On Thursday, Northland reaffirmed its positive stance on XOS Inc. (NASDAQ: XOS), maintaining an Outperform rating while adjusting the price target to $16 from the previous $22.50. The company, known for its electric commercial vehicles, exhibited mixed results in the first quarter, with revenues falling short of expectations. However, this was somewhat mitigated by better-than-expected margins, which were attributed to higher average selling prices and improved inventory management.
During the second quarter, XOS successfully cleared its earlier model inventory, which was a factor in previously lower margins. This move is anticipated to enhance the company's margins beginning in the third quarter. Additionally, XOS has recently completed the acquisition of SOLO, which has bolstered its financial position by approximately $50 million in cash.
The analyst pointed out that the XOS Hub continues to attract customer interest, leading to plans for expanding capacity in the second half of 2024. Despite the reduction in the price target, the firm's outlook on XOS remains optimistic, reflecting confidence in the company's future performance and strategic initiatives.
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