San Jose-based Spectra7 released its Q4 and year ended December 31, 2017, financials earlier in March, showing a 16 per cent increase in revenue over Q4/16 at $2.9 million (all figures in US dollars unless noted otherwise) and a 23 per cent increase in revenue for the year at $10.6 million.
Nevertheless, Young says that in meeting with management following the Q4 and year end release, he was concerned to hear about how the company would respond to what he saw as a strained balance sheet.
“The VR/MR market, which represents ~70% of Spectra7’s current business, has met heavier-than-expected headwinds in Q1/18. This weakens the bridge to a ramp in DCI sales, which we model starting in Q4/18,” says Young in a research update to clients. “Given these factors, we have reduced estimates, which puts added strain on the balance sheet. We now see the need for a cash infusion before the end of Q3/18.”
The analyst estimates 2018 Sales and Adj. EBITDA for SEV of $13.0 million (down from $13.7 million) and negative $7.1 million (down from $6.0 million), respectively, while for 2019, his maintains his Sales estimate at $23.6 million and lowers his Adj. EBITDA from $2.7 million to $3.5 million.
Young’s C$0.20 price target (down from C$0.50) implies a 1.4x 2019E EV/Sales and represents an 11 per cent potential return on investment as of publication date.
Beacon Securities analyst Gabriel Leung maintained his “Buy” rating and $7.00 target on Tantalus Systems Holdings (Tantalus Systems Holding Stock… [Read More]
A dividend yield alone tells investors little about whether a stock deserves a place in their portfolio. In a November… [Read More]
RBC Capital Markets analyst James McGarragle lowered his target on Air Canada (Air Canada Stock Quote, Chart, News, Analysts, Financials… [Read More]
Paradigm Capital analyst Razi Hasan raised his target on Hammond Power Solutions (Hammond Power Solutions Stock Quote, Chart, News, Analysts,… [Read More]
Roth Capital Partners analyst Boobalan Pachaiyappan cut his target on ProMIS Neurosciences (ProMIS Neurosciences Stock Quote, Chart, News, Analysts, Financials… [Read More]
Roth Capital Partners analyst Philip Shen maintained his “Buy” rating and US$300.00 target on First Solar (First Solar, Stock Quote,… [Read More]