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Force Protection's


glory days as an industry superpower seem to be coming to an end.

After monopolizing its niche market in the past, Force Protection managed to secure just 14% of this week's $2.66 billion order for mine-resistant ambush-protected vehicles -- the government's last award for the year. Rivals


( NAVZ) and

BAE Systems

hoarded the rest of that order for themselves.

Early Wednesday, Force Protection's stock -- once a $30 highflier -- plummeted 34% to a 52-week low of $3.89 on the news. Even after regaining some ground, the stock was still sitting at $4.31 with a 27% loss by mid-morning.

Meanwhile, other opportunities now look like possible dead ends for Force Protection as well.

The company had hoped to see its new lightweight Cheetah selected as an MRAP II candidate before going on to become a possible Humvee replacement under the multibillion-dollar Joint Light Tactical Vehicle program. But the U.S. military has chosen a new


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team, along with BAE, to supply early test vehicles for the MRAP II program instead.

Force Protection could see its Cheetah become a tough sell under the JLTV program, too. Notably, Navistar and BAE have teamed up to design their own JLTV vehicle and, as the new MRAP powerhouses, will look to capitalize on their recent success to become the JLTV vendors of choice.

Certainly, for Force Protection, this week's news could hardly be worse.

"Given the Marines' and Army's stated intentions to reduce their MRAP requirements, this could be the last meaningful order placed for the vehicles," wrote Stephens analyst Tim Quillin, whose firm makes a market in Force Protection's stock and hopes to secure investment banking business from the company. Now, "the future of the company is heavily dependent on its new Cheetah vehicle. (And) unless the Cheetah is a rousing success, we believe the stock still has downside."

The first major analyst to warn about Force Protection's prospects, back when the company's stock fetched around $24 a share, Quillin continues to urge investors to sell, or even short, the shares.

Meanwhile, he has slashed his price target once again. He now has a 12-month target of $4 on the stock, down from $9 earlier, and warns that it could spiral to just $2 under a "realistic worst-case scenario."

Famous Last Words

Just last week, Force Protection CEO Gordon McGilton gave investors reason to hope for the best.

With the company's stock sliding below $5 a share, McGilton on Friday issued an upbeat statement touting Force Protection's future prospects. In that bullish press release, which fueled a 30% jump in the company's shares, McGilton portrayed Force Protection as a likely candidate for big MRAP awards and its Cheetah as an important breakthrough for the future.

Indeed, in his next update, McGilton vowed to discuss "how our newest production success -- (the) Cheetah -- will address future demand for the vehicles of Force Protection."

But McGilton simply delivered more promises instead. Rather than fielding actual calls for its Cheetah under MRAP II, as its competitors did, McGilton said that Force Protection simply heard that its vehicle remains "in the competitive range for continued development and testing and will be further evaluated with modifications as part of the ongoing MRAP II competition."

Quillin offered a far darker take.

The "MRAP II shutout (was) also a disappointment," he wrote. "Given the military's waning appetite for MRAPs, we are not sure the MRAP II vehicles will be in great demand.

"Nevertheless," he added, "an order would have been a critical validation of the Cheetah for FRPT."

Meanwhile, investors who bought Force Protection's stock on McGilton's positive comments have lost all of their fleeting gains. In contrast, short sellers -- who have watched the stock tumble 85% from its late-May peak -- continue to get rich.

Still, some loyal Force Protection followers continue to hold on to their faith. SunTrust Robinson Humphrey analyst Chris Donaghey sees plenty of reason for hope.

Granted, Donaghey confesses, Force Protection secured a smaller year-end MRAP order than some people had expected. But with that contract and a likely foreign order combined, he says, the company will enter 2008 with 70% of its projected full-year revenue already in backlog.

Looking ahead, Donaghey says, Force Protection can continue to count on foreign orders -- with generous margins -- to help the company's performance. Moreover, he predicts that Force Protection will secure orders for its "well-positioned" Cheetah despite a lack of contracts for the vehicle so far.

"We expect the stock to be weak again," Donaghey acknowledged on Wednesday. "Clearly the story is now 'show me.' But we continue to believe the recent price decline reflects an overly pessimistic view of the global MRAP market FRPT will be pursuing" down the road."

Donaghey, who has recommended Force Protection throughout its recent collapse, personally values the stock at $14 a share. His firm has investment banking ties to the company.

Donaghey has based his target on the assumption that Force Protection will deliver earnings of $1.26 in 2008 and even more in 2009. But Quillin sees the company's profits plummeting instead. Specifically, he projects that Force Protection will post earnings of just 34 cents a share -- and possibly half that much -- in 2009.

"We continue to believe that disappointments could emerge regarding its market opportunities, market share and margins," Quillin repeated on Wednesday. Moreover, "it looks increasingly likely that FRPT's role in the MRAP program could end abruptly" going forward.