The aerospace and defence industry was beset with supply chain issues and production shortages in 2024. However, those same headwinds are tailwinds this year. Global professional services network Deloitte believes that industry players will benefit from increased defence spending due to geopolitical tensions as well as hard technology growth.
Firan Technology Group (TSX:FTG) is the best deal today. Given the company’s strong foundation for future growth, a $1,000 investment could grow 10-fold. This TSX small-cap stock has displayed resiliency in 2025 amid an escalating tariff war. At its current price of $8.79, the year-to-date gain and trailing one-year price return are +20.58% and +65.54%, respectively.
Ultimate goal
The $215.48 million technology company designs, develops, prototypes, and manufactures solutions for aerospace and defence electronic products and subsystems. Its core business is the printed circuit board (PCB), where you mount computer chips.
Management’s ultimate goal is to become the dominant player in the PCB industry. The PCB market’s growth catalysts are the emergence of electric vehicles (EVs) and ever-increasing demand for advanced technology. The global aerospace and defence market could grow from US$3.6 billion in 2024 to US$5.6 billion by 2032 (5.6% compound annual growth rate).
Operating units
FTG Circuits and FTG Aerospace are the two operating units. The first manufactures high-technology, high-reliability PCBs standard rigid products, high-density interconnect, RF circuitry, Thermal management, Rigid-flex and assembly. The second unit designs and manufactures high-reliability, high-quality Avionic sub-system hardware. Its lead products are flight and simulated devices for use in commercial and defence platforms.
Besides the eight sites in North America (five in the U.S. and three in Canada), FTG operates in China (two sites) and is constructing one in India. Total sales have grown by around 80% in the last three years, from $90 million in 2022 to $162 million last year. In addition to the anticipated market/industry growth, other growth drivers include new programs, new technologies, and new acquisitions.
Management’s wish list is a 15% annual compounded growth, doubling Firan’s growth every five years through organic growth and acquisitions. FTG expects the strategic investments to enhance shareholder returns in the near and long term.
Financial performance
“Our first quarter was a great start to 2025,” said Brad Bourne, president and chief executive officer of FTG. “We are seeing strong end market demand and the current situation from tariffs levied by the U.S. does not appear to have any direct impact on us.” In the first quarter (Q1) 2025, sales grew 22.6% to $42.87 million versus Q1 2024. Notably, adjusted net earnings soared 213.7% year over year to $3.29 million.
“All metrics in the quarter were positive, from bookings to sales to margins to net income and cash flow, showing that our investments in technology, operational performance and our acquisitions are all helping to position us for success,” Bourne added. For 2024, Firan reported revenue growth in each quarter.
Full coverage
Bourne said FTG is not growing for the sake of growth. It commits to participating in all aerospace market segments, including air transport, business jets, general aviation, helicopters and simulators. It will also remain laser-focused on the defence market segments. You’re seeing the TSX’s next high-growth stock.
