Valued at a market cap of $511 million, NanoXplore (TSX:GRA) manufactures and supplies graphene powder for industrial use in Australia. It offers graphene-based solutions, including GrapheneBlack powder and graphene-enhanced masterbatch pellets.
NanoXplore also provides standard and custom graphene-enhanced plastic and composite products to customers in transportation, packaging, electronics, and other industrial sectors. In addition, the company offers silicon-graphene-enhanced Li-ion batteries for the electric vehicle and grid storage markets.
The TSX stock went public in late 2017 and has since returned 126% to shareholders. Despite these steady gains, GRA stock also trades 60% below all-time highs, allowing you to buy the dip.
Is the TSX stock a good buy right now?
In the fiscal third quarter (Q3) of 2025 (ended in March), NanoXplore reported revenue of $30.4 million, down from $33.9 million in the year-ago period. The revenue decline was attributed to lower progress revenue recognition on new tooling projects and reduced volumes from the company’s two largest customers, which reflects broader uncertainty in the commercial vehicle market.
Despite revenue headwinds, NanoXplore increased adjusted gross margins to 22.4%, up 150 basis points year over year. This margin expansion represents the 11th consecutive quarter of improvement, driven by manufacturing efficiency initiatives, foreign exchange benefits from a stronger U.S. dollar, and higher sales of graphene powder.
Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) increased to $1.4 million from $572,000 in the prior year, with improvement in the Battery Cells and Materials segment, which turned positive at $102,000 compared to a $688,000 loss last year.
The company’s strategic expansion continues despite near-term challenges. The North Carolina facility expansion is progressing well, with revenue contribution expected to begin by the end of fiscal Q1 of 2027.
This expansion is supported by booked contracts and is expected to generate over $10 million annually from newly awarded programs. However, delays in customer program launches have prompted management to revise fiscal 2025 revenue guidance to approximately $130 million, matching fiscal 2024 levels.
NanoXplore’s graphene commercialization efforts show promising momentum. The company is nearing commercial rollout with an insulation foam customer, expecting implementation during summer 2025, while a drilling fluid customer continues testing across various U.S. locations.
Both applications represent substantial market opportunities, with drilling fluid requiring two to four tons of graphene per well and insulation foam potentially reaching 1,000 tons at maturity for a single customer.
The company ordered equipment for dry process graphene production within its Thimens facility, with capacity between 500 and 1,000 tons annually, expected to begin production in 2026.
Is the TSX stock undervalued?
NanoXplore maintains a strong balance sheet with $20.7 million in cash and $30.7 million in total liquidity, positioning it well for future growth as market conditions stabilize.
Analysts tracking the TSX stock estimate revenue to increase from $130 million in fiscal 2024 to $300 million in fiscal 2028. Meanwhile, free cash flow is forecast to improve to $35 million in fiscal 2028, compared to an outflow of $6 million in fiscal 2025.
If NanoXplore stock is priced at 30 times forward free cash flow, it could surge roughly 100% over the next 18 months. It means a $500 investment in this TSX stock would be worth $1,000 by the end of 2027.
