When investing in a share at nighttime, chilly days of early January, the concept that it might have already tripled by the top of August is a thought to heat the cockles! However that’s precisely what has occurred with Filtronic (LSE: FTC). Having been a penny inventory just some months in the past, the share has soared 252% up to now in 2024. What a return!

One thing else that has returned is a big buyer. Filtronic introduced at present (30 August) that rocket firm SpaceX has positioned a follow-on manufacturing order for its E-band stable state energy amplifier modules. These will probably be used to assist SpaceX rising the scale of its Starlink satellite tv for pc Web service.

Valued at roughly £6.4m, Filtronic mentioned the order means it now expects to commerce forward of expectations in its 2025 monetary yr.

As an investor, have I missed the boat with this one-time penny inventory? Or may its share price, in addition to its merchandise, nonetheless be heading to the celebs?

Blended monetary monitor report

With £25m of revenues final yr, that £6.4m contract win is important for Filtronic. I additionally suppose the truth that a buyer with the excessive technical demand of SpaceX is coming again with a sizeable repeat order is a robust endorsement of Filtronic’s providing. It may assist appeal to different clients, opening the door to income development not solely from SpaceX but additionally different firms.

However on the subject of the numbers, traditionally, income has not been as huge a problem for Filtronic as revenue. Final yr’s revenue of £3.1m after tax was first rate. However the yr earlier than, the quantity had been lower than a sixth of that.

That helps clarify the wild experience it has had. However what now?

May the prospect of ongoing income development imply mounted prices could be unfold thinner, boosting the underside line much more? Or may servicing huge contracts stretch the modest-sized firm and incur spending that drags it again into the purple, because it was just a few years in the past?

I’m tempted to purchase

Time will inform, and it may go both means. However I’m optimistic. It was solely final month Filtronic introduced a multimillion pound SpaceX order – and now it has introduced one other one.

If it could scale up gross sales considerably I reckon the corporate may enhance revenue margins. It’s an professional in a specialist discipline. Shoppers are keen to pay nicely – no good buyer desires to threat dropping a vastly pricey satellite tv for pc as a result of they scrimped on shopping for the fitting parts.

This yr’s share price rise has been unimaginable. However over 5 years, the shares have soared 944%!

The price-to-earnings (P/E) ratio of 53 is just too excessive for my style, but when I’m proper concerning the prospect for quick earnings development, the possible P/E ratio might be decrease.

I’m tempted by the funding case right here and will probably be weighing up making a Filtronic purchase in September.