VSE Corporation (VSEC): A Bull Case Theory

We came across a bullish thesis on VSE Corporation (VSEC) on Hidden Market Gems’ Substack. In this article, we will summarize the bulls’ thesis on VSEC. VSEC Corporation (VSEC)’s share was trading at $138.28 as of 11^th June. VSEC’s trailing and forward P/E were 56.71 and 59.11 respectively according to Yahoo Finance.

VSE Corporation is emerging as a hidden gem in the engineering and technical services, quietly building momentum despite being historically overlooked. Currently trading at $133.64, the stock has climbed more than 60% over the past year and remains significantly undervalued relative to its long-term potential, with a projected 2030 target of $314.

While short-term headwinds such as shareholder dilution and modest profit margins have pressured sentiment, the company’s fundamentals suggest a more promising future. Revenue has shown consistent annual growth from 2020 to 2024, reflecting operational resilience and execution. More importantly, VSE is now positioned at an inflection point where earnings are expected to expand meaningfully, underpinning a shift from mere consolidation to a clear growth trajectory.

Forecast models support this bullish case, projecting steady gains through 2030 under the “growth” scenario, far outpacing outcomes under consolidation or breakdown paths. This optimism is bolstered by recent market momentum and investor confidence, reflected in the stock’s strong technical performance.

Despite a previously discounted valuation of $100.01, far below its fair value estimate of $141.73, the company is now gaining traction with investors who recognize its turnaround potential. As a diversified industrial player operating in critical supply chain and logistics markets, VSE’s underlying business remains robust and well-aligned with long-term infrastructure and defense trends.

The market’s prior underappreciation appears to be reversing, with the current rally suggesting a broader rerating is underway. For long-term investors, VSE represents a compelling opportunity to participate in an overlooked compounder with significant upside and a favorable risk/reward profile.

We previously covered a bullish thesis on Lockheed Martin (LMT) by Steve Wagner, centered on its strong backlog and advanced defense pipeline despite near-term contract losses. Hidden Market Gems’ thesis on VSE Corporation (VSEC) offers a contrasting small-cap angle—highlighting long-term compounding potential through logistics growth. Both appeal to defense-oriented investors, but at different scales and risk profiles.

VSE Corporation (VSEC) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held VSEC at the end of the first quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of VSEC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.