Eltek (ELTK) Stock Flies On Government Order

Eltek Ltd ELTK Stock News

Eltek Ltd. (NASDAQ: ELTK) is flying in the market this morning, trading on gains of around 15% early on. The gains come after the company issued a press release surrounding a new order from a governmental authority. Here’s the scoop:

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ELTK Stock Rockets On Government Order

In a press release this morning, Eltek announced that it has received yet another large order from a governmental authority. The order follows a July 24, 2017 announcement surrounding the original agreement with the unnamed authority.

Nonetheless, the government customer has exercised its option to extend the contract. As such, the customer placed a follow on order to an existing project that will generate up to $1.4 million in revenue for ELTK.

The company also said that the customer has extended the project for an additional two-year period. As is the case with any government contract, through the term of the contract, the company will be required to meet agreed upon milestones.

On top of the $1.4 million in revenue that the contract has the potential to generate, the customer has agreed to loan the company equipment that comes with a total value of about $630,000. In a statement, Eli Yaffe, CEO at ELTK, had the following to offer:

The original selection of Eltek by this customer attests to the trust in the Company’s technological capabilities. Eltek successfully met the initial milestones of the project and met the customer’s expectations. As a result, the governmental authority decided to extend the project for an additional two years. Eltek believes that first generation of the developed product will result in additional purchase orders for products in an amount that we cannot quantify at this point. Eltek also believes that the second generation product that will be developed during the extension period will create an advanced product which will increase Eltek’s competitiveness and brings Eltek a step closer to becoming a world class provider of high-end technology.

This Is Great News

This is great news for Eltek on several levels. First and foremost, the extension to the agreement will drive significant revenue through the doors. Of course, revenue under contract is always a great thing. However, the excitement goes further.

The truth of the matter is that governmental authorities tend to only invest in the latest and greatest of technology. Considering the fact that the contract has been extended and that a follow on order has been placed, Eltek’s produt is obviously being viewed as a supperior option to its competitors in the eyes of this governmental authority. That can go a long way when it comes to acquiring future agreements.

All in all, the news outlines further revenue to come down the line, positive catalysts ahead as milestones are met, and a strong argument that the technology developed at ELTK is some of the best in the world.

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