8 Best Small Cap Defense Stocks to Buy Now

3. V2X, Inc. (NYSE:VVX)

Market Cap: $1.88 billion

Number of Hedge Fund Holders: 21

V2X, Inc. (NYSE:VVX) is a leading provider of critical mission solutions and support services to defense clients in over 50 countries and territories.

The company’s market position has been bolstered with several recent contract awards, with a combined value of approximately $5 billion. In August, V2X, Inc. announced receiving a $747 million contract for maintenance of the F-5 aircraft, which plays a crucial role in training naval pilots through simulation capabilities and adversary combat tactics. Work on the project will boost Naval readiness and enhance the sustainability of these critical aerial assets.

During the same month, it secured a $3.7 billion Warfighter-Training Readiness Solutions (W-TRS) task order to provide readiness capabilities to every soldier and unit in the U.S. Army worldwide. It is a five-year contract. Earlier in the year, V2X, Inc. (NYSE:VVX) was awarded another five-year aviation support and training contract, valued at $400 million, by the Saudi Arabian Ministry of National Guard.

These contracts have strengthened the company’s revenue stream and also demonstrated its ability to secure long-term, high-value defense deals. As a result, Wall Street analysts are bullish on the stock with a consensus Buy rating, along with an average share price upside potential of over 15%.

V2X, Inc. (NYSE:VVX)’s financial performance also remained robust. In its recent Q3 2024 earnings call, the company reported a revenue of $1.08 billion, growing 8% from last year. The strong performance during the quarter was driven by a 31% increase in revenue in the Indo-Pacific and a 13% revenue growth in the Middle East – both year-over-year.

Adjusted EBITDA was posted at $82.7 million, up 28% from the prior year due to robust growth and improved productivity during the quarter. Diluted EPS was logged at $0.47, beating expectations of $0.35 per share. Adjusted diluted EPS was $1.29, up 77% from the same period last year.

Hedge fund sentiment around V2X, Inc. (NYSE:VVX) has improved as well. According to Insider Monkey’s database for Q3 2024, 21 hedge funds held stakes in the company, up from 16 at the end of Q2. It is one of the best defense stocks to buy now.