Sypris Solutions, Inc. (SYPR) stock prices were up an absolutely monumental 59.07% as of the market closing on April 23rd, 2021, bringing the price per share up to USD$4.47. Subsequent pre-market fluctuations saw a dip of 3.58%, bringing the price down to USD$4.31, but this is most likely because of short-term investors cashing out.
Deal with U.S Dept. of Defense
The massive surge in SYPR stock prices came hot on the heels of the announcement that the company had signed a space exploration deal with the U.S. Government. In a deal that stems from a prime contractor of the United States Department of Defense, SYPR has been authorized to facilitate a government spacecraft program with the manufacturing and testing of electronic assemblies.
Details of the Spacecraft
With the spacecraft having the capacity to carry a crew and the ability to reenter the Earth’s atmosphere after the completion of its missions in deep space exploration, this is a massive opportunity for SYPR. Given that the spacecraft could potentially reach Mars, space exploration has an astronomical scope that extends well into the future. While financial details of the deal have not yet been disclosed, the company expects to begin parts production as early as 2021.
SYPR reported a significant increase of 280 basis points in consolidated gross margins for the year 2020 as compared to the numbers reported in 2019. This is despite a year-over-year 6.3% decrease in revenue that the company attributes to the effects of the COVID-19 pandemic in Q2 2020. Consolidated gross profits for 2020 were up 175 from 2019 and contributed to a 102.1% upswing in operating income. Overall, the company reported a 41.3% year-over-year increase in the full-year revenue for 2020, a promising indicator of the company’s strong backlog and enhanced electronic component availability.
Other Projects in the Works
2021 will also see the commencement of production of various electronic power supply modules for an anti-ship missile system, as well as the production of two additional axle shaft model lines in addition to its existing product lines. The axle shaft production is part of SYPR’s announcement of the extension of an existing long-term contract with a leading commercial vehicle manufacturer.
Future Outlook of SYPR
The company anticipates a 20% surge in revenue for 2021 as a cumulative result of their recent contract wins and improving market conditions. In light of the recent deal with the U.S DoD and the ongoing developments on other fronts, investors are very hopeful or significant and sustained growth in shareholder value.