$EOS.AX is one of my highest conviction positions and one of the largest holdings in my entire portfolio.
Here is a full deep dive on why.
Buckle up.
Most people have never heard of this company. That is exactly the point.
The Origin Story
EOS was founded in 1983 as a partner to Reagan's Strategic Defense Initiative. Star Wars. Laser weapons to destroy missiles from the ground. When that program ended they pivoted to terrestrial defense. Remote weapon systems. Counter drone. High energy lasers.
The foundational IP developed over 40 years of government funded research is irreplaceable and carried at near zero on the balance sheet.
By 2022 the stock was under A$1. Decades of world leading technology trapped inside a company that could not sell it. The founder stepped aside. The company was effectively on death's door.
Then everything changed.
The CEO — The Most Important Thing About This Company
Dr. Andreas Schwer took over as CEO in August 2022.
This is where the comparisons to my other highest conviction positions get interesting.
Arkady Volozh lost everything to Putin sanctions and rebuilt $NBIS from zero. He landed $META, $MSFT, and $NVDA as customers within two years. Abel Avellan built $ASTS from scratch, owns 78 million shares, and has never sold a single one. These are the kinds of people who build generational companies.
Dr. Schwer belongs in that conversation.
PhD in aerospace engineering from Stuttgart, Delft, and ESA. 14 years at Airbus in VP roles. Then Rheinmetall board member, CEO of the Combat Systems Division across 16 countries with 7,000 staff, Chairman of Rheinmetall International. Then he left to become the first CEO of Saudi Arabia's national defense champion SAMI. Built it from zero to a multi-billion dollar company.
Then he looked at EOS, a struggling A$120M Australian company with world class technology nobody was commercializing, and said he wanted to build something of his own.
His compensation structure tells you everything about his alignment. 75% performance based equity. Options only vest if EOS stock outperforms the ASX 200 index by 200%. He does not make a cent unless long-term shareholders make serious money first. No private jets. No lavish spending. An operator through and through.
His quote on competing with Rheinmetall's own laser program against the German government: "We offer double the performance for half the price in half the time."
That is not marketing. That is a man who built Rheinmetall's weapons division telling you exactly what he thinks of his former employer's offering.
The Turnaround Numbers
When Schwer took over in August 2022:
Stock: A$0.80
Market cap: A$120M
Order book: A$50M
Gross margins: ~30%
Balance sheet: debt-laden
Today:
Stock: A$9.20
Market cap: A$1.78B
Unconditional backlog: A$459M (+818%)
Gross margins: 63%
Cash: A$128M. Repaid all toxic debt.
18 contracts worth A$424M signed in FY2025 alone
World's first 100kW laser export contract ever signed
FY2026 revenue guidance: A$180-230M, up 40-79% from last year.
That is what one exceptional CEO does in three years with world-class technology.
What EOS Actually Does
EOS makes two categories of products that are converging into one complete defense platform.
Remote Weapon Systems stabilized gun platforms that mount on armored vehicles and ships. Automated targeting, fire control, all weather operation.
Customers include the US Army, General Dynamics, Northrop Grumman, and militaries across NATO and the Indo Pacific.
High Energy Laser Weapons, the APOLLO system. 30kW, 50kW, and now 100kW variants. Counter drone, counter rocket, counter mortar. $1-10 in electricity per shot. Unlimited magazine. Neutralizes a target in 1.3 seconds. Detection range over 12km.
EOS has never lost a single live fire comparison test in company history. Not against Israel. Not against the US. Not against anyone. Ever.
In the US Army's most watched C-UAS trial in April 2025 EOS won by a large margin. The British government then told its own domestic competitor to go seek a licensing deal with EOS rather than compete.
Why EOS Destroys The Competition
$LASR nLIGHT is the name people compare to EOS.
Here is why that comparison does not hold up.
nLIGHT makes fiber laser components. They are a supplier to defense primes. They do not make finished weapon systems. They do not have fire control. They do not have targeting. They cannot export an integrated weapons platform. They are an ingredient company.
