MPTI

M-tron is a genuinely high-quality small-cap: frequency/spectrum-control products for aerospace, defense, space and avionics, with revenue compounding from $26.7M in FY2021 to $54.4M in FY2025 (+11% YoY) and net income from $1.58M to $8.45M (+10.6%). Margins are healthy (18.9% operating, 15.5% net) and the balance sheet is fortress-like — liabilities/equity of just 0.08x, $20.9M cash and $63.2M equity. Operating cash flow of $10.7M (+41.7%) comfortably funds the modest $2.55M capex. The headline forward signal is backlog: management reports it jumped 61.8% to $76.4M (1.4x FY revenue), driven by strong defense program shipments plus avionics and industrial demand, and expected to convert over 2026-2027. That is a concrete, filing-grounded reason to expect the growth to continue.

The catch is that you pay full price for it. At $91.02 the stock trades at 34.7x FY2025 diluted EPS and 6.0x sales for a business growing revenue ~11%. Worse, diluted EPS actually fell 1.1% to $2.62 despite net income rising 10.6% — the company issued stock (shares +22.5%, equity +102%, cash +65%), so per-share progress stalled even as the business grew. ROE also slipped to 13.4% as that fresh equity sits on the balance sheet. The MD&A flags gross margin compressing 180bps (46.2%→44.4%) on product mix and tariff-related costs, and notes FY2025 had no bonus expense versus a ~$1.5M ($1.5M, 3.0% of revenue) accrual in 2024 — a tailwind that flatters the YoY comparison and may not repeat.