BofA says HawkEye 360 is ‘flying below the radar’

Investing.com -- Bank of America upgraded HawkEye 360 to Buy from Neutral in a note Thursday, arguing that the radio-frequency intelligence company's shares are attractive after a selloff across space and defense stocks.

Analyst Ronald Epstein, who titled the note "attractive valuation flying below the radar," lowered his price target for the stock to $23 from $34 but said that with it recently trading around $16 (currently at $17.06 after a 5.5% rise so far on Thursday), it has room to run.

He said that while space and defense peers have sold off in recent weeks, "we see HAWK's underlying business as strong," pointing to second-quarter revenue growth of 87% and a $292 million backlog that provides visibility to 2026 targets.

International demand is a standout, Epstein said, with overseas revenue up 134% year over year to about 42% of sales, from roughly 30% a year earlier, driven by expanding sovereign customers and new wins.

Those included a multi-year contract with India and other regional partners for maritime domain awareness in the Indian Ocean. He said the shift also helps diversify HawkEye away from a concentrated group of U.S. agencies.

The analyst pointed to constellation expansion as a further driver, with Clusters 15 and 16 due to launch in the second half and lower-cost Block 3 satellites, about 75% cheaper than the prior generation, potentially launching by early 2027.

Epstein described a slowdown in U.S. revenue as a timing issue tied to the government shutdown and continuing resolution delays, offset by new awards from customers including the National Reconnaissance Office, Space Force and NASA.

His revised $23 target is based on 30 times 2027 EV/EBITDA.

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