UMAC

Unusual Machines is a sub-scale drone components business ($11.2M FY2025 revenue) being valued like a defense prime, at a $722M market cap and 64.5x P/S. The fundamentals do not support that price. Yes, revenue doubled YoY (+101.2%) and gross profit grew +152.7%, but gross margin is still only 34.9% on a tiny base, and operating margin is -224.6% — the company spent $25.2M to produce $11.2M of sales. Net loss was -$19.2M and operating cash burn was -$21.2M in FY2025, so the business itself consumes cash at roughly 2x its revenue.

The balance sheet looks deceptively pristine — $103M cash, $175M equity, liabilities/equity of 0.04x — but the MD&A reveals how it got there: an $300M At-the-Market sales agreement with Jones Trading signed August 28, 2025, under which the company already sold 4.67M shares in October 2025 at ~$15.46 for $72.1M gross. Shares outstanding rose +131.1% YoY to 38.9M, and management has explicit authorization to keep diluting up to the full $300M. Retained earnings stand at -$55.1M. This is a story stock funded by its own stock, not by the business.