Volatus keeps “Buy” rating at Ventum

Its third quarter results are in the books and Ventum Capital Markets analyst Rob Goff remains bullish on Volatus Aerospace (Volatus Aerospace Stock Quote, Chart, News, Analysts, Financials TSXV:FLT).

On November 28, FLT reported its Q3, 2024 results. The company posted an EBITDA loss of $1.3-million on revenue of $6.6-million.

“During Q3 2024, Volatus has been focused on closing the transaction between Drone Delivery Canada and Volatus Aerospace Corp., positioning the Company for growth, and for the future of BVLOS” CEO Glen Lynch said. “As we integrate our organization, we look forward to expanding this further, adding remote operational capabilities and cargo delivery to our ever-expanding portfolio.”

Goff says this transitional quarter had a lot of things going on.

“Services revenue recorded growth of 17% QoQ and 44% YoY to reach $5.5M beating our forecast of $4.0M,” the analyst said. “The focus on maintaining financial flexibility saw equipment sales held back to $1.1M, down 52% QoQ and down 66% YoY while in line with forecast. Consequently, the revenue mix showed a significant shift, with services and equipment contributing 84% and 16% of revenues, compared to 60%/40% YoY and 67%/33% QoQ. Management noted that with a rebound in equipment sales, it expects services to contribute 50-55% of revenue with equipment sales at 40-45%. Management also noted that re-occurring revenues are ~90% as most equipment sales are from repeat enterprise customers.”

In a research update to clients December 2, Goff maintained his “Buy” rating and price target of $0.38 on FLT, implying a return of 162.1% at the time of publication.

The analyst thinks the company will post an EBITDA loss of $3.4-million on revenue of $26.3-million in fiscal 2024. He expects those numbers will improve to EBITDA of positive $5.7-million on a topline of $60.3-million in fiscal 2025.

Goff says there could be more upside to FLT that he is currently not factoring in.

“We confirmed our 2025 forecast revenue of $60.3M and EBITDA of $5.7M. However, the strength of service revenues in Q3/24 and management’s comments about its sales pipeline support greater optimism that we will upgrade our forecasts as the year progresses. We look for Volatus to turn EBITDA positive in Q2/25 where the seasonally slow Q1/25 quarter defers the achievement by one quarter,” he wrote.

Disclosure: Volatus Aerospace is an annual sponsor of Cantech Letter