CPSH

CPS Technologies had a genuinely strong FY2025: revenue jumped 54% to $32.6M, gross profit swung to $5.29M, and the company returned to profit ($420K net, $0.03 diluted EPS) after a -$3.14M loss in FY2024. The balance sheet is the bright spot — $24.6M equity against just $4.88M total liabilities (0.20x), $4.47M cash, and essentially no long-term debt. This is not a company at financial risk, and the green-economy positioning (baseplates for EV/HVDC/wind motor controllers, hermetic packages for radar/satellite, SiC/GaN module housings) gives it a credible secular tailwind that management explicitly leans on. That much is real and keeps this out of 'avoid' territory.

The problem is what you pay for it. At $5.57 the stock trades at 186x trailing diluted EPS and 3.1x sales for a business whose net margin is 1.3% and ROE is 1.7%. Earnings here are razor-thin and violently inconsistent — the five-year record runs $3.22M (2021) → $2.13M → $1.37M → -$3.14M (2024) → $0.42M (2025). Management itself flags why in the MD&A: fixed costs (applications engineering, tooling, process engineering) don't flex with volume, so 'changes in sales volume generally result in even greater changes in financial performance on a percentage basis.' That operating leverage cuts both ways, and the history shows the downside is a full swing to losses. A 186x multiple implicitly assumes the up-cycle persists; the filing's own numbers say that's far from guaranteed.