NEW YORK (TheStreet) -- Shares of Giga-tronics (GIGA) are flying 157.66% to $2.86 on heavy trading volume after the instruments and microwave components maker earlier today announced a software licensing deal with Lockheed Martin Corp. (LMT).   

Under the terms of the agreement, Giga-tronics said it will develop and license threat simulation software as a commercial product that brings advanced threat environment simulation capability to its new Advanced Signal Generator Hardware Platform.

"This is a win for the Electronic Warfare community, Lockheed Martin and Giga-tronics," Giga-tronics VP of Marketing Mark Elo stated. "The threat generation software is built by a team that has a strong legacy of program support and brings many new capabilities in a Commercial Off the Shelf solution that is both ready as a turnkey bench solution or a scalable alternative for larger projects."

As of 2:00 p.m., more than 23 million shares had changed hands, above Giga-tronics' average trading volume of about 45,000 shares. 

Lockheed Martin stock is also advancing, up 0.29% to $219.79 on Tuesday afternoon.

Separately, TheStreet Ratings team rates GIGA-TRONICS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate GIGA-TRONICS INC (GIGA) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 42.0% when compared to the same quarter one year ago, falling from -$0.44 million to -$0.63 million.
  • Net operating cash flow has significantly decreased to -$0.49 million or 182.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of GIGA's shares over the past 12 months, there is not much good news to report: the stock is down 34.12%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, GIGA-TRONICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 41.19% is the gross profit margin for GIGA-TRONICS INC which we consider to be strong. Regardless of GIGA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GIGA's net profit margin of -14.37% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: GIGA