CPS Technologies Secures $1.15M Phase II Defense Contract Amid Financial Challenges

CPS Technologies (CPSH) secured a Phase II contract with the U.S. Army, valued at $1.15 million, to develop a controlled fragmentation tungsten warhead. The company has secured its fifth federally funded project in 2025 and aims to advance the warhead's development. However, CPSH faces financial challenges with negative margins, declining revenue growth, and low profitability metrics.

CPS Technologies (CPSH) has been awarded a Phase II Small Business Technology Transfer (STTR) contract by the U.S. Army Combat Capabilities Development Command (DEVCOM). The two-year contract, valued at $1.15 million, builds on the success of the Phase I program and focuses on the development of a 40mm warhead variant. This marks the fifth federally funded project for CPS Technologies in 2025.

Dr. Mark Occhionero, PhD, will continue as the principal investigator for the project. The contract aims to advance the development of the controlled fragmentation tungsten warhead, which has significant applications in military and defense sectors. This project aligns with CPS Technologies' expertise in producing advanced material solutions, including metal matrix composites (MMCs), for critical applications.

However, CPS Technologies faces financial challenges. The company reported a decline in revenue growth and profitability metrics, with negative margins in recent quarters. Despite these financial hurdles, the company has shown resilience by securing multiple federal contracts this year, including a Phase II Army STTR contract and four SBIR contracts.

The stock price of CPS Technologies has shown significant volatility, with a 16.61% increase in the current month and a 126.71% gain for the current year. The company's market capitalization stands at $50.11 million, with a P/E ratio of 26.2x for 2023 and an EV/Sales ratio of 0.94x for the same year.