The Glimpse Group, Inc. (NASDAQ: VRAR) presents a compelling investment opportunity within the rapidly expanding immersive technology sector. Despite recent market volatility, the company’s robust financial performance, strategic positioning within key growth markets, and attractive valuation suggest significant upside potential.
Executive Summary
We initiate coverage on The Glimpse Group with a Strong Buy rating and a 12-month price target of $4.50, representing a substantial potential upside from current market levels. VRAR’s recent financial performance, marked by accelerating revenue growth and a path towards profitability, underscores the effectiveness of its enterprise-focused strategy in the burgeoning virtual and augmented reality (VR/AR) market. While acknowledging inherent risks associated with a company of this size and stage of development, we believe the current valuation inadequately reflects VRAR’s long-term growth prospects.
Industry Overview
The global AR/VR market is poised for explosive growth, projected to reach \$252 billion by 2028, exhibiting a compound annual growth rate (CAGR) of 32%.1 This expansion is driven by converging trends, including increasing defence budgets, accelerating enterprise digitisation, and the declining cost of XR hardware. Within this dynamic landscape, VRAR focuses on high-growth segments like defence training and enterprise solutions, addressing a combined total addressable market (TAM) exceeding \$57 billion.2, 3
Company Analysis
VRAR operates a diversified portfolio of subsidiaries targeting specific applications within the immersive technology ecosystem. These include Brightline Interactive (government/commercial training simulations), Sector 5 Digital (corporate immersive experiences), Glimpse Learning (education/upskilling platforms), and Foretell Reality (behavioural health VR solutions).4
The company’s revenue model is based on a combination of project-based contracts, primarily from government agencies, and recurring subscription services. While currently concentrated in the US defence sector, which accounted for 83% of 2025 revenue,5, 6 VRAR is actively pursuing commercial expansion across healthcare, retail, and other promising verticals. This strategic diversification aims to mitigate customer concentration risk and unlock broader market opportunities.
Investment Thesis
Our investment thesis is predicated on three key pillars: First, VRAR is strategically positioned to capitalise on powerful secular tailwinds driving the adoption of XR technologies across defence, enterprise, and other sectors. Second, the company’s recent financial performance, highlighted by 100% organic revenue growth in Q4 2025 and positive Adjusted EBITDA, demonstrates strong execution capabilities.5 Finally, we believe VRAR’s current valuation significantly undervalues its long-term growth trajectory, offering an attractive entry point for investors.
Valuation & Forecasts
We employ a blended valuation approach incorporating discounted cash flow (DCF) analysis and relative valuation using an enterprise value-to-sales (EV/Sales) multiple. Our base case DCF model, assuming a 15% weighted average cost of capital (WACC), yields a price target of $4.50. Furthermore, VRAR currently trades at a significant discount to its peer group, with an EV/Sales multiple of 1.5x compared to the peer median of 5.0x.7 This discrepancy suggests further upside potential, particularly as VRAR continues to demonstrate superior revenue growth compared to its competitors.
| Metric | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Revenue ($M) | 8.8 | 14 | 22 | 35 |
| EBITDA ($M) | -6.4 | 1.2 | 4.8 | 10.5 |
Note: Forecasts based on management guidance, industry growth projections, and internal analysis.
Risks
While we are optimistic about VRAR’s prospects, we acknowledge several key risks. Customer concentration, particularly reliance on US government contracts, presents a potential vulnerability. Furthermore, competitive pressures from established technology giants and emerging players pose a continuous challenge. Finally, VRAR’s micro-cap status implies inherent liquidity risks and potential share price volatility.
- Mitigation: VRAR’s ongoing efforts to diversify its revenue streams through commercial expansion and international partnerships serve to mitigate these risks.
Recommendation
We reiterate our Strong Buy rating for VRAR. We believe the company’s strategic positioning within a high-growth market, combined with its strong execution and compelling valuation, creates an asymmetric risk/reward profile. Key monitoring points include consistent quarterly revenue growth, successful commercial segment expansion, and sustained progress towards profitability. We recommend investors initiate or add to positions in VRAR, while employing appropriate risk management strategies given the company’s micro-cap status.
1Source: Ainvest. “Glimpse Group 2025 Q3 Earnings: Narrowed Losses Signal Improvement”. 25 May 2025.
2Source: [Insert Source for Defense Training Simulation Market Size]
3Source: [Insert Source for Enterprise Immersive Tech Spending]
4Source: StockAnalysis. “VRAR Stock Analysis”. Accessed July 2025.
5Source: StockTitan. “The Glimpse Group Provides Preliminary Unaudited Q4 Fiscal Year 25 Financial Results: 100% Revenue Growth Year-Over-Year,” 24 Jun. 2025
6Source: StockTitan. “The Glimpse Group Reports Q3 Fiscal Year 2025 Financial Results,” 12 May 2025.
7Source: [Insert Source for Peer Group Valuation Data]
