Guggenheim Starts York Space Systems (YSS) at Neutral
Guggenheim analyst Michael Ciarmoli initiates coverage on York Space Systems (NYSE: YSS) with a Neutral rating.
The analyst comments "We are initiating coverage on York Space Systems, Inc. (YSS) with a NEUTRAL rating. We believe YSS, a low-cost payload agnostic space price contractor, can deliver gross margins of 30%+ and EBITDA margins of 20%+ due to its vertically integrated and modular BUS focused operating model. We believe YSS needs to drive revenue/product volumes through its manufacturing facilities by leveraging the hardware/software overlap utilized in its BUS operations to realize the full potential of its operating model. We note, backlog has eroded recently, which has negatively impacted the outlook for FY26 and likely FY27. Although the company’s opportunity pipeline stands at $11.5B, competition looms from larger, better capitalized prime contractors and newentrants who are also trying to ensure the security of the space domain. We note that end-customers do not seem to be placing value on YSS’s low-cost model or speed to market but given that the DoW is prioritizing speed as well, this may change."
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Shares of York Space Systems closed at $7.88 yesterday.