A penny stock can be a risky investment, but MTI Wireless Edge (LSE: MWE) has caught my eye of late.

It’s rewarded investors with a 48% share price rise since the beginning of the year. The gain pushed the company’s market cap up to a £58.6m by market close on Friday (17 April), with the share price at 68p.

To be cautious for a moment, we’re still looking at a 13% fall over the past five years. But the share price has been creeping up since early 2024. So are we looking at a small-cap bargain for Stocks and Shares ISA investors to consider now?

Defence boost

MTI develops wireless antenna systems, including airborne, naval, and tactical military antennas. So it’s clearly riding on the back of a defence premium. Current global military crises have given stocks like BAE Systems a boost, up over 30% so far this year. And they’re helping keep the Rolls-Royce Holdings share price climb going too.

Full-year results for 2025, released in March, were impressive. The company saw revenue grow 13%, to $51.5m. And that led to a bottom-line earnings per share increase of 17%, to 5.86 cents. And while the defence business was the biggest driver of that, MTI reported double-digit revenue growth across all divisions.

One thing can be a killer of penny stock companies, and it’s cash weakness. FTSE 100 sector leaders have the financial clout to get through bad spells — as Rolls-Royce has so stunningly demonstrated. But tiny-cap companies can easily hit the wall in a crunch.

The cash

And that brings me to perhaps the thing I like most about MTI Wireless Edge — the balance sheet. The company was able to lift its final dividend by 3%, after ending the year with net cash of $9.4m. And we’re even looking at a share buyback programme here, which is now extended out to March 2027.

At results time, CEO Moni Borovitz of the Israel-based company said: “We are confident going into 2026 given the size of both our current backlog of orders and the pipeline of new opportunities that we are pursuing.“

Since those results, the company has announced more contract wins. As recently as 13 April, the CEO told us: “In the first two weeks of April, we have secured a series of significant defence-related orders with a combined value of approximately US$8m.”

To put that into perspective, those new orders are alone worth 13.7% of MTI’s total 2025 revenue.

An ISA buy?

There’s no way to guess what might happen when the current Middle East conflicts die down as well all hope they will soon. If defence forces come out of it with all the antenna systems they need for the foreseeable future, revenue in future might become a bit tighter?

And though the liquidity situation looks healthy, it might not take much of a shock to change that. Still, right now I think the signs look good. I really do think penny stock investors should consider MTI Wireless Edge.