Cadre Holdings stock is down 44% since Barron's Investor Circle recommended it in March, including a 13% drop since our last update in late May.

That is short of the small-cap focused Russell 2000, which has gained 8% in the seven months since our original call. This week, Cadre stock fell below $26 per share, a critical level of technical support and a new two-year low. Time to move on and close the pick.

The company, which manufactures and distributes tactical duty gear for law enforcement and military markets, as well as safety equipment for nuclear containment, has expanded rapidly in recent years through multiple strategic acquisitions.

In January, Cadre closed on its $175 million purchase of TYR Tactical, a leading provider of hard armor plating, vests, and shielding that marked an important entry point for the company into new markets. This was followed up by the smaller $10.3 million deal for Alien Gear Holsters announced in March, adding to Cadre's exposure to premium firearms accessories.

That growth hasn't been without its share of speed bumps. Transaction costs, integration expenses, inventory accounting, and a foreign exchange drag have all been cited by the management as factors impacting earnings this year. The company didn't immediately respond to a request for comment for this article.

What originally attracted us to the stock was Cadre's exposure in nuclear safety, fueled by its 2024 acquisition of Alpha Safety and Carr's Engineering in 2025. The nuclear market is expected to benefit from several federal programs funding environmental cleanup in both nuclear energy production and for national security environments. Timing issues related to project mandates being pushed back have slowed traction in this segment.

The trend is evident when tracking changes to earnings projections. In early February, Cadre was forecast to reach earnings of $1.46 per share for the full year 2026 based on a consensus estimate of five Wall Street analysts tracked by FactSet. That figure has since been revised lower to the current $1.00 per share estimate, which would correspond to a 2% decline from 2025.

We can also point to Cadre's increasing debt level as a culprit weighing on the stock, particularly in an environment of elevated interest rates. While still well-covered by underlying free cash flow generation, the company's current net leverage ratio, last reported at 2.5x, is up from 1.7x at the end of 2025.

Still, the stock continues to attract bulls on Wall Street. JPMorgan analyst Tomohiko Sano remains constructive on Cadre, reiterating an Overweight rating for the stock in August. Sano hiked his price target from $40 to $45. That target now represents a potential upside of 78% from the current share price around $25.31.

Cadre reported second-quarter revenue of $207 million, a 32% year over year jump. Organic growth excluding the boost from acquisitions was closer to 5%. Earnings of $0.26 per share, while down from $0.30 in the prior year quarter, surpassed expectations with management citing strong demand trends. The order backlog reached a record $368 million, up from $355 million at the end of the first quarter, suggesting a runway for continued sales growth.

Cadre management raised full year guidance for net sales and adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda. The target increased to between $139 million to $144 million from a prior range between $136 million to $141 million.

Sano at JPMorgan describes the result as strong, with notable contract wins reinforcing the company's momentum into 2027. "We view nuclear power as providing long-term upside potential," his report says.

For investors still convinced of Cadre's opportunity to consolidate its leadership in key safety markets, and willing to ride out the market volatility, holding on to the stock is an option. For us, we believe there are more compelling opportunities elsewhere in the market.

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