KWESST Micro Systems (KWE) AI Stock Analysis

• Market Cap: C$6.55M
• Dividend Yield: N/A
• Average Volume (3M): 36.27K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.49
• Revenue Growth: 21.86%
• EPS Growth: 66.91%
• Country: CA
• Employees: 28
• Sector: Industrials
• Sector Strength: 66
• Industry: Aerospace & Defense
• EPS (TTM): -10.02
• Shares Outstanding: 10,082,423
• 10 Day Avg. Volume: 19,524
• 30 Day Avg. Volume: 36,269
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.15
• Price to Cash Flow (P/CF): -0.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

KWESST Micro Systems shows financial challenges with consistent losses and reliance on external funding, impacting the overall score negatively. Technical indicators suggest weak momentum, contributing to a bearish outlook. However, recent corporate events, including significant revenue growth and successful private placement, provide some positive momentum that could enhance future prospects. Valuation remains a concern due to the company's unprofitability.

KWESST Micro Systems Business Overview & Revenue Model

Company Description

KWESST Micro Systems (KWE) is a technology company operating within the defense and security sectors, specializing in the development of advanced tactical systems for military and law enforcement applications. The company's core products and services include micro systems such as Tactical Awareness and Situational Control (TASCS) systems, non-lethal systems, and counter-drone technology. These offerings are designed to enhance the operational effectiveness and situational awareness of defense and security personnel.

How the Company Makes Money

KWESST Micro Systems makes money through the sale and licensing of its advanced tactical systems and technologies to defense departments, law enforcement agencies, and corporate partners. The company generates revenue by providing innovative solutions that address specific challenges in the defense sector, such as enhanced situational awareness and counter-drone capabilities. Significant partnerships with government entities and defense contractors contribute to its earnings, as these collaborations often result in contracts and recurring revenue through service agreements and ongoing support for deployed systems.

KWESST Micro Systems Financial Statement Overview

Summary

KWESST Micro Systems faces significant financial challenges with consistent operational losses and negative cash flows. While revenue shows some growth, profitability remains elusive, and liquidity is heavily dependent on financing activities. The company needs to enhance its cost management and operational efficiency to achieve financial stability.

Income Statement

KWESST Micro Systems shows a volatile revenue trajectory with a moderate increase from 2023 to TTM 2024, yet overall revenue growth is inconsistent. Gross profit margin improved in TTM 2024 but remains low, reflecting cost control challenges. The net profit margin is negative, indicating persistent losses, while EBIT and EBITDA margins are also negative, highlighting operational inefficiencies.

Balance Sheet

The company maintains a moderate equity position with an improving equity ratio from the previous year. The debt-to-equity ratio is low, suggesting manageable debt levels. However, negative net income results in a negative ROE, indicating poor returns to shareholders. Overall, the balance sheet reflects a need for improved profitability and financial stability.

Cash Flow

Operating cash flow remains negative, indicating cash outflows from operations. Free cash flow is also negative but shows a slight improvement in TTM 2024 compared to prior periods. The operating cash flow to net income ratio suggests that the company struggles to convert earnings into cash. The cash flow from financing activities reflects reliance on external funding.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
2.26M	1.50M	1.23M	721.52K	1.28M	861.92K
	Gross Profit
625.17K	486.50K	-191.38K	184.78K	476.92K	511.41K
	EBIT
-10.21M	-9.80M	-12.10M	-10.09M	-9.20M	-1.93M
	EBITDA
-8.97M	-5.91M	-7.63M	-9.73M	-9.06M	-3.34M
	Net Income Common Stockholders
-10.50M	-7.44M	-9.31M	-10.52M	-9.32M	-3.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.47M	256.83K	5.41M	170.54K	2.69M	3.07M
	Total Assets
9.11M	5.62M	11.76M	7.32M	8.72M	5.31M
	Total Debt
403.98K	302.22K	429.52K	2.55M	361.16K	594.14K
	Net Debt
-2.07M	45.40K	-4.98M	2.38M	-2.33M	-2.48M
	Total Liabilities
5.48M	4.25M	7.82M	8.33M	2.59M	1.43M
	Stockholders Equity
3.63M	1.37M	3.94M	-1.00M	6.12M	3.88M
Cash Flow		Free Cash Flow
-9.57M	-9.17M	-15.38M	-5.62M	-7.30M	-2.06M
	Operating Cash Flow
-9.45M	-9.06M	-14.08M	-4.26M	-6.26M	-1.79M
	Investing Cash Flow
-116.94K	-111.15K	-1.44M	-1.11M	-1.07M	-390.97K
	Financing Cash Flow
9.95M	4.02M	20.76M	2.85M	6.94M	5.23M

