budgets. That is Filtronic (LSE:FTC), the smaller AIM-listed share that’s up 3.2% today.

The company designs and makes communication systems used in various sectors, including telecommunications (5G), defence, and space. For example, it provides radio frequency (RF) solutions for radar systems and electronic warfare.

But it’s satellite communication systems that have put a rocket booster under the share price. Specifically, strategic partner SpaceX, with whom it has signed a handful of contracts, including one worth $62.5m last year. This it to provide components for the rapidly expanding Starlink satellite internet service.

Revenue has surged from £16.3m in FY23 to £56.3m in FY25 (which ended in May). There’s expected to be a lull in growth this year due to the timing of the SpaceX orders, but Filtronic has a record order book and its next-generation GaN amplifier systems are set to be a “key driver of growth over the next three to five years“.

One thing to be aware of here is that SpaceX accounted for 83% of revenue last year, so there’s significant customer concentration risk. However, the firm’s diversifying its customer base, with large contracts being won with European space/defence contractors. Higher, faster spending should provide a further boost.

Naturally, some investors have ethical issues with defence-related stocks. But for those who don’t, I think Filtronic’s worth considering buying for the next five years.

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The answer depends on a few factors: how much you put in, for how long and by how much it grows (or not).

Doing the maths

For example, imagine someone puts £150 per week into their ISA for 35 years.

How big that grows to be will depend on their compound annual growth rate, or CAGR. At a CAGR of 5%, it would hit over £720k.

At 10%, that number would be £2.2m. At a 15% CAGR, after 35 years the ISA ought to be worth £7.3m. Yes, £7.3m!

Tough, but doable

A CAGR includes capital gains but also dividends. However, capital losses (from selling shares for less than you bought them) would eat into it. And dividends are never guaranteed.

Another point some people overlook is the negative long-term impact of dealing fees and account costs, so it pays to hunt around for the best Stocks and Shares ISA.

Is a 15% CAGR achievable – or even 10% or 5%?

All three are achievable, but even 5% can be harder than it looks, as over the long term (like 35 years) there will be bad as well as good years in the market. Some very careful selection of shares would be required.

I also think 15% is feasible, but it is above what most investors would achieve in their ISA over the long run. Taking steps to be a good investor might help improve performance.

Looking for brilliant shares

Success stories can give us some clues.

One UK share that has left that 15% CAGR goal in the dust is Filtronic (LSE: FTC). It is up 2,406% in just five years.

It is easy to point to one key reason for that: Filtronic has won some huge contracts with SpaceX, which is a shareholder.

That means there is a concentration risk. If anything happens to sour that relationship, or SpaceX’s needs change, Filtronic’s revenues could plummet.

But there is a bigger question to be asked: why has SpaceX been happy to buy lots of specialist solid-state power amplifiers from a fairly small business based in the north of England?

It is not charity. Filtronic has identified that the space market is set to grow and needs some very specialist components, that only a limited number of companies worldwide have the necessary expertise or ability to make. SpaceX came knocking as a result of Filtronic’s strategic choices.

It has been investing in growing its capabilities, ready to ride any upturn in demand not only from SpaceX and other space companies, but also other clients like aerospace manufacturers.

It has entered the second half of its current financial year with a record order book and also points to “increasing customer diversification”. That might help reduce the concentration risk I mentioned above.

The Filtronic share price has soared because it has a compelling value proposition in a growing market. I see it as a share worth considering.

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That’s why Filtronic (LSE:FTC) has caught my eye. Its share price has soared over 1,600% in three years. Over this period, it’s comfortably met Peter Lynch’s definition of a 10-bagger, something that appreciates at least 10 times (1,000%) in value.

However, could there be more to come? Let’s take a closer look.

What does it do?

Filtronic provides bespoke innovative radio frequency solutions, which it claims can’t be found anywhere else. It seeks to increase bandwidth, lower latency, and improve reliability. And with the spectrum becoming limited and increasingly complex, the company’s services are likely to become even more important.

Some of the solutions it provides include facilitating critical communications for emergency responders, enabling high-performance transmission of data from ground to space, and helping transfer the big data necessary for 5G telephone networks.

