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Analyst Ratings February 23, 2026

Baird Begins Coverage of York Space Systems, Assigns Outperform and $40 Target

Analyst sets valuation using 23x 2028 EBITDA; stock trades well below target but InvestingPro flags possible overvaluation

By Caleb Monroe
Baird Begins Coverage of York Space Systems, Assigns Outperform and $40 Target

Baird has initiated coverage of York Space Systems (YSS) with an outperform rating and a $40.00 price target. At the prevailing share price of $25.91, Baird’s target implies roughly 54% upside. The firm anchored its target on a 23x multiple of York’s projected 2028 EBITDA. York reports $357.5 million in trailing twelve-month revenue, a market capitalization of $3.29 billion, a gross margin of 19.6% in the most recent period and negative EBITDA of $12.1 million. Baird highlighted the company’s software-defined spacecraft focus for national security missions, efficiency advantages versus peers and the expected growth and margin expansion of right-of-launch software revenues starting in 2028. InvestingPro analysis, however, signals the stock may be overvalued relative to its Fair Value estimate.

Key Points

  • Baird initiated coverage of York Space Systems with an outperform rating and a $40.00 price target, implying about 54% upside from the current $25.91 share price.
  • The $40 target is based on a 23x multiple applied to York’s 2028 EBITDA estimate; the company reports $357.5 million in trailing twelve-month revenue and negative EBITDA of $12.1 million.
  • York is positioned as a provider of software-defined spacecraft for national security missions, with Baird noting the company operates 20% faster than peers and at over 50% lower cost; right-of-launch software revenues are expected to rise in 2028 and beyond.

Baird has opened coverage on York Space Systems with an outperform rating and a $40.00 price objective. With the shares trading at $25.91, Baird’s recommendation corresponds to an implied upside of roughly 54% to that target. Separately, InvestingPro’s analysis indicates the stock may be overvalued when measured against its Fair Value estimate.

The $40.00 price target reflects Baird’s application of a 23-times multiple to York’s estimated 2028 EBITDA. According to the figures provided in the coverage note, York Space Systems carries a market capitalization of $3.29 billion and produced $357.5 million of revenue over the last twelve months. The company remains unprofitable on an EBITDA basis, recording negative EBITDA of $12.1 million for the most recent period.

Baird’s research characterizes York as a supplier of software-defined spacecraft tailored to national security missions. The firm cites operational advantages, saying York operates approximately 20% faster than its peers and at more than 50% lower cost relative to competitors. In the most recently reported period the company posted a gross profit margin of 19.6%.

The analyst firm also expects right-of-launch software revenues to grow in 2028 and beyond and to carry higher margins as York’s satellite installed base expands. The coverage note indicates that roughly 99% of the company’s revenue is derived from the PWSA Transport Layer.

On competitive risk factors, Baird expressed the view that concerns around SpaceX and MILNET substituting for the PWSA Transport Layer are unlikely to materialize. That statement reflects the firm’s assessment of the durability of York’s revenue source tied to the Transport Layer.

This analyst initiation and the underlying valuation assumptions provide investors with a clear bullish case from Baird based on a projected 2028 earnings multiple and expected software margin expansion. At the same time, external valuation analysis referenced in market commentary raises questions about whether current share prices fully reflect fair value estimates.

Risks

  • High revenue concentration - approximately 99% of York’s revenue comes from the PWSA Transport Layer, creating dependency risk for the aerospace and defense revenue stream.
  • Valuation uncertainty - InvestingPro’s Fair Value analysis suggests the stock may be overvalued relative to current market pricing, presenting downside risk for investors.
  • Profitability gap - York reported negative EBITDA of $12.1 million despite $357.5 million in trailing revenue, highlighting operating profitability and margin risks in scaling the business.

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