Last Update 14 Dec 25

KOPN: Expanding Defense Microdisplay Contracts Will Drive Future Share Momentum

Analysts have raised their price targets for Kopin into roughly the $4 to $5.50 range, citing the company's robust government driven pipeline, confirmation of its preferred supplier status on key defense contracts, and reduced legal overhang following the BlueRadios lawsuit resolution.

Analyst Commentary

Bullish analysts emphasize that the series of price target increases reflects growing conviction in Kopin's execution against a sizable government-driven opportunity set, with valuation still seen as attractive relative to its expanding backlog and technology positioning.

Bullish Takeaways

Bullish analysts highlight Kopin's robust pipeline of defense and government programs, arguing that continued contract wins support visibility into multiyear revenue growth and justify higher price targets.
Recent MicroLED and microdisplay developments are viewed as important technology milestones that can support a premium multiple, as they reinforce Kopin's positioning as a preferred supplier for next-generation defense optics.
The resolution of the BlueRadios lawsuit is seen as a meaningful de-risking event, reducing legal uncertainty around future cash flows and allowing investors to focus on underlying execution and margin expansion.
Strategic investment from a leading international defense optics partner is interpreted as external validation of Kopin's technology and long-term growth prospects, supporting the case for multiple expansion as the partnership scales.

Bearish Takeaways

Bearish analysts remain concerned that a challenging government funding environment could delay or resize certain programs, creating near-term volatility in revenue realization and limiting upside to current valuation.
The BlueRadios payment, while smaller than the initial jury recommendation, still represents a sizable cash outlay that could constrain capital allocation flexibility and slow balance sheet improvement in the short term.
Execution risk around ramping complex defense programs and integrating strategic partnerships is flagged as a key overhang, with any missteps potentially pressuring margins and undermining the bullish growth narrative.
Some investors question the sustainability of current enthusiasm if follow-on awards or new program wins do not materialize at the pace implied by recent target hikes, which could lead to multiple compression from elevated levels.

What's in the News

Awarded a $15.4 million Other Transaction Agreement from the U.S. Department of Defense to accelerate ultra bright, full color MicroLED displays for ground soldier AR, reinforcing Kopin's role in the U.S. defense industrial base (Key Developments)
Secured approximately $3 million in first production orders for flight qualified MicroLED displays from a tier one aerospace company to upgrade legacy Heads Up Displays in combat aircraft, marking entry into a new combat aviation market (Key Developments)
Entered into a large private placement to raise about $41 million in gross proceeds, bringing in new strategic investors Ondas Holdings and Unusual Machines alongside returning investor Theon International, strengthening the balance sheet and growth funding (Key Developments)
Closed additional private placement transactions in October 2025, including a $15 million raise with regulatory approval, further enhancing liquidity to support program ramps and technology investment (Key Developments)
Filed an appeal of the $19.7 million BlueRadios judgment and posted a $23 million bond via bank loan agreements and a letter of credit structure, extending the legal process while tying up a significant cash balance as collateral (Key Developments)

Valuation Changes

Fair Value: Unchanged at approximately $4.85 per share, indicating no adjustment to the core intrinsic value estimate.
Discount Rate: Risen slightly from about 10.39 percent to 10.44 percent, reflecting a modest increase in perceived risk or required return.
Revenue Growth: Effectively unchanged at roughly 31.0 percent, suggesting stable expectations for top line expansion.
Net Profit Margin: Essentially flat at about 10.9 percent, indicating no material shift in long term profitability assumptions.
Future P/E: Edged up slightly from around 125.7x to 125.8x, implying a marginally higher valuation multiple on forward earnings.

Strategic partnership and investments expand access to global defense markets, driving revenue growth and improving earnings reliability.
Advanced manufacturing, automation, and display innovation boost efficiency, lower costs, and increase margins while strengthening technology leadership and market opportunities.
Ongoing losses, reliance on volatile government funding, unproven cost-saving efforts, nonexclusive partnerships, and rapid tech shifts threaten Kopin's profitability, margins, and future relevance.

Catalysts

About Kopin

Develops, manufactures, and sells microdisplays, subassemblies, and related components for defense, enterprise, industrial, and consumer products in the United States, the Asia-Pacific, Europe, and internationally.What are the underlying business or industry changes driving this perspective?

The strategic partnership and $15 million investment from Theon International positions Kopin to broaden its reach into key defense markets in Europe, Southeast Asia, and NATO allied countries, allowing access to increased defense budgets and long-term military modernization programs; this is expected to drive significant revenue growth and improved earnings visibility.
Application-specific solutions (such as DayVAS and DarkWAVE), developed in collaboration with Theon, and increased manufacturing utilization at the Dalgety Bay facility are likely to boost production efficiency and capacity absorption, thereby increasing gross margins and reducing operating costs.
Acceleration in automation and optical inspection within Kopin's manufacturing line is set to yield material operating expense reductions by late 2025 and into 2026, raising profitability and net margins as volume scales.
Major secular increases in global defense spending and a $22 billion+ pipeline of U.S. military technology upgrades (such as the SBMC/IVAS program), for which Kopin's microdisplays are integral, support a robust outlook for future contract wins, enhancing long-term revenue stability and growth.
Ongoing innovation in OLED, MicroLED, and custom neural display hardware for AR, VR, and next-gen soldier vision systems strengthens Kopin's technology leadership, leading to new market opportunities and premium product mix, with the potential to improve both top-line revenue and gross profitability over time.

Kopin Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Kopin's revenue will grow by 19.9% annually over the next 3 years.
Analysts assume that profit margins will increase from -29.1% today to 14.6% in 3 years time.
Analysts expect earnings to reach $11.8 million (and earnings per share of $0.07) by about September 2028, up from $-13.7 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 46.3x on those 2028 earnings, up from -23.4x today. This future PE is greater than the current PE for the US Semiconductor industry at 30.1x.
Analysts expect the number of shares outstanding to grow by 1.75% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 10.08%, as per the Simply Wall St company report.

Kopin Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent net losses (Q2 2025 net loss of $5.2 million on $8.5 million in revenue), high operating expenses, and negative cash flow ($7.6 million used in operating activities in H1 2025) raise concerns about long-term profitability and may require future capital raises, potentially diluting shareholders and impacting earnings per share.
The company's significant reliance on government and defense sector funding exposes Kopin to budgeting delays and volatility, as seen in Q2 when government uncertainty led to a "sales vacuum"; continued dependency could destabilize revenue streams and limit margin visibility in the long term.
Although new partnerships like Theon present opportunities, the manufacturing automation and cost-saving initiatives are not yet fully operational or proven, and delays or underperformance in these could keep gross margins low (94% cost of product revenues in Q2 2025), directly affecting net margins and profitability.
Theon's supply agreements are nonexclusive and Kopin's competitors also have OLED supply deals with them; this lack of exclusivity risks limited market share gains, raises the threat of pricing competition, and could constrain Kopin's revenue growth and margin improvement if competitors outpace on technology or price.
Market and technology trends suggest rapid evolution in display technologies (e.g., OLED, MicroLED, LCD), with the risk that if Kopin cannot match or surpass competitors in innovation, quality, and scalability, its core products may lose relevance and its long-term revenues and earnings potential could diminish.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $2.5 for Kopin based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $81.0 million, earnings will come to $11.8 million, and it would be trading on a PE ratio of 46.3x, assuming you use a discount rate of 10.1%.
Given the current share price of $2.05, the analyst price target of $2.5 is 18.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

KOPN: Defense Contract Momentum Will Drive Domestic Supply Leadership