Ispire is my best stock idea, this analyst says

As we transition into the second half of 2024, Roth MKM Managing Director Scott Fortune’s eyes are on one stock in particular: Ispire Technology (Ispire Technology Stock Quote, Chart, News, Analysts, Financials NASDAQ:ISPR).

In a research update to clients July 22, Fortune maintained his “Buy” rating on ISPR while raising his price target from $11.00 to $12.50.

“ISPR is our best 2H24 idea. We are raising our revenue estimates and price target (from $11 to $12.50), reflecting additional meaningful revenue growth tied to new global e-cig partnerships,” he wrote. “We are confident that exceptional growth will continue and expect upside from new ODM partnerships, distribution expansion, age gating technology licensing, open pod system share capture, and U.S. cannabis rescheduling. Additionally, we expect GM expansion by adding/scaling new lines from in-house manufacturing. We believe shares are attractive at 1.0x new ’25 estimates and reiterate Buy.”

Fortune believes ISPR will post and EBITDA loss of $9.5-million on revenue of $148.6-million in fiscal 2024. He expects those numbers will improve to an EBITDA loss of $2.8-million on a topline of $244.9-million in fiscal 2025.

“Our new price target assumes an EV/ Revenue multiple of 2.5x our ’25 revenue estimates. ISPR trades at ~1.0x our new ’25 revenue estimates and, despite outsized industry revenue growth, trades well below vape hardware, tobacco/e-cigarette, and MSO peers (2.4x, 4.3x, and 2.0x),” the analyst concluded.

What does Inspire Technology Inc. do? (via Roth MKM)

Ispire Technology Inc. is a U.S. company engaged in the research and development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and cannabis vaping products. The company’s cannabis products are vaping hardware and marketed under the brand name Ispire. Its tobacco products are marketed under the Aspire brand name. ISPR’s products are vaping devices, a category that includes open-system vaping devices, vaping components, and disposable closed-system vaping devices. The company’s products use patented innovative technology, including bottom dual coil (BDC), Cleito tank coil, Ducore (Dual Coil) technology, and Ispire ONE, which enables higher temperature and expanded heating without burning oil that achieves much greater flavor and vapor production. It’s JV with Berify potentially adds an age-verification technology to its devices to appease FDA concerns around minors’ access. The company sells devices to brands (ODM or OEM) and directly to consumers (branded products) in two large growing vape markets of cannabis and tobacco.