Thin analyst coverage usually reads as a warning. However, it can also mean pricing is less crowded and the research gaps widen. We devised a bespoke screener to uncover potentially under-the-radar defense stocks where there's little to know analysts keeping tabs.

Here are some of the companies that could be worth a closer inspection.

Sparc AI (CNSX:SPAI)

Overview: Sparc AI is an Australian software and electronics company that builds Overwatch, an AI powered platform that helps drones and other vehicles keep accurate positioning and targeting when GPS is jammed, spoofed or unavailable, using existing onboard sensors rather than expensive new hardware.

Market Cap: CA$76.21 million

Sparc AI gives you exposure to a very specific problem in modern defense: keeping drones and aircraft effective when GPS fails. Overwatch aims to deliver high margin, software based recurring revenue across defense fleets and potentially civilian uses. The company is still tiny, loss making and highly volatile, with an auditor flagging going concern risk and shareholders recently diluted to fund growth, so this is firmly in high risk territory. Yet partnerships in the UAE, India, Ukraine and with U.S. focused manufacturers, plus access to AUKUS licence free export channels, indicate commercial interest in its technology. For investors willing to weigh that trade off, the story behind Sparc AI goes much deeper than the headline GPS problem.

For a closer look at what sits behind the headline GPS problem, the most followed Simply Wall St Community Narrative on Sparc AI works through the fuller thesis. It covers how Overwatch uses software rather than costly hardware to keep drones navigating when GPS is jammed or spoofed, the roughly US$54 billion market the company is chasing, and a 95% estimated gross margin. 

Sparc AI’s Overwatch story is all about high stakes software leverage, but the real twist is whether that potential offsets the going concern flags and recent dilution, so study the 3 warning signs (3 are major!) that could flip this thesis on its head.

Preformed Line Products (PLPC)

Overview: Preformed Line Products designs and manufactures hardware and systems that keep power lines, fiber networks and other critical infrastructure supported, connected and protected, serving utilities and communications providers worldwide with products ranging from cable fittings to fiber closures and solar mounting solutions.

Operations: The company generates essentially all of its US$697.1 million revenue from wire and cable related products, with PLP USA contributing US$340.1 million and the rest spread across Asia Pacific, the Americas and EMEA.

Market Cap: US$1.60b

Preformed Line Products sits at the crossroads of electric grid, communications and data center build outs. This puts it in focus for investors looking at under the radar defense infrastructure. Forecast earnings growth of 21.01% a year and board and management experience contrast with a 46.4x P/E ratio, 7.2% ROE and a profit margin that has slipped to 4.9%. A recent US$11.7 million one off loss and reliance on external funding add extra financial risk. Index removals and share buybacks show how ownership is shifting, while regular dividends and exposure to grid modernization and AI linked network spending keep interest high for those weighing quality versus price.

Preformed Line Products sits at the intersection of grid, fiber and AI related build outs, yet its 46.4x P/E and 4.9% margin leave a lot of questions. Get the full picture with the 1 key reward and 1 important warning sign.

Gelion (AIM:GELN)

Overview: Gelion is a UK based battery company that develops and manufactures a range of storage technologies, including lithium sulfur, room temperature sodium sulfur, lithium ion and zinc hybrid cell batteries, alongside recycling technology and custom energy storage systems for uses from drones and e-aviation to heavy vehicles and grid scale storage.

Market Cap: £45.31 million

Gelion stands out in the under the radar defense space because it is building specialist battery chemistries for drones, e aviation and heavy vehicles while also targeting grid and reserve power markets, all from a small £3 million revenue base. Forecast revenue growth of 62.65% a year sits against continued losses, heavy reliance on external borrowing, share price volatility and recent dilution, so investors are being paid with potential rather than current profits. Partnerships with the U.S. National Laboratory of the Rockies, Nissan and Oxford University signal commercial interest in its Nano Encapsulated Sulfur technology and a push toward domestic supply chains that matter for defense buyers, but the funding structure and board independence questions mean you need to look closely at how that opportunity is balanced against risk.

Gelion’s fast growing revenue story and specialist battery focus look compelling, but the real tension is how that potential stacks up against funding pressure and governance questions. Walk through the 2 key rewards and 4 important warning signs.

The three stocks covered here are just a starting point. The full Under-the-radar Defense Stocks screener surfaces 7 more companies that pair mission critical roles with under followed, potentially mispriced stories across the defense supply chain in the Under-the-radar Defense Stocks screener. Use Simply Wall St to identify and analyze the exact catalysts, risk flags and narrative traits that matter to you so you can focus on the highest conviction under the radar defense ideas instead of sifting through the entire market on your own.

Take Control of Your Investment Journey

If Sparc AI or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Fresh Alternatives Before Others Notice

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Simply Wall St analyst Mitch Lawler and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.