Force Protection ( FRPT) should no longer feel a pressing need for speed.

The South Carolina-based defense contractor continues to blow past its production targets, manufacturing record numbers of mine-resistant ambush-protected vehicles. But with demand for MRAPs slowing, the company could wind up with some unwanted time on its hands.

Until last month, Force Protection expected to snag up to half of a multibillion-dollar military MRAP order that would keep it busy for a while. Instead, Navistar ( NAVZ) and BAE secured the bulk of that order.

Force Protection received a much smaller contract -- representing just 14% of the dollars spent -- that it must split with its larger partner, General Dynamics ( GD). The companies' joint venture, known as Force Dynamics, fielded a year-end order for just 358 MRAP vehicles.

The two companies produced almost that many MRAPs last month alone.

"Force Protection will be busy through the spring" filling past MRAP orders, Inside the Navy observed last week. But "unless one of the other vendors has difficulty meeting its commitment to deliver vehicles ordered by the Pentagon, it is not clear where sizable new Force Protection orders will come from."

The Marine Corps, which has long favored Force Protection's vehicles, feels that it has enough MRAPs already. The Army still plans to order some more MRAPs, unless it changes its mind in coming months, but it has shown a clear preference for vehicles supplied by Navistar and BAE.

Meanwhile, the U.S. military has also rejected Force Protection's new lightweight Cheetah as a candidate for its new MRAP II program.

This new reality -- once viewed as an unlikely worst-case scenario by some -- has caused even loyal Force Protection followers to lose their faith. Force Protection's stock, once a $30 highflier, fell by more than half in December, and currently sits near $5.

"We recognize we'll face criticism throwing in the towel at current levels," Collins Stewart analyst James McIlree admitted when downgrading Force Protection after last month's disappointing MRAP order. "But the reality is we wouldn't own this stock in our portfolio.

"So at best, it's not a buy. And given we think the stock in the short term is likely to trade at the $3.58 book value and possibly lower ... it should be sold."

Over the course of the past nine months, McIlree has slashed his price target on Force Protection by more than 90%, and now values the stock at less than $3 a share.

He's not alone. Of the five analysts who recommended buying Force Protection late last year, only one continues to embrace the former Wall Street darling.

Lonely Bull

SunTrust Robinson Humphrey analyst Chris Donaghey believes that Force Protection's stock can more than double over the course of the next year.

Granted, Donaghey has overestimated the company's potential before. A few weeks back, even Donaghey's "worst-case scenario" assumed stronger year-end demand for the company's flagship vehicles.

Now, Donaghey's outlook depends heavily on foreign orders and future acceptance of the company's new Cheetah.

"Clearly, the story is now 'show me,'" Donaghey said when keeping his buy recommendation on Force Protection last month. "But we continue to believe the recent price decline reflects an overly pessimistic view of the global MRAP market FRPT will be pursuing."

Donaghey values the stock at $14 a share. His firm has investment banking ties to the company.

While Donaghey stuck with Force Protection ahead of last month's MRAP order, a fellow bull risked investor outrage by downgrading the company and slashing his price target on the stock from $25 to $3 a share. That last-minute call, issued in a brief note by Friedman Billings Ramsey analyst Patrick McCarthy, wound up saving investors plenty in the end.

"Although this is speculative, we estimate that the majority of this week's MRAP awards will go to only two companies, and FRPT could potentially receive a smaller order than we had originally projected," cautioned McCarthy, whose firm makes a market in the company's securities. "More bad news could be on the way."

The Middlemen

Meanwhile, Dougherty analyst Joe Maxa is torn between the two extremes, with a neutral rating on the stock.

Once an outright bull, Maxa downgraded Force Protection last month due to the company's sharp decline in MRAP market share. Like many, Maxa had assumed that Force Protection's speedy delivery would translate into another big MRAP order, which failed to materialize.

While Force Protection "is the only manufacturer that has consistently beat delivery expectations, last month's order indicates MRAP participation is limited," wrote Maxa, whose firm makes a market in the company's stock. Meanwhile, the "Cheetah opportunity remains uncertain" as well.

Force Protection hopes to land orders for some 2,000 Cheetahs this year. But Maxa predicts that the company will sell less than one-third that number and -- with no Cheetahs ordered so far -- worries about even that modest projection.

"The Cheetah has not proven itself yet," he wrote. And "until we see progress (sales), we will continue to view this as a risk to our estimates."

Long-shot Winner

Last month, the U.S. military asked two competitors to supply test vehicles for the new MRAP II program.

In addition to established MRAP player BAE, a new team -- including Ceradyne ( CRDN), Oshkosh ( OSK) and privately held Ideal Innovations -- won a coveted MRAP II award. first highlighted the latter team's vehicle, known as the Bull, back when it was still considered a long-shot contender six months ago. Recently, however, the Bull scored the larger of the two test awards.

Now, some feel, both winners could go on to hog the entire program.

"MRAP program officials have no plans to tap additional companies beyond BAE and the Ideal team for MRAP II awards," Inside the Navy wrote last week. "That's because other companies that submitted proposals to be part of the MRAP II effort earlier this year did not pass testing and evaluation."

To be fair, the publication continued, the military could "in theory" order additional MRAP II prototypes from other companies. However, it said, those companies would have to resubmit an updated proposal and another test vehicle for a shot.

Ultimately, the newspaper concluded, each company will have to weigh the situation and reach its own "corporate decision" on the matter.

Decision Time

Apparently, Force Protection already has done so.

The company seemed to like its chances the first time around, with its CEO last month promising a positive Cheetah update in his next address to investors. Instead, when the government nixed the Cheetah a few days later, the company stopped short of declaring victory and assured that "its Cheetah vehicle proposal is in the competitive range for continued development and testing and will be further evaluated with modifications as part of the ongoing MRAP II competition."

Meanwhile, Force Protection continues to invest huge sums in Cheetah production with the expectation that orders will certainly follow. The company did not respond to questions for this story. However, in its message to investors last month, it portrayed those who criticize its ambitious strategy as "shortsighted" and sounded confident that it would prove itself right in the end.

Still, it has lost some loyal followers along the way.

"We have ... taken a hatchet to the estimates for MRAP and Cheetah" vehicles alike, McIlree declared last month. "To be profitable at lower revenue levels, operating expenses need to be slashed" as well.

Clearly, he concluded, "this will be painful for the company."

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