By Al Root
There is a new aerospace and defense company -- with an emphasis on space -- for investors to follow.
Shares of Applied Aerospace & Defense began trading Wednesday under the symbol "AADX."
The company said Tuesday it had priced its initial public offering at $20 a share, raising about $750 million, if underwriters exercise their option for additional shares.
Shares traded as high as $20.95, but closed at $19.01, down 5%, while the S&P 500 was down 0.6%. That isn't the hoped-for post-IPO pop.
It might have been a bad day to start trading. SpaceX is pricing its IPO at about $135 per share, valuing the company at about $1.75 trillion. That massive number, though, is a small disappointment. Investors thought the valuation could top $2 trillion.
The IPO for Applied Aerospace, which is a SpaceX supplier, valued the company at about $3.5 billion, or about six times 2025 pro forma sales of $604 million. Applied wasn't profitable in 2025. It reported a first-quarter operating loss of $57 million.
It does generate positive earnings before interest, taxes, depreciation, and amortization, or Ebitda. Adjusted pro forma Ebitda was $142 million in 2025 and $28.7 million in the first quarter.
There is growth. First-quarter sales rose almost 40% year over year.
Applied Aerospace is a midtier supplier for the aerospace and defense industry. It builds hardware for space launch, including propellant tanks. It also makes hardware for SpaceX's Falcon 9 reusable rocket. Applied supplies components for aircraft that don't go into orbit, including drones, as well as parts for solid-rocket motors that power missiles.
Space, missiles, and drones: That list checks off a lot of themes for investors these days. Space stocks have been on fire in the month leading up to the SpaceX IPO. Elon Musk's rocket company essentially created the modern space economy, and its record-setting IPO should wrap up this coming week. A look at other space stocks shows the SpaceX domino effect: Rocket Lab shares have risen more than 55% over the past month.
Drones have also been on investors' minds since fighting broke out in Iran. The U.S. military has scrambled for counter-drone solutions that don't require firing a million-dollar missile at a $10,000 drone.
The world will use more drones in the future, and there will be many more space launches. Both are good things for Applied's business, which focuses more on higher-end autonomous systems, made by the likes of Anduril.
The company is based in Huntsville, Ala., and is led by James "Trip" Ferguson. Before taking the reins at Applied, Ferguson led the Space, Cyber, and Directed Energy (think lasers) business at AeroVironment.
The new company was built through a series of combinations that brought together different space and defense businesses under one roof.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 03, 2026 16:23 ET (20:23 GMT)
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