LPTH: Record Backlog Will Support Margin Expansion Through FY26 And FY27

Analysts have nudged their price targets on LightPath Technologies higher into a roughly $10 to $11 range, citing a record and robust backlog, accelerating revenue growth with improving margins, and confidence that the company's move up the value chain can sustain momentum through FY26 and FY27.

Analyst Commentary

Bullish analysts are aligning around a constructive view on LightPath, arguing that the recent price target hikes better reflect the company’s accelerating growth profile, expanding margins, and growing strategic relevance in its end markets.

Across recent research updates, they highlight that strong order activity, a record backlog, and a clearer path to operating leverage support higher valuation multiples and justify price targets in the low double digits.

Bullish Takeaways

• Bullish analysts emphasize that LightPath’s record and robust backlog, including sizable new and follow on orders, underpins multiyear revenue visibility that they see as underappreciated in the current share price.
• They view the company’s shift up the value chain toward systems and higher value solutions as a structural driver of faster revenue growth and improving gross margins, supporting higher long term earnings power.
• Positive win momentum and upside potential versus existing FY26 outlooks are cited as catalysts that could drive estimate revisions and further price target increases if execution remains consistent.
• Analysts also point to previously implemented operational efficiencies and ramping top line growth as setting the stage for operating leverage. If this is realized, they argue it could justify a premium valuation relative to historical levels.

Bearish Takeaways

• More cautious analysts acknowledge that profitability remains lighter than some investors may prefer, arguing that sustained margin expansion and leverage must still be proven over several quarters.
• There is concern that expectations embedded in higher price targets assume continued order strength and no material slippage in the sizeable backlog, leaving limited room for execution missteps.
• Some warn that the company’s strategy to move further up the value chain introduces added complexity in product development and delivery, which could create near term volatility in margins and cash flow.
• Analysts also note that valuation has begun to price in successful delivery on FY26 and FY27 growth ambitions, increasing sensitivity to any slowdown in bookings or delays in converting large pipeline opportunities.

What's in the News

• Secured a new $4.8 million purchase order from an existing customer for advanced infrared camera systems for public safety applications, scheduled for delivery in fiscal 2026, building on prior large IR camera wins with the same customer (Key Developments).
• Received $22.1 million in follow on purchase orders from a leading global technology customer for advanced infrared camera systems to be delivered in calendar 2027, following an earlier $18.2 million order for calendar 2026 (Key Developments).
• Entered into a definitive agreement for an $8 million private placement of 1.6 million Class A shares at $5 per share, with equal participation from Ondas Holdings and Unusual Machines, both investing $4 million, under Regulation D (Key Developments).
• Added as a constituent to the S&P Global BMI Index, which may broaden the shareholder base and increase visibility among institutional investors (Key Developments).

Valuation Changes

• Fair Value: Unchanged at approximately $10.50 per share, indicating no material shift in the intrinsic value estimate.
• Discount Rate: Edged down slightly from about 8.51 percent to 8.51 percent, reflecting a marginal decrease in perceived risk or cost of capital.
• Revenue Growth: Essentially unchanged at roughly 35.65 percent, suggesting stable expectations for top line expansion.
• Net Profit Margin: Remains effectively flat at around 8.75 percent, indicating no notable revision to long term profitability assumptions.
• Future P/E: Has decreased very slightly from about 77.0x to 77.0x, implying a negligible change in the valuation multiple applied to forward earnings.