Equity Research Analysis: KWESST Micro Systems Inc. (DFSC)
|Blank Capital Research Unit|Spot: $1.88
Price$1.88
Composite Score40.7/100
RatingREDUCE (2★)
Rank#3457 OF 7,333
Market Cap$0
IMPORTANT DISCLAIMER: Blank Capital Research ("BCR") is a technology platform, not a registered investment advisor or broker-dealer. The algorithmically generated signals, scores, and rankings provided on this site ("God Mode" Signals) are for informational and research purposes only and do not constitute financial advice, investment recommendations, or an offer to sell or solicit an offer to buy any securities.
HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
RISK OF LOSS: Trading in financial markets involves a high degree of risk and may result in the loss of your entire investment. Data provided by third-party sources (Intrinio, Snowflake) is believed to be reliable but is not guaranteed for accuracy or completeness. Past performance is not indicative of future results.
© 2026 Blank Capital Research. All rights reserved. System Version: Aegis V8 (God Mode).
Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3457
Positioning
Market Dominance
Services
Computer Software
$0
N/A
KWESST Micro Systems Inc. develops and commercializes next-generation technology solutions that deliver a tactical advantage for military, public safety agencies and personal defense markets. We are a corporation domiciled in Canada and were incorporated under the Business Corporations Act (British Columbia) (the "BCBCA") on November 28, 2017. Our registered and head office is located at 2900 - 550 Burrard Street, Vancouver, British Columbia V6C 0A3 and our principal place of business is located at 155 Terence Matthews Crescent, Unit #1, Ottawa, Ontario, Canada.
Headcount
20
HQ Base
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = DFSC ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 17.1% | 10.3% | 35.5% | 14.6% | 10.1% | 105.2% | 0.0% | 41.0x | $244M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.1% | 8.3% | 45.7% | 8.5% | 6.2% | 28.1% | 0.0% | 0.0x | $736M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 0.0% | - | 97.4% | 58.0% | 37.4% | - | 8.8% | 264.0x | $2.5B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 15.3% | 5.8% | 100.0% | 6.9% | 5.2% | 15.1% | 0.0% | 24.0x | $1.8B | VS | |
$DFSC KWESST Micro Systems Inc. | 41 | 35 | 21 | 56 | - | - | -493.6% | -298.0% | 35.2% | -183.7% | -194.8% | - | - | 14.0x | $0 | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.7% | 2.4% | 64.6% | 4.5% | 2.8% | 8.6% | 0.0% | 0.3x | - | REF |
KWESST Micro Systems Inc. (DFSC) receives a "Reduce" rating with a composite score of 40.7/100. It ranks #3457 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
Sign in to join the discussion.
Pending Verification
In-line with peers — no strong momentum signal
Expensive relative to fundamentals — limited margin of safety
Weak fundamentals — higher risk of value trap
High volatility — wider range of outcomes increases timing risk
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for DFSC.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 35 | 25 | +10ALPHA |
| MOMENTUM | 56 | 58 | -2NEUTRAL |
| VALUATION | 21 | 11 | +10ALPHA |
| INVESTMENT | 29 | 30 | -1NEUTRAL |
| STABILITY | 8 | 3 | +5NEUTRAL |
| SHORT INT | 88 | 96 | -8DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy -493.6% (sector 5.7%)
GM 35% vs sector 65%, OM -184% vs sector 5%
Capital turnover N/A, R&D intensity 47.9%
Rev growth N/A, 4yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate KWESST Micro Systems Inc. (DFSC) as a Reduce with a composite score of 40.7/100 at a current price of $1.88. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
KWESST Micro Systems Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 40.7/100 places it at rank #3457 in our full universe.
No Moat
Very High
Poor
Fair Value
Stable competitive position in a defensive sector.
Below-average quality raises earnings sustainability concerns.
Vulnerability to macroeconomic shocks and interest rate volatility.
KWESST Micro Systems Inc. represents a reduce based on multi-factor quantitative performance.
