Electro Optic Systems Holdings Ltd (ASX: EOS) shares have been very strong performers over the past 12 months.
Since this time last year, the ASX defence stock has risen an incredible 670%.
Is it too late to invest? Let's see what analysts at Bell Potter are saying about the defence and space company following its quarterly update.
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What is the broker saying?
Bell Potter was pleased with the company's strong cash generation during the first quarter. And while costs were higher than expected, the broker believes this is seasonal. It said:
EOS reported cash receipts of $72.6m in 1Q26 up $49.9m on 1Q25. Operating cash flow was $9.5m compared to $19.3m in 4Q25, a strong print for 1Q26, which is historically a weak quarter reflecting the timing of milestone completions achieved on customer contracts during the quarter. EOS reported a March 2026 cash balance of $95.1m falling $11.8m since 31 December 2025.
Capex was $8.2m during the period running ahead of our $15m CY26 estimate. Annualised operating cash costs were $134.5m which compares to our opex estimate of $124.5m for CY26e the higher print reflected seasonal one-offs such as yearly staff bonus payouts.
Bell Potter also highlights that the company's order book is growing, which bodes well for its future growth. It adds:
The unconditional contract backlog as at 31 March 2026 is $518m, an increase of $59m on the position at the start of the year. Constructive discussions continue regarding the US$80m HELW contract with Goldrone, with potential conversion to unconditional in 2Q26. EOS continued HELW product discussions with representatives from Germany, France, Italy, Turkey, Saudi Arabia, UAE, India, Korea, Australia, and the US.
Is it too late to buy this ASX defence stock?
According to the note, the broker has retained its buy rating on EOS shares with an improved price target of $10.40 (from $9.70).
Based on its current share price of $9.06, this implies potential upside of 15% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
We retain our Buy rating and [increase] our TP to $10.40 on lower CY27e earnings. EOS is positioned as a market leader in C-UAS solutions, particularly in directed energy, and is leveraged to increasing budget allocations to C-UAS technologies. Through both its kinetic and directed energy solutions, EOS has a long runway for growth.
