HawkEye 360's (HAWK) underlying business remains strong despite a recent selloff among space and defense tech peers, making its valuation more attractive, BofA Securities said in a note Thursday.

Q2 results indicated strong growth of 87% year-over-year, while the $292 million backlog offers visibility into 2026 targets, according to the note.

The company is benefiting from high global demand for radio frequency intelligence given the threat environment, while the international mix provides diversification beyond a relatively concentrated group of US customer agencies.

HawkEye 360 highlighted constellation expansion and technology development initiatives, including progress toward launches of Clusters 15 and 16 in the second half, the note added.

The brokerage sees the US slowdown as a temporary issue, offset by incremental award wins from customers including the National Reconnaissance Office, Space Force, and NASA in Q2.

BofA upgraded HawkEye 360 to a buy from neutral but lowered its price target to $23 from $34.

Shares of the company were up 5.5% in Thursday trading.

Price: 17.06, Change: +0.89, Percent Change: +5.50