EOS is a full systems integrator. They own the laser. They own the fire control. They own the targeting radar. They own the software. They can tech transfer and localize production in the customer's country.
That is the critical difference. $NOC Northrop Grumman, $LMT Lockheed, and $RTX Raytheon cannot do this because they are ITAR restricted. They cannot transfer the technology to a foreign government's domestic production. EOS can. That is a moat that cannot be replicated by US defense primes.
DroneShield $DRO.AX is the other Australian comparison. Does soft kill electronic warfare RF jamming. Trades at A$3.55B on A$217M revenue at roughly 16x. Soft kill is increasingly ineffective as military drones get frequency hopping and GPS independent guidance. EOS does hard kill. The drone does not survive. No comparison on lethality. EOS trades at roughly 7-8x revenue with dramatically better technology, better margins, and a larger pipeline.
The Contracts The Market Is Mispricing
The Abrams contract with General Dynamics is being priced as a one-off $22 million deal. Schwer said on the earnings call it is "only the very first slice of something which will become very, very big, up to $3 billion over 15 years."
This is platform lock-in on America's main battle tank. Every Abrams in service globally is a potential customer. The market is pricing it as a single contract.
The Netherlands A$125M laser contract is the world's first 100kW export deal in history. ITAR-free. The Netherlands signed because they could not get this technology from a US company. Every NATO nation watching that contract is a potential follow-on customer.
The LAND 400-3 RWS contract in Australia is A$108M. Platform lock-in on Australia's next generation infantry fighting vehicle. Multi-decade relationship.
The Three Catalysts The Market Has Not Priced At All
The 300kW laser. Under active negotiation. Fully customer-funded development meaning EOS takes zero capital risk on the next generation product.
At 300kW the system moves from counter-drone into counter-rocket, artillery, and mortar. The C-RAM market is roughly 10x the counter-drone market. EOS has plans for up to 100 systems at roughly A$100M each. That is A$10 billion in laser revenue potential from a single product upgrade.
MARSS acquisition closing mid 2026. Adds NiDAR AI-enabled command and control software. This transforms EOS from a hardware supplier into a full prime contractor. Pre MARSS they sell subsystems at A$1-5M per unit. Post MARSS they bid on complete integrated defense programs at A$20-100M+ each. Completely different revenue scale and margin profile.
Space warfare. EOS was literally born from Reagan's Star Wars SDI program. Their ground based laser systems can blind, damage, or destroy adversary satellites in low earth orbit. They are the only company outside the US that can do this.
The US Golden Dome program has a $175B budget. Europe is increasingly focused on space domain awareness. The market assigns this capability exactly zero dollars of value in the current stock price.
The Pipeline
A$10B+ total sales pipeline. Active conversations with basically every NATO member. CEO says the Korea 100kW conditional contract worth US$80M is on track to convert to unconditional in Q2 2026. First India sale announced March 2026 a new market entirely. Singapore factory open and operational.
European listing described by management as "very likely" within a year which would unlock institutional European defense capital that currently cannot access ASX-listed stock.
The Valuation Gap
$EOS.AX trades at roughly 7-8x forward revenue with 63% gross margins, a A$10B pipeline, and the most lethal counter-drone laser on earth.
Rheinmetall trades at 16x revenue. Hensoldt trades at 14x. Leonardo trades at 12x. These are European defense primes with far lower margins and no directed energy weapons capability.
If EOS re-rates to 12x revenue on FY2027 estimates the market cap is north of A$5 billion. That is a 3x from here. If the 300kW laser converts and the European listing happens the re-rating argument becomes significantly more powerful.
A$1.78 billion market cap. The CEO who built Saudi Arabia's entire defense industry. The world's most lethal counter-drone laser. Never lost a live-fire test. ITAR-free. Platform locked into the US Army's main battle tank. 63% gross margins. A$10B pipeline.
I am so excited for the future of this stock.
