This analyst loves Dragonfly Energy

Roth Capital Markets analyst Chip Moore said Dragonfly Energy Holdings (Dragonfly Energy Holdings Stock Quote, Chart, News, Analysts, Financials NASDAQ:DFLI) has emerged from a critical restructuring phase with a strengthened balance sheet and a clearer path toward profitability.

In a Nov. 17 update, Moore reiterated his “Buy” rating and raised his 12-month price target to US$1.50 from US$1.00, citing improved liquidity, reduced leverage and longer-term upside in the company’s solid-state manufacturing technology.

His revised US$1.50 price target is based on a roughly 2.0x EV/Sales multiple on 2026 revenue. Moore said recent financing and restructuring efforts remove a major overhang.

“We find risk/reward favourable given increasing potential for recovery in core end markets (and additional platform wins), diversification efforts underway (progress previously constrained by balance sheet), and differentiated solid-state manufacturing IP that can be leveraged longer-term.”

Reno-based Dragonfly manufactures lithium-ion batteries and integrated power systems for RVs, marine, off-grid and industrial storage applications. The company has spent the past year managing debt pressures and navigating mixed demand trends in its recreational-vehicle markets. Moore said those constraints have now eased substantially.

“We also now see support for more meaningful development of the company’s dry electrode technology (we believe underappreciated by investors), representing a key source of longer-term upside potential (near-term focus on profitability),” he said.

Dragonfly reported Q3/25 results largely in line with preliminary figures released in mid-October and slightly ahead of initial guidance, marking its fourth consecutive quarter of year-over-year revenue growth. Revenue rose 26% year-over-year to US$16.0-million, supported by a 44% increase in OEM sales. Adjusted EBITDA came in at –US$2.1-million, also slightly better than the company’s preliminary update. Gross margin improved to 29.7%, up from 22.6% in the prior year, benefiting from higher volumes and lower inventory costs. Quarter-end cash was US$3.8-million prior to subsequent financing events.

The more consequential development, Moore said, was Dragonfly’s recapitalization effort in October, when the company raised US$28.75-million and US$55.4-million in two equity offerings. Proceeds were used to prepay US$45-million of debt, while lenders converted US$25-million into preferred shares and forgave an additional US$5-million. Following these transactions, Dragonfly’s remaining debt stands at US$19-million, maturing in 2027 at a 12% rate. Pro forma cash is approximately US$30-million.

“The company also recently secured a US patent for core IP around its IntelLigence battery connectivity solutions, allowing multiple battery systems to communicate via wireless mesh technology,” Moore said.

The near-term outlook reflects typical seasonality and softer visibility in direct-to-consumer channels. Dragonfly expects Q4/25 revenue of roughly US$13-million and Adjusted EBITDA of about –US$3.3-million. Moore said the inflection point is approaching. “The path to achieving positive Adjusted EBITDA now looks in sight for next year, dependent on modest volume growth (with new markets expected to be a material driver – large fleet announcement anticipated near-term).”

Moore revised his forecasts to reflect updated demand expectations and the company’s focus on disciplined spending. He now expects fiscal-2025 revenue and Adjusted EBITDA of US$58.6-million and –US$11.4-million (previously US$63.2-million and –US$9.6-million), improving to US$88.6-million and –US$0.3-million in fiscal 2026.

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