SpaceX’s record breaking US$2t IPO and heavy AI spending have just thrown a spotlight on aerospace and space technology stocks. The mix of fresh liquidity, staged share releases starting 6 August, and questions around profitability is creating cross currents that can affect related companies. This article walks through 3 stocks from our Aerospace & Space Technology screener that appear closely tied to this story so you can decide how, or if, they fit your watchlist.

The three stocks below are just a starting sample, since the full Aerospace & Space Technology screen surfaced 34 more companies with equally compelling narratives that are not covered here.

Identify and analyze your own high conviction ideas by going straight to the Aerospace & Space Technology screener.

Hammond Power Solutions (TSX:HPS.A)

Overview: Hammond Power Solutions designs and manufactures a wide range of transformers and power-quality equipment used in everything from renewable energy and EV charging to heavy industry and power grid infrastructure across North America and India.

Operations: Hammond Power Solutions generates about CA$1.1b in revenue from manufacturing and selling transformers, with most sales coming from the United States and Mexico at CA$805.9 million, followed by Canada at CA$221.7 million and India at CA$34.5 million.

Market Cap: CA$3.2b

Hammond Power Solutions operates at the intersection of electrification, data centers and aerospace-grade power systems, an area that has drawn additional attention following SpaceX’s IPO and increased AI-related spending. The company supplies transformers and related equipment into areas such as data centers, grid upgrades and industrial power infrastructure. Recent results indicate that rapid capacity expansion, acquisitions and higher input costs are affecting profit margins and funding requirements. Inclusion in the S&P/TSX Composite Index has increased Hammond Power Solutions’ visibility with institutional investors. For investors, the mix of growth projects, valuation expectations, insider selling and reliance on external funding presents a profile that includes both opportunities and risks and may warrant closer examination.

Hammond Power Solutions sits at the crossroads of electrification, data centers and aerospace grade power, yet the real story sits in the balance between growth projects, funding needs and insider moves. Get the full context in the 2 key rewards and 2 important warning signs

Build your own electrification and aerospace shortlist

Hammond Power Solutions and the two other stocks in this article all surfaced from a single screener, but the real edge comes when you shape your own filters. Use our flexible Screener to combine valuation, growth, balance sheet and risk checks around your thesis, or start with any of our curated Investing Ideas.

RADA Electronic Industries (RADA)

Overview: RADA Electronic Industries is a defense technology company that builds advanced avionics and tactical radar systems used in fighter jets, unmanned aircraft and ground based defense, including solutions for border surveillance, critical infrastructure protection and counter drone missions.

Market Cap: US$491 million

RADA Electronic Industries sits right in the slipstream of the SpaceX IPO story, because its advanced radar and avionics are tied to the same rise in satellite, defense and space infrastructure spending that investors are watching now. The company reported stronger than expected RF and avionics demand, a solid backlog and positive guidance, which together indicate clearer revenue visibility. Forecast earnings growth is high, yet the P/E multiple is already elevated and net margins have tightened from 19.5% to 5.3%, with all liabilities funded through external borrowing. For investors, the mix of high growth expectations, rich valuation, financial leverage and a 10 out of 10 exposure score to this SpaceX catalyst makes RADA a company that may warrant closer examination in this sector context.

RADA Electronic Industries sits at the crossroads of elevated growth expectations and a tight 5.3% net margin, with an already rich P/E that many investors may be underestimating. Get the full story and risk context in the 2 key rewards and 1 important warning sign

Avon Technologies (LSE:AVON)

Overview: Avon Technologies supplies respiratory, head and ballistic protection equipment for military and first responder customers, including masks, filters, escape hoods, helmets and related systems under the Avon Protection and Team Wendy brands in Europe and the United States.

Operations: Avon Technologies generates about $186.2 million in revenue from Avon Protection and $139.8 million from Team Wendy, with most sales recorded in the United States at $247.8 million.

Market Cap: £556 million

Avon Technologies gives you focused exposure to military and first responder protection at a time when the SpaceX IPO has sharpened interest in mission critical aerospace and space related hardware. A much larger order book, recent multi million dollar helmet and mask contracts with US and NATO customers, and management’s push to lift productivity and margins all point to a business that is working to convert strong demand into better profitability. The flip side is that gross margins are still pressured by the ACH 2 ramp up, transformation costs are expected to weigh through FY 2025, and funding relies on higher risk sources. For investors, the question is whether the quality of contracts and earnings justifies paying up for Avon Technologies in this sector.

Avon Technologies appears to be seeing orders and contracts finally catch up with its ambitions. Yet the real story is how future earnings compare with those pressures. See what the analyst forecasts for Avon Technologies reveals before the next twist.

Seeking Fresh Alternatives Before Momentum Flies

New themes can move quickly. The stocks showing quiet momentum today may be fully priced by the time the broader market notices. Consider scanning fresh ideas that are still under the radar and evaluating them promptly.

• Identify cash rich compounders before they gain wider attention by running the 12 high quality undervalued stocks so that pricing still reflects caution rather than full confidence.
• Explore potential secular trends in automation by searching the 36 robotics and automation stocks for curated companies that are already securing budget allocations as factories and warehouses upgrade.
• Monitor developments in energy and metals by checking the 28 best rare earth metal stocks while these critical suppliers may still be quietly priced.

This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.