V2X (VVX): Assessing Valuation After Winning Long-Term U.S. Air Force Modernization Contracts

V2X (VVX) has been on investors’ radar after locking in two sizable U.S. Air Force deals: a 10-year F-16 cockpit upgrade contract and a long-term Automated Test Systems support award.

See our latest analysis for V2X.

The latest contract wins seem to be feeding into a steady uptrend, with the share price at $57.2 after a solid year to date share price return and a strong three year total shareholder return. This suggests momentum is quietly building as investors re-rate V2X’s long term defense exposure.

If these deals have you rethinking the defense space, it could be a good moment to scout other opportunities across aerospace and defense stocks and see what else fits your portfolio.

With shares still trading at a notable discount to analyst targets and strong contract-driven growth coming through, the real question is whether VVX remains undervalued or if the market is already pricing in the next leg of upside.

Most Popular Narrative: 14.9% Undervalued

At a last close of $57.2 versus a narrative fair value of about $67.18 per share, the valuation case hinges on long dated defense cash flows.

Continued realization of operational synergies and efficiencies post merger, disciplined cost management, and strong free cash flow generation (supported by low capex and improving leverage) gives management financial flexibility for debt reduction, shareholder returns (for example, a $100M buyback), and targeted growth investments, all of which are expected to drive accelerated earnings per share growth.

Read the complete narrative.

Want to see how modest revenue growth, rising margins and a lower future earnings multiple still point to upside? The full narrative reveals the math.

Result: Fair Value of $67.18 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, recent book-to-bill softness and backlog declines highlight how dependent the story is on landing a handful of large, timely contract awards.

Find out about the key risks to this V2X narrative.

Build Your Own V2X Narrative

If this view does not quite match your own, dive into the numbers yourself and build a personalized thesis in just a few minutes, Do it your way.

A great starting point for your V2X research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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