On Monday, Roth/MKM adjusted its outlook on Smith Micro Software (NASDAQ: NASDAQ:SMSI) shares, reducing the price target to $12 from the previous $24, while still endorsing the stock with a Buy rating.
The revision reflects a reassessment after the company experienced challenges due to carrier integration processes, particularly with AT&T (NYSE:T) and T-Mobile. Despite these hurdles, the analyst believes that Smith Micro Software is on the cusp of a growth phase.
The firm anticipates that Smith Micro Software will benefit from the stabilization of its relationship with T-Mobile and the forthcoming marketing initiatives by AT&T, which aims to leverage its substantial customer base of 41 million accounts.
These developments are expected to coincide with the rollout of SafePath Global, starting with DISH and expanding to include a robust pipeline of opportunities, as well as the involvement of a major European operator.
Although the price target has been lowered, the analyst remains optimistic about the company's prospects. The recent capital raise by Smith Micro Software has been cited as a strategic move that enhances the company's financial flexibility.
This, coupled with the expected commercialization of its products, underpins the analyst's positive stance, seeing potential for the stock to reach the newly set $12 target.
Roth/MKM's position is buoyed by the belief that the difficulties faced by Smith Micro Software are subsiding, allowing the company to move forward with growth initiatives.
The endorsement reflects confidence in the company's ability to capitalize on upcoming opportunities and navigate past the disruptions caused by carrier integration efforts.
In conclusion, the firm's analysis suggests that while the near-term outlook required an adjustment to the price target, the long-term growth trajectory for Smith Micro Software remains promising. The maintained Buy rating indicates a belief in the company's capacity to achieve the revised price target of $12.
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