KWESST Micro Systems Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KWE, the sentiment is Neutral. The current price of 0.6 is below the 20-day moving average (MA) of 0.70, below the 50-day MA of 0.81, and below the 200-day MA of 2.50, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 46.25 is Neutral, neither overbought nor oversold. The STOCH value of 45.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:KWE.

KWESST Micro Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$8.11B	13.34	1.17%	3.02%	4.16%	-15.14%
BB	56 Neutral	$3.58B	―	-13.55%	―	-26.72%	77.64%
KWE	45 Neutral	C$6.55M	―	-245.52%	―	21.86%	66.91%
PTK	44 Neutral	$371.44M	―	-161.80%	―	-78.34%	-9.55%
DYA	28 Underperform	C$71.23M	―	2492.91%	―	19.47%	-9.09%

KWESST Micro Systems Corporate Events

KWESST Micro Systems Upsizes Private Placement Amid Strong Investor Interest

KWESST Micro Systems Inc. announced the completion of the first tranche of its private placement, raising approximately CAD$3.5 million through the sale of common shares and pre-funded warrants to accredited and institutional investors. The company plans to use the proceeds for general working capital purposes. Due to strong investor interest, the offering is being upsized with a second tranche, expected to close shortly. This move reflects the company’s strategy to bolster its financial position and support ongoing operations, potentially enhancing its market presence and shareholder value.

KWESST Micro Systems Secures CAD $3.5 Million Through Private Placement

KWESST Micro Systems Inc. announced a CAD $3.5 million private placement with accredited and institutional investors to issue common shares and pre-funded warrants, which include additional common share purchase warrants. The funds raised will be used for general working capital purposes, and the offering is pending the approval of the TSX Venture Exchange, with ThinkEquity acting as the sole placement agent.

KWESST Micro Systems Reports 588% Revenue Growth in Q1 2025

KWESST Micro Systems reported a significant revenue increase of 588% for Q1 2025, attributed to robust growth in government contracts and their ARWEN business. The company’s gross margin improved to 45.6%, highlighting a successful shift from development to revenue generation, particularly through digitization initiatives and higher-margin product sales.

KWESST Strengthens Leadership Team with Key Appointments

KWESST Micro Systems Inc., a company operating in the defense technology sector, has announced key additions to its leadership team to support its growth and product commercialization strategies. Jennifer Welsh, with extensive experience in finance and public companies, has been appointed as the new Chief Financial Officer and Chief Compliance Officer, bringing valuable skills in managing large-scale operations and public market relations. Additionally, James Yersh joins the Board as Director and Chair of the Audit Committee, bringing his expertise from senior roles in technology and finance companies. These appointments are expected to strengthen KWESST’s operations and support its market expansion efforts.

KWESST Micro Systems Sees Revenue Surge Amid Strategic Shift

KWESST Micro Systems has reported a 22% increase in revenue for fiscal 2024, transitioning from a development phase to a revenue ramp-up, fueled by major government contracts. The company achieved a gross profit margin of 32.3% and reduced its net loss by $1.9 million compared to the previous year, thanks to increased revenues and strategic cost reductions. Despite the rise in operating expenses due to R&D and compliance investments, KWESST is focused on capitalizing on defense contracts and commercializing its non-lethal munition systems.

KWESST Micro Systems Addresses Market Activity Surge

KWESST Micro Systems Inc. has reported no known operational changes that would explain recent spikes in its market activity. The company specializes in advanced tactical systems for military and security forces, offering innovative technologies that enhance real-time situational awareness and provide effective countermeasures.