ZENN Motor (ZENN Motor Stock Quote, Chart, News: TSXV:ZNN) has operational and balance sheet risks, but the company could deliver a big return for investors, says Industrial Alliance Securities analyst Steve Li. In a research update to clients today, Li placed a "Speculative Buy" rating and one year target of $2.50 on ZENN Motor, implying a return of 443% at the time of publication. The analyst had assumed coverage of ZENN earlier this week, but did not have a target or rating until this morning. Li notes that ZENN has now completed two rounds of independent testing for its composition modified barium titanate (CMBT) powder. He believes the technology has the potential to be disruptive in the manufacture of capacitors used in high voltage applications. If the company can continue moving forward, he believes it will have a "significant" cost advantage over the current standard of aluminum electrolytic and tantalum capacitors. The analyst says investors looking at ZENN Motor will have to weigh the company's opportunity against its current challenges. He notes, for instance, that it raised $1-million in February, but has a cash burn rate of about $270K a month. "We remain cautious given the company’s current balance sheet, yet excited at the potential upside to the story if the company shows further technical improvements and can advance commercial agreements in the near-term," he said. Li said he arrived at his target price by applying a 12.5x EV/EBITDA multiple on his fiscal 2017 estimate.