Elmet Group is a buy, this analyst says

Roth Capital Partners analyst Chip Moore says Elmet Group (The Elmet Group Stock Quote, Chart, News, Analysts, Financials NASDAQ:ELMT) remains a differentiated supplier to aerospace, defence, energy and industrial customers, with demand and margins expected to improve.

In a June 25 update following Roth’s London conference, Moore reiterated his “Buy” rating and $21.00 target on Elmet.

“We anticipate growing demand and improving profitability,” Moore said.

Elmet provides precision-engineered components and high-powered microwave devices to blue-chip customers and the U.S. government. Moore said the company benefits from domestic manufacturing, onshoring trends and growing defence qualifications, with vertically integrated operations that source raw materials outside China and support products from design through final machining and assembly.

“In sum, we continue to favour the opportunity, as we look for demand trends to stay favourable moving forward, highlighting lagging impacts around replenishment and defence spending for many key programs that have yet to roll through,” Moore said.

Moore said Elmet should see material margin improvement over the next several years from a mix shift toward aerospace, defence and energy, along with operational improvements and volume leverage. Management sees a path to about 30% gross margin by 2030, compared with about 20% in fiscal 2025.

Elmet was recently awarded a $4.3-million U.S. Department of War contract to accelerate manufacturing capabilities for molybdenum components used in critical defence interceptor programs. Its Microwave Techniques business also secured a global licence for ARC Sentry Detection Technology from Brookhaven National Laboratory.

Moore said Elmet’s non-China tungsten supply position remains attractive, with a growing pipeline of potential strategic offtake relationships. He also sees M&A as a priority and expects possible opportunities across both the company’s Critical Materials and Components and Engineered Materials and Products divisions.

In Q1 2026, Elmet’s aerospace, defence and government revenue rose 27% year-over-year and accounted for more than 40% of total sales. Backlog increased 52% year-over-year to a record $113.3-million, with about 95% expected to ship this year.

Moore’s $21.00 target is based on about 18 times his fiscal 2027 Adjusted EBITDA estimate, or about 13 times his fiscal 2028 forecast.

“We view Elmet as a unique story around the reshoring of critical defense industrial supply chains, with growth potential and peer valuations both supporting future upside,” Moore said.

Moore expects Elmet to generate Adjusted EBITDA of $28.8-million on revenue of $235.0-million in fiscal 2026, improving to Adjusted EBITDA of $31.7-million on revenue of $260.8-million in fiscal 2027.

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