Veem's (ASX:VEE) return to "meaningful" growth is unlikely to happen until the second half of fiscal 2027, when material contributions from defense opportunities are anticipated, despite the company's guidance suggesting positive exit momentum for fiscal 2026, Euroz Hartleys said in a Wednesday note.
The company expects fiscal 2026 revenue of between AU$50 million and AU$52 million, and earnings before interest, taxes, depreciation, and amortization of AU$3.3 million to AU$3.8 million.
Trading has improved in the fiscal second half, with stronger defense activity, and a continued recovery in propulsion demand and deliveries to initial Veem Extreme customers, the financial services firm said.
The company also completed its factory extension construction, securing 1,000 square meters of additional manufacturing space.
Euroz Hartleys reaffirmed its speculative buy recommendation and AU$1 price target on Veem.
Veem's shares jumped nearly 3% in morning trade Thursday.