Electro Optic Systems Holdings Ltd (ASX: EOS) shares are in the spotlight again on Wednesday.
In morning trade, the defence and space company’s shares are up 9% to $9.52.
This compares favourably to the S&P/ASX 200 Index (ASX: XJO), which is largely flat at the time of writing.
In addition, it means that EOS shares are now up a remarkable 240% over the past 12 months.
To put that into context, a $5,000 investment a year ago would now be worth over $17,000.
Why are EOS shares storming higher again today?
Investors have been scrambling to buy the company’s shares today after it announced another big contract win for the recently acquired MARSS business.
According to the release, EOS’ Command and Control (C2) business, MARSS, has been selected as C2 provider for the BAE Systems (LSE: BA.) Anti Threat System (BATS). It is a next-generation, counter-drone (CUAS) capability.
Management advised that the MARSS NiDAR platform will serve as the intelligent “nerve centre” for BAE Systems’ Anti Threat System. Its AI-powered C2 platform, NiDAR, will be used to integrate sensors and effectors across the defence giant’s global BATS CUAS capability.
The company believes this selection by BAE Systems underscores MARSS’ position as one of very few companies with the ability to deliver advanced, AI-powered C2 platforms that accelerates decision-making from minutes to seconds across detection, classification, and defeat.
It thinks this capability positions MARSS as an ideal partner to support BAE Systems as it delivers market-leading CUAS solutions to meet the growing demand from NATO and international clients.
EOS advised that the collaboration agreement was signed at the Eurosatory Defence and Security Exhibition in Paris.
MARSS will provide both software licensing and technical support for BAE Systems’ CUAS demonstrations and deployments. It notes that in time, this may give rise to customer contracts for BAE Systems and for MARSS.
Should you invest?
While it has not had time to respond to today’s news, Bell Potter has been positive on EOS shares. Late last month, the broker put a buy rating and $10.60 price target on them.
In light of this, despite its heroics over the past 12 months, it is possible that there could still be more gains to come for shareholders over the next 12 months.
Time will tell if that proves accurate, but contract wins like the one with BAE Systems certainly help the bull case.
The post EOS shares rocket 9% on BAE Systems deal appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BAE Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.