Electro Optic Systems Holdings Ltd (ASX: EOS) shares have been among the ASX’s best performers over the past few years.

Much of the interest has come from the company’s growing order book and its push into high-energy laser weapons.

But another part of the EOS story is starting to catch my interest.

Europe.

The region is spending huge amounts of money rebuilding its defence capabilities, and EOS has been quietly putting itself in a better position to benefit.

So, could Europe become the company’s next major growth market?

Let’s take a closer look.

Europe is spending big on defence

There’s certainly no shortage of money being thrown at defence across Europe right now.

Last year, European NATO members and Canada increased defence spending by nearly 20%, or more than US$139 billion.

And that looks set to continue.

NATO members have committed to spending 5% of GDP on defence and security-related investment by 2035.

This includes at least 3.5% of GDP on core defence requirements.

Already, European members and Canada are spending close to 4% of GDP on defence and security.

There is plenty happening at the European Union level as well.

Its Readiness 2030 plan aims to mobilise up to 800 billion euros in additional defence spending.

This includes 150 billion euros to support joint procurement between member states.

Drones are also high on the shopping list.

The European Commission has launched a European Drone Defence Initiative to help strengthen the region’s defence capabilities by 2030.

EOS is building its European presence

One of the biggest changes came through EOS’ acquisition of MARSS earlier this year.

EOS completed its acquisition of the European defence technology company in May for around $134 million.

MARSS is behind NiDAR, a command-and-control platform designed to detect, track, and respond to threats such as drones.

The company has since relocated MARSS’ headquarters to Nice, France, giving EOS a bigger base in the region.

EOS also plans to expand its European operations from the site over the next three years.

And there are already signs that NiDAR is gaining traction.

BAE Systems selected the platform last year as the command-and-control system for its Battlespace Integrated Targeting System.

Could Europe drive the next leg of growth?

I think Europe could become a much bigger market for EOS over the next few years.

The company now has a bigger footprint in the region at a time when defence spending is climbing quickly.

Drones are also becoming a much bigger focus, which plays nicely into what EOS is already doing.

And with billions of dollars set to be spent on defence across Europe, there should be plenty of opportunities ahead.

The post Could Europe become the next big market for EOS? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 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.

The Telix Pharmaceuticals Ltd (ASX: TLX) share price is in focus today after the company announced the US FDA has granted Fast Track designation for its BiPASS program, which targets earlier and less invasive prostate cancer diagnosis.

What did Telix Pharmaceuticals report?

• Received FDA Fast Track designation for BiPASS, a pre-biopsy prostate cancer imaging program.
• BiPASS evaluates gallium-68 PSMA-PET imaging alongside MRI to guide prostate cancer diagnosis before biopsy.
• Completed Phase 3 patient enrollment for BiPASS, using Illuccix and Gozellix agents.
• Engaged positively with FDA, planning for a new drug application (NDA) to expand access to this imaging method.
• Clinical data shows combining PSMA-PET and MRI can reduce unnecessary biopsies by nearly 50%.

What else do investors need to know?

Telix Pharmaceuticals’ BiPASS program aims to address a significant unmet need. Currently, over three million prostate biopsies are performed worldwide each year, but up to 75% yield negative results, making many procedures unnecessary and stressful for patients.

The FDA’s Fast Track designation means Telix can engage with the regulator more frequently and could have its submission for approval reviewed more quickly. If approved, the BiPASS approach may broaden the use of advanced imaging in prostate cancer care.

In addition, the company’s commercial products, Illuccix and Gozellix, are already approved in multiple global markets for imaging PSMA-positive prostate cancer. However, their use in pre-biopsy diagnosis remains investigational.

What did Telix Pharmaceuticals management say?

Dr. David N. Cade, Group Chief Medical Officer at Telix, said:

Fast Track designation reflects the FDA’s recognition of the potential for BiPASS to address an important unmet need in the prostate cancer diagnostic pathway. We believe gallium-68 PSMA-PET, used alongside MRI, could help physicians make more informed decisions before biopsy, improve diagnostic confidence and potentially reduce unnecessary invasive procedures for patients. This designation supports continued close engagement with the FDA as we advance BiPASS toward an NDA submission.

What’s next for Telix Pharmaceuticals?

Telix plans to submit a new drug application (NDA) for BiPASS to the FDA, seeking approval for use before invasive prostate biopsies. If successful, this could open up a larger market and provide faster, less stressful diagnostic options for many patients.

The business continues to build on a broad pipeline, with late-stage programmes for prostate, brain, and kidney cancers, and aims to establish further growth in international markets.

Telix Pharmaceuticals share price snapshot

Over the past 12 months, the Telix Pharmaceuticals share price has risen 11%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.

View Original Announcement

The post Telix Pharmaceuticals wins FDA Fast Track for BiPASS prostate cancer imaging appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Zip Co Ltd (ASX: ZIP) shares are trading around $2.02 on Wednesday.

This means that for the buy now, pay later stock to double from here, it would need to reach $4.04.

That sounds like a big ask. But when I look at where earnings are expected to go over the next few years, I don’t think it is out of the question.

Earnings could do plenty of the work

The first thing I would want to see is Zip delivering on its earnings forecasts.

Consensus estimates point to earnings per share (EPS) of 15 cents in FY27, rising to 18 cents in FY28, and 22 cents in FY29.

That represents a 20% increase between FY27 and FY28, followed by another 22% increase in FY29.

At today’s $2.02 share price, Zip is trading on a P/E ratio of around 13.5 times forecast FY27 earnings. That falls to roughly 11 times FY28 earnings and a little over 9 times FY29 earnings.

I think those numbers explain why I can see a path towards a much higher share price.

If earnings keep climbing while the share price barely moves, Zip shares would become progressively cheaper. At some point, I think investors could become willing to pay more for that growth.

What valuation would $4.04 require?

At $4.04, Zip would trade at roughly 27 times forecast FY27 earnings.

That is much more demanding than today’s valuation.

But against the FY28 estimate, the P/E ratio falls to around 22 times and using FY29 earnings of 22 cents per share, it would be around 18 times.

That does not strike me as an impossible valuation if Zip is still producing robust earnings growth by then.

What would need to go right?

For those forecasts to become reality, Zip needs to keep growing the underlying business.

One part of that is continuing to win a greater share of the payments market in the United States and Australia. If more consumers use Zip and more merchants offer its payment options, transaction volumes should have room to keep expanding.

I would also want to see the customer base continue growing without Zip sacrificing credit quality in pursuit of that growth.

That means keeping bad debts under control as more users and transactions move through the platform.

If Zip can combine rising payment volumes and user growth with disciplined lending, I think the earnings outlook becomes much easier to believe.

And if the company can build a consistent track record of doing that, investors may eventually be prepared to pay a higher multiple for those earnings as well.

Foolish takeaway

I don’t think Zip shares need an extraordinary set of circumstances to double in value.

If Zip keeps taking market share, grows its customer base without letting bad debts get away from it, and reaches EPS of 22 cents by FY29, a $4.04 share price would represent less than 19 times earnings.

For a company still growing strongly at that point, I think that could be achievable.

The post What would it take for Zip shares to double? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.