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Force Protection

(FRPT) - Get Freshpet Inc. Report

may need to slam on its brakes.

Right now, the company is rushing to increase its production capacity -- and calling for extra funding -- in anticipation of huge orders for its popular mine-resistant ambush-protected vehicles. However, based on recent news reports, the U.S. Marine Corps has started questioning the long-term value of MRAPs and has decided to place smaller orders for the vehicles instead.

"Can I give a satisfactory answer to what we're going to be doing with those things in five or 10 years? Probably not," Marine Commandant Gen. T. James Conway stated in a story published by the

Associated Press

early Friday. "Wrap them in shrink wrap and put them in asphalt somewhere is about the best thing that we can decide at this point. And as expensive as they are, that is probably not a good use of taxpayers' money."

Thus, the


reported, the Marines will likely slash the planned MRAP order from 3,700 vehicles to just 2,400 vehicles going forward.

Force Protection, which makes nothing but MRAP vehicles, spiraled 20% to $11.95 on the news. The company's stock now rests at its lowest point of the year.

Friday's drop proved even steeper than some company bulls had feared.

"Mathematically -- and given the volatility in the name -- we believe a one-third cut to the USMC MRAP buy would negatively impact FRPT by approximately 14%," Friedman Billings Ramsey analyst Patrick McCarthy wrote early Friday. "Additionally, it brings into question the Army's plans for the program as well."

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For now, McCarthy has maintained his outperform rating and $25 price target on Force Protection's stock. Given the


report, however, total U.S. demand for MRAPs -- once estimated at 23,000 to 25,000 vehicles -- looks questionable.

The bombshell ranks as one of the heaviest dropped on Force Protection so far. Early on, Force Protection monopolized the MRAP program and looked well-positioned to capitalize on its expected explosive growth. Soon, however, larger competitors, such as


( NAVZ) and


, entered the MRAP race and cut into Force Protection's market share. Recently, in fact, Navistar has been landing even bigger orders than Force Protection has itself.

Force Protection's stock clearly reflects that shift. The shares peaked above $30 in late May, when Force Protection still dominated the MRAP program, but have weathered a series of steep plunges since that time. The volatile stock was showing sings of recovery when the latest news hit.

Still, some experts had started

backing away from the stock even before this week's plunge. Earlier this month, Thomas Weisel Partners analyst David Gremmels downgraded Force Protection over concerns about demand for the company's vehicles and the funding needed to build them. Previously a loyal bull, he now has a market-weight rating on the company's stock. His firm makes a market in the securities.

Before Gremmels' downgrade, however, Stephens analyst Tim Quillin stepped forward with the most

bearish call of all. Quillin's firm hopes to secure investment banking business from Force Protection and makes a market in the company's securities.

A "great truck does not equal a great stock," Quillin cautioned in mid-October. "We would sell/short shares of Force Protection, as we believe it is priced for a near best-case scenario."

Since Quillin first initiated coverage of Force Protection last month, the stock has lost fully half of its value. Even Quillin expected a smaller hit. He predicted that the stock might drop to $14 -- with $11 viewed as a worst-case scenario -- over the course of the next year.