On Wednesday, Stifel has adjusted the price target for Dragonfly Energy Corp. (NASDAQ:DFLI), increasing it to $1.20 from the previous $1.00, while reaffirming a Buy rating on the stock. The revision follows the company's first-quarter 2024 results, which highlighted the progress of its auxiliary power units (APUs) for trucks, a segment that appears to be advancing more rapidly than anticipated.
The analyst from Stifel noted that the market opportunity for Dragonfly Energy's APU initiative is significant and relatively easy to quantify. This has contributed to the firm's continued positive outlook on the company's shares, despite acknowledging the risks associated with near-term funding.
Dragonfly Energy's focus on APUs, particularly through its partnership with Rush, is expected to represent a substantial revenue opportunity, estimated at around $70 million. The company's initiative is not only progressing well but also ahead of the expectations set by Stifel's analyst.
No substantial alterations have been made to the 2025 EBITDA estimates for Dragonfly Energy at this time. However, the potential for significant earnings from the APU market is clear. The new price target reflects improved working capital management by Dragonfly Energy, which has led to a reduced estimate of share dilution.
Stifel's maintained Buy rating indicates the firm's confidence in Dragonfly Energy's performance and its ability to capitalize on the opportunities within the APU market. The company's initiatives are seen as a strong driver for future growth and revenue generation.
InvestingPro Insights
As Stifel raises its price target for Dragonfly Energy Corp. (NASDAQ:DFLI), reflecting confidence in the company's APU market potential, real-time data from InvestingPro provides a broader financial context. The company's market capitalization stands at a modest $74.12M, indicative of its small-cap status. Despite the progress in its APU segment, Dragonfly Energy has experienced a significant revenue decline over the last twelve months, with a drop of 25.34%, and a more acute quarterly revenue decline of 48.35%. This suggests that while the APU segment may hold promise, the company is facing challenges in other areas of its business.
InvestingPro Tips highlight several key points for potential investors. Dragonfly Energy is quickly burning through cash and has been unprofitable over the last twelve months, with analysts not anticipating profitability this year. Additionally, the stock has experienced high price volatility and has generally moved in the opposite direction of the market. However, it's worth noting that the stock has shown a strong return over the last month and three months, with respective price total returns of 173.33% and 146.0%, potentially indicating a rebound or investor optimism regarding future prospects.
For investors looking for more comprehensive analysis and additional InvestingPro Tips, there are 15 more tips available for Dragonfly Energy on InvestingPro. To explore these insights and enhance your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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