Kromek Group (LSE: KMK) is an AIM-listed 10.7p penny stock with a £72.6m market-cap. The UK-based group develops radiation detection equipment for medical imaging, nuclear sites and security screening.

It serves mainly the domestic and US market, primarily supplying cadmium zinc telluride-based detectors.

That’s a relatively niche market, which can be both advantagous and problematic. While it’s unlikely to face stiff competition, demand for its products could drop sharply if conditions change.

But for now, it seems to be doing very well. Let’s take a closer look.

Lofty growth expectations

The share price has soared 103% in the past 12 months, driven largely by strong H1 results covering the six months to 31 October 2025.

And analysts following the stock don’t think it’s done. They expect further growth, with an ambitious 12-month target of 22.5p — a 106% rise!

But is it realistic to expect the shares to double in value again by next April?

Before getting too excited, I decided to take a closer look.

In demand

What I like about Kromek is that it actually has fairly decent earnings visibility for a penny stock. Its near-term revenue pipeline is substantial, with deals in place worth upward of $20m for 2026.

This momentum’s driven by expanded distribution in 39 new countries across Europe, the Middle East and Asia.

In H1 2026, it reported £15m in revenue — up from £3.7m — with management guiding for £60m by 2030. That’s an ambitious target, but is it backed by evidence of prevailing demand?

These notable orders and contract wins seem to suggest so:

• £4.8m orders globally.
• A $37.5m deal with Siemens Healthineers.
• A £1.7m, four-year Radiological Nuclear Detection Framework with the UK MoD.
• Additional nuclear security orders from UK/Europe, US, Japan, and Canada worth £2.9m.
• Multi-year bio-security contracts in the US.

So it’s a profitable, growing business that appears to be in high demand. What’s the catch?

Risks

Micro-cap stocks always face higher risk than larger companies, and Komek’s no stranger to that. Supply chain issues and reliance on debt are key challenges that the group has struggled with in the past.

It still carries £4.62m in debt and needs to maintain high cash flow to keep operating. Any significant contract loss or delayed order could throw it off track. Plus, penny stocks are thinly traded, which adds liquidity risk for shareholders. 

Still, with £56.88m in equity and a return on equity (ROE) of 25%, I wouldn’t say it’s struggling.

My verdict

Penny stocks always require a bit more faith than larger-caps, with the high reward potential coming with a big dollop of risk. More often than not, assessing them feels like trying to see in the dark. But for Kromek Group, its forecast price growth’s backed by real-world use cases and steady demand.

Aside from a steady medical imaging orderbook, the growing threat of nuclear instability in the Middle East will likely boost demand.

Like any micro-cap, it’s not something to go all in on. But with growing demand and promising forecasts, it’s worth considering as a small allocation.