It’s doing particularly well in two industries that are experiencing huge growth at the moment. FY25 saw a record order intake from the space sector, including contract wins with SpaceX, the European Space Agency and Airbus. In the defence space – admittedly, this might not appeal to some ethical investors – it also secured new work with QinetiQ and BAE Systems.

How’s it performing?

Surprisingly, for a company that’s been around for over 45 years, it’s growing remarkably quickly. During the year ended 31 May 2025 (FY25), its revenue was £56.3m, 121% higher than for FY24. Its FY25 adjusted EBITDA was £17m, 248% better than in FY24.

But this growth trajectory’s likely to be interrupted in FY26. EPS is currently (2 February) forecast to be around half that for FY25. This reflects the completion of some one-off work for SpaceX. Analysts’ consensus is for FY26 revenue of £55.5m and EBITDA of £10.9m.

Its reliance on SpaceX is a double-edged sword. Filtronic says its “initial strategic partnership” with the group was “the enabler” for the FY25 revenue and profit growth. But with Elon Musk’s company contributing 83% of turnover during the year, this could be an issue if something goes wrong.

On the other hand, I’ve seen one forecast suggesting SpaceX will be worth $12.8trn by 2040. If correct, I’m sure Filtronic will be one of the beneficiaries.

What does this all mean?

The group’s share price rally means its forward (FY26) earnings multiple of 61 is on the high side. And when a company’s share price grows exponentially, investors could be forgiven for thinking they’ve missed the boat. However, in April 2025, I thought that about Rolls-Royce. But it’s now the best performing share I own.

In my opinion, Filtronic’s a stock to consider for the long term. It’s clearly good at what it does and, like Rolls-Royce, has established a reputation for engineering excellence. But with the majority of its revenue coming from one customer, there’s likely to be a few bumps along the way and I suspect its share price performance over the next few years is unlikely to match the recent success of Rolls-Royce.

However, with the defence and space sectors attracting lots of attention at the moment, I reckon those who are prepared to ignore these bumps and sit tight could be handsomely rewarded.

The post Could Filtronic shares be the next Rolls-Royce? appeared first on The Twelfth Magpie.

A British defence stock flying under the radar

The one I want to highlight today is Filtronic (LSE: FTC). It specialises in the design and manufacture of mission-critical communication networks.

As I write this, it’s trading for 184p. So a £1,000 investment would buy 543 shares (ignoring trading commissions).

Exposure to the space and defence markets

In recent years, Filtronic has had a lot of success selling cutting-edge wireless communication components to Elon Musk’s space company SpaceX. Last year, for example, it secured a contract with the space powerhouse worth a whopping $62.5m.

However, it’s now starting to see success in the defence space too. In December, for instance, it announced it had won a £7m contract with an unnamed European defence prime contractor to supply high-performance active components for a long-standing electronic sensor programme.

“This latest win deepens our engagement with a key European defence customer and strengthens Filtronic’s position in the defence sector, a growing market for the group,” said CEO Nat Edington at the time.

“As we invest in capability and capacity, Filtronic is increasingly well positioned to support long-term demand for advanced radio frequency solutions in the defence market,” he added.

Another defence deal worth highlighting was a £13.4m contract awarded in July last year. This was for the supply of high-performance modules for an electronic sensor system.

Worth a look today?

Is this stock worth considering for an investment portfolio today? I think so.

It’s not cheap. Currently, the forward-looking price-to-earnings (P/E) ratio is about 50. But I don’t see the high earnings multiple as a dealbreaker. Because this company’s operating in two fast-growing markets (defence and space) and it’s growing at a rapid rate.

This financial year (ending 31 May), revenue’s expected to hit £55m. That compares to £16.3m three years earlier (annualised growth of around 50%).

Significant long-term potential

Of course, there are no guarantees the company’s revenues will continue to soar. And one risk to be aware of with this stock is the fact that revenues tend to be lumpy.

So Filtronic could experience a period of lower growth, unsettling some investors and leading to share price volatility.

Customer concentration risk is another issue to think about. Recently, a lot of the company’s revenue has been coming from SpaceX.

If an investor’s willing to take a five-year-plus view though (our preferred investment horizon here at The Motley Fool), I think this stock could do really well. With a strong balance sheet, a growing pipeline, and exposure to two big growth markets, the company looks well placed for success and is one to consider.

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