KWESST Micro Systems Inc. receives a Reduce rating from our analysis, with a composite score of 40.7/100 and 2 out of 5 stars, ranking #3457 out of 7,333 stocks. DFSC's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
DFSC's quality score of 35/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -493.6% (sector avg: 5.7%), gross margins of 35.2% (sector avg: 64.6%), net margins of -194.8% (sector avg: 2.8%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
DFSC registers a value score of just 21/100, suggesting the stock trades at a significant premium to its fundamental metrics. Key valuation metrics include a P/B ratio of 0.67x. High-premium valuations like this require strong future execution to avoid multiple compression, and downside risk is elevated if growth disappoints.
KWESST Micro Systems Inc.'s investment score of 29/100 suggests limited reinvestment activity. Key growth metrics include a return on assets of -298.0% (sector: 2.4%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
DFSC demonstrates moderate momentum with a score of 56/100, suggesting a neutral price trend without strong directional conviction. Revenue growth data is not currently available, while a beta of 16.09 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
KWESST Micro Systems Inc. registers a low stability score of 8/100, indicating high volatility and potentially stressed financial conditions. Key stability metrics include a beta of 16.09 and a debt-to-equity ratio of 14.00x (sector avg: 0.3x). Stocks at this level carry elevated capital loss risk and may be unsuitable for conservative portfolios without careful risk management.
DFSC's short interest factor score of 88/100 indicates very low short selling activity relative to peers — a positive signal suggesting institutional investors see limited near-term downside. Specific risk factors include high market sensitivity (beta: 16.09), elevated leverage (D/E: 14.00x), micro-cap liquidity risk. As a micro-cap company with a market capitalization of $0, KWESST Micro Systems Inc. benefits from the generally lower volatility and deeper liquidity associated with its size class.
KWESST Micro Systems Inc. is a micro-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #3457 of 7,333 overall (53rd percentile). Key comparisons include ROE of -493.6% trailing the 5.7% sector median and operating margins of -183.7% below the 4.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While DFSC currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Services Alpha →Quant Factor Profile
Upgrade catalyst
Improvement in Stability (8) would have the largest impact on the composite score.
ROE 8699% BELOW SECTOR MEDIAN
Gross Margin 46% BELOW SECTOR MEDIAN
Op. Margin 4183% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
Revenue up 47% over Q1 Fiscal 2025, with continuing momentum post quarter-end;Annualized program billings on go-forward basis reaches approximately $9.01 million in February 2026 with additional near term growth to approximately $9.92 million;First Lightning SaaS subscription received.Ottawa, Ontario--(Newsfile Corp. - February 12, 2026) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCSW) (FSE: 62UA) ("DEFSEC" or the "Company") is pleased to announce the...
Ottawa, Ontario--(Newsfile Corp. - January 30, 2026) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) ("DEFSEC" or the "Company") announces that it has voluntarily filed restated unaudited condensed consolidated interim financial statements for the three and nine months ended June 30, 2025 and 2024 (the "Restated Interim Financial Statements") and related management's discussion and analysis of financial condition and results of operations for the three...
Ottawa, Ontario--(Newsfile Corp. - January 23, 2026) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW)("DEFSEC" or the "Company") is pleased to announce that it has augmented its board team with a strong new appointment.Niel Marotta has been appointed as a member of the board, effective January 23, 2026. He brings extensive capital markets experience with emerging companies, and currently serves as Chief Executive Officer of Sun Summit Minerals Corp. (TSXV:
Ottawa, Ontario--(Newsfile Corp. - February 23, 2026) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) ("DEFSEC" or the "Company") today announced the results of its 2026 Annual and Special Meeting of shareholders held on Thursday, February 19, 2026.Shareholders approved all the resolutions detailed in the amended and restated management information circular of the Company dated January 14, 2026, namely:To set the number of Directors at seven;Electing all.
Elisabeth Preston appointed Senior Vice President and Chief Legal OfficerOttawa, Ontario--(Newsfile Corp. - February 2, 2026) - DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) ("DEFSEC" or the "Company") is pleased to announce today that it has appointed Elisabeth Preston as Senior Vice-President and Chief Legal Officer. "Elisabeth brings an impressive range of private and public company defence and security experience, including cross-border U.S.-Canada...