Kromeek (LSE:KMK) is a penny stock that few people have heard of. However, in the last six months this price has increased by almost 150% to just under 12p per share.

This is of course a much higher return than the case FTSE100 or other index.

However, looking further, the picture is not so rosy, as Kromek’s share price is 60% lower than it was ten years ago. The small-cap company doesn’t pay dividends, so this underperformance is disappointing in the long run

Nevertheless, below-the-radar stocks clearly have robust momentum right now. So maybe it’s worth taking a closer look?

The company in brief

Kromek produces high-performance radiation and biosensing technology products for two global markets: advanced imaging and chemical, biological, radiological and nuclear (CBRN) detection.

In the area of ​​advanced imaging, the company is a key supplier of CZT-based detector modules. They have significantly improved the quality of medical imaging with lower patient radiation doses. CZT (cadmium zinc telluride) is a crystalline semiconductor material used for radiation detection.

Its CBRN activities include portable devices used for gamma ray detection and isotope analysis in complicated nuclear environments. They are widely used in nuclear power plants and increasingly in homeland defense.

Why are investors bullish?

Turning to the financials, it’s basic to see why the share price performed well. Kromek has real business momentum, with revenues up 305% to £15m in the six months to October 31.

This number was significantly increased thanks to the signing of a immense licensing agreement with the company Siemens Healthineers in January 2025. The contract was worth $37.5m (£29.5m) over four years, bringing the group to profitability for the first time.

However, even without this deal, revenue from advanced imaging increased by 41% to £2.5m, while revenue from CBRN detection more than doubled to £4.3m. Gross margin increased dramatically to 71.7% from 56.9%, helping the company go from a loss of £5.7m to a pre-tax profit of £3.1m.

CEO Dr. Arnab Basu said: “Thanks to robust customer engagement and a good order book, we expect the momentum achieved in the first half of the year to continue. As a result, we remain on track to achieve full-year results in line with market expectations“

For FY26 (ended April), the market expects revenue of £27.1m and net profit of £2.5m. Revenues in the 2020 financial year were £13.1 million.

Medium-term goals

Needless to say, investing in a tiny company with a capitalization of £78m and generating a profit of £2.5m increases significant risk. With such a tiny advantage, it won’t take much for Kromek to return to the red.

For example, a company may be affected by global supply chain constraints that raise costs or delay production. Also, immense contracts such as Siemens Healthineers can result in a lump sum impact on the bottom line.

However, considering the longer term, I’m quite bullish here. Kromek should win more contracts when nuclear energy comes back into fashion. After all, the development of nuclear energy requires greater monitoring of public safety.

Most importantly, the agreement with Siemens Healthineers was non-exclusive. Kromek is therefore free to supply its intellectual property to other manufacturers in the advanced imaging markets as it plans to achieve revenues in excess of £60 million and an EBITDA margin of 30% in the medium term.

Finally, Kromek’s price-to-sales ratio of 2 isn’t particularly high. Overall, I think these penny stocks are worth further research by adventurous investors. Grand is currently purchasing 8,403 shares.