Windar photonics (LSE:WPHO) is a penny stock that has performed extremely well over the last five years. During this time the price rose from 18p to 52p, an escalate of almost 200%.

However, in the last month, Windar’s share price has fallen by 20%. This leaves it slightly below its 12-month average price target.

Let’s take a closer look at this UK penny stock to see if it’s worth considering.

What is Windar?

This OBJECTIVE-The publicly traded company produces LiDAR sensors that assist wind turbines operate more efficiently. They measure wind speed and direction, allowing the turbine to automatically adjust its blades to capture more energy while reducing mechanical stress.

Over time, the result is improved efficiency and lower maintenance costs (significant for wind farm operators looking to maximize profits). Windar says its flagship WindEye sensor provides customers with a return on investment in one to four years.

What sets this company apart is its costs. Its LiDAR systems utilize patented compact semiconductor laser technology, replacing pricey fiber-amplified lasers commonly used by competitors.

Finances

Of course, this all sounds very positive. What about the company’s finances?

Well, the first thing to note is that Windar is still loss-making. In the first half of 2025, it recorded a loss after tax of EUR 0.7 million, which is more than last year’s EUR 0.3 million. Unfavorable currency changes had an impact of EUR 0.5 million, mainly as a result of the weakening of the US dollar and Chinese yuan against the euro.

They are probably the main threats here. Windar has no proven history of profitability, which means that even relatively diminutive currency fluctuations can have a huge impact. Meanwhile, American tariffs are causing headaches for all companies.

The upside is that the company enjoys great commercial momentum. In August, it won an American order for modernization worth $2.6 million VestaV82, and Nexus OS software helped escalate gross margin by 2 percentage points to 62%.

Meanwhile, revenues in the first half of the year increased by 18% to €2.7 million, with higher sales expected in the second half. The management board is convinced that full-year expectations will be met and revenues should more than double, to EUR 9.55 million. City analysts also expect the first-ever profit, albeit a diminutive one.

Sales are expected to escalate to EUR 14.6 million in 2026. If the forecasts come true, a profit of EUR 4.4 million is on the cards.

Finally, the balance sheet is in good shape, with net cash at the end of June of €4.9 million.

With 2025 sales and orders at the end of August 2025 already amounting to 138% of 2024 revenues and the current cash position, the company is well positioned to realize its significant potential.

Windar CEO Jørgen Korsgaard Jensen.

Objective

Based on current forecasts for 2026, the forward share price-to-earnings ratio is just 14. This looks attractive for a growing company with a enormous market to reach (it targets growth in Europe, America and Asia).

It’s no surprise then that the average 12-month share price target among two analysts covering the stock is 95p. That’s an 80% escalate over current levels, meaning a £10,000 investment could amount to £18,000 if the experts are proved right.

Of course, this much higher goal may not be achieved. However, with a clear path to profitability and a seemingly undemanding valuation, I think it’s worth taking a closer look at this 52p share.