SpaceX supplier tipped to generate 44% upside
This stock has been a great investment but a drift lower since the summer creates a buy opportunity, says one City analyst who has just started covering the company.
16th October 2025 13:41
by Graeme Evans from interactive investor
An AIM 10-bagger with a strong connection to the recent space industry success of Scottish Mortgage Ord (LSE:SMT) Investment Trust was today described as being at an “attractive entry point”.
Filtronic (LSE:FTC) shares have soared by 1,000% since 2023 and by more than 200% since April 2024’s five-year strategic partnership to supply SpaceX’s Starlink satellite internet platform.
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The radio frequency communications business, which issued nine outlook upgrades during the 2024 financial year, has since fallen back from this summer’s share price peak of 175p.
That’s despite strong annual results in July and the following month’s announcement of its largest single SpaceX order worth £47.3 million. The shares ended September at 119p, prompting Berenberg to highlight an attractive entry point for “this high-growth story”.
The City bank described County Durham-based Filtronic as a unique stock offering investors exposure to the booming space industry as well as an accelerating European defence market.
Believing that there is much more growth still to come, Berenberg this week initiated coverage of the company with a price target of 196p. That represents a 44% upside on today’s price.
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Filtronic’s other strategically important customers include the European Space Agency, as well as BAE Maritime and QinetiQ Group (LSE:QQ.) for radar systems.
But the most significant by far is SpaceX after Filtronic extended a relationship that began with initial production orders in early 2023.
Group revenue for the year to 31 May more than doubled to £56.3 million as Filtronic harnessed the manufacturing know-how developed from years of supplying the high-volume telecoms infrastructure market to scale operations to meet SpaceX demand.
Operating costs increased by 68% in the year to £21 million, reflecting the accelerated speed at which Filtronic is scaling the business to capitalise on the market opportunities.
With its trading closely linked to SpaceX’s expansion of its constellation, the Elon Musk-backed business contributed 83% of 2025’s revenue compared with 48% in the 2024 year.
Mindful of this concentration Filtronic told investors in its annual report that it was determined to diversify its customer base during the current financial year.
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New space order wins were recently announced with Viasat/European Space Agency and Airbus SE (EURONEXT:AIR) in the low earth orbit market, while further contracts have been awarded with aerospace and defence customers such as Leonardo SpA Az nom Post raggruppamento (MTA:LDO).
It added: “We also have material revenue to be recognised from contracts with the European Space Agency, BAE Maritime and QinetiQ, won in the prior year, which will positively impact 2026 and beyond.”
The growth of SpaceX has also been a factor in the share price upturn of Scottish Mortgage Investment Trust, given that the business is now the largest part of the portfolio at 7.6%.
SpaceX produced a total return of 75.3% in the year to 30 June, making it the biggest positive contributor to Scottish Mortgage’s performance in the period behind Tesla Inc (NASDAQ:TSLA).
AIM stocks tend to be volatile high-risk/high-reward investments and are intended for people with an appropriate degree of equity trading knowledge and experience.
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