What were the primary factors behind the Q2 2025 performance compared to Q2 2024?

Fundamentals

CPI Aerostructures (CPI) posted a markedly stronger Q2 2025 versus Q2 2024, driven primarily by a sharp lift in aerospace contract activity and improved cost discipline. The six‑month update shows a 22 % YoY increase in net revenue, anchored by a new Tier‑1 OEM partnership that added $45 million of booked work in the quarter. Margins expanded as the company shifted higher‑margin structural‑assembly work into its product mix and trimmed lower‑margin repair‑shop services. The top‑line beat was reinforced by a lower inventory build‑up and a modest reduction in raw‑material costs (composite and aluminum) that helped contain COGS, while operating expenses held steady. The macro backdrop—stable defense spending and a rebound in commercial‑jet production—provided tailwinds, but the core catalyst was the execution of the new contract pipeline.

Technical & Market Dynamics

The earnings beat sparked a price‑action breakout: CPI cleared its 20‑day SMA and is now trading ~8 % above the prior high, with volume averaging 2.3× the 30‑day average—signalling strong buying interest. Relative Strength Index (RSI) has risen to 66, indicating bullish momentum without being overbought. The breakout coincides with a broader sector rally in aerospace and defense, which has held the 200‑day moving average as support. However, the stock remains under the Q2 2025 earnings‑adjusted 12‑month high, leaving room for upside on a retest of the $1.85 resistance level.

Trading Implications

• Short‑term: The momentum tailwind and solid fundamentals justify a buy‑on‑dip if the price pulls back to the 20‑day SMA (~$1.78). A bounce from that level could capture the next leg toward $1.95–$2.00.
• Medium‑term: Keep a stop‑loss just below the 20‑day SMA to protect against a potential sector pull‑back on broader risk‑off moves. If CPI holds above the 20‑day SMA and the 12‑month high, consider scaling in for a position targeting the $2.10–$2.20 range as the company ramps up its new contract pipeline through the year.