OSS Stock Extends Rally To Third Day As Defense Contracts, $22M Divestiture Drive Profitability, Record Margins

• One Stop Systems reported a net profit for the second quarter in a row, while Q4 sales jumped 70%.
• The company divested its industrial hardware distribution and integration business, Bressner Technology, in the quarter.
• Retail sentiment for OSS on Stocktwits turned ‘bullish.’

One Stop Systems (OSS) extended its rally on Wednesday, climbing 5% after posting a profit and record margins, underscoring that its pivot toward the defense market is paying off. OSS shares gained 0.4% in overnight trading.

One Stop Systems, which specializes in rugged GPU servers and flash storage systems built for battlefield environments, has recently come onto investors’ radar as the U.S. conflict with Iran and heightened military activity in regions such as Venezuela drive renewed interest in defense-linked suppliers.

The company’s hardware is used in combat vehicles, naval systems, and sensor-processing platforms.

“We are seeing robust demand across our defense and commercial markets... Our defense and national security opportunities continue to grow as our ruggedized AI compute platforms gain traction across additional military programs and autonomous systems." CEO Mike Knowles said in a statement.

OSS Reports Second Profitable Quarter

One Stop Systems’ fourth-quarter revenue surged 70% to $12 million, according to results published on Wednesday. It posted a net profit of $2 million, compared to a net loss of $3.4 million in the year-ago quarter, while gross margins increased to a record 49.6% from 2.5%.

In the quarter, the company sold off its industrial hardware distribution and integration business, Bressner Technology. 

“We believe these results capped off a transformative year and enabled the opportunistic $22.4 million sale of Bressner in December, which helped to streamline our business, strengthen our balance sheet, and allow us to focus on higher-margin, higher-growth opportunities within our core-rugged Enterprise-Class compute markets,” Knowles said.

Retail View On OSS

On Stocktwits, retail sentiment for OSS shifted to ‘bullish’ from ‘neutral,’ with an over 230% rise in 24-hour message volume. 

Some users, however, expressed concern that the stock is susceptible to manipulation from large investors given its low float. Meanwhile, Alliance Global raised its price target on the stock to $13 from $9, and kept a ‘Buy’ rating. 

Last month, One Stop Systems bagged $10.5 worth of contracts from the U.S. Navy and a major U.S.-based defense contractor, and drove shares higher. The stock is up 57% year to date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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