Exro Technologies downgraded at National Bank

Following the company’s fourth quarter results, National Bank Financial analyst Rupert Merer has downgraded Exro Technologies (Exro Technologies Stock Quote, Chart, News, Analysts, Financials TSX:EXRO).

On March 31, EXRO reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted revenue of $6.7-million, belwo the street estimate of $10.6-million.

“2024 was a defining year for Exro, highlighted by record revenue, the merger and integration with SEA, and critical cost-saving initiatives,,” said Exro CEO Sue Ozdemir. “Despite industry-wide macroeconomic challenges, we have demonstrated resilience and adaptability. The first half of the year was focused on merger integration, while the latter half established a strong foundation for future growth. As we enter 2025, we remain dedicated to scaling operations and driving commercialization in a dynamic market.”

Merer says EXRO faces a reckoning.

“EXRO cut costs by $15-million annualized last year and followed up with a more than 20-per-cent headcount reduction in Q1,” he wrote. “However, with the company burning $8-milion per quarter by our forecasts (with a draw-down in working capital), it needs access to capital. EXRO has been receiving non-dilutive financing from an existing investor, and we believe that this should continue for the foreseeable future. The company is evaluating other potential funding options with the assistance of third-party financial advisors, and we believe that this could include a privatization of the company.”

As reported by the Globe and Mail, Merer April 2 changed his rating on EXRO from “Sector Perform” to “underperform” and lowered his price target on the stock from $0.50 to $0.20.

“We believe that EXRO has a unique and valuable technology offering, but it needs access to additional capital to survive to break-even,” he said. “With heightened liquidity risk and challenged markets, including tariff risk and reduced support for EV’s, we are moving our rating to Underperform [from Sector Perform].”