On Tuesday, Roth/MKM initiated coverage on Dragonfly Energy Corp. (NASDAQ:DFLI) shares with a Buy rating and a price target set at $0.90. The firm indicated that the current challenges faced by the company in its core market are now reflected in the stock's price. They also expect a gradual recovery in the next year.
The firm sees potential for Dragonfly Energy in expanding into adjacent niche energy storage markets, such as auxiliary power for trucks, marine, and off-grid applications. These markets could provide additional growth opportunities for the company.
Roth/MKM highlighted Dragonfly Energy's proprietary dry deposition technology as an undervalued asset with longer-term upside potential. This technology could contribute to the company's growth and is a factor in the analyst's positive outlook.
The new price target of $0.90 represents a significant milestone for Dragonfly Energy, as it aims to navigate through current market conditions and leverage emerging opportunities in the energy storage sector.
The upgrade to a Buy rating by Roth/MKM reflects confidence in Dragonfly Energy's strategy and potential for growth, despite the immediate challenges within its primary market. The firm's analysis suggests that the company's advancements and strategic moves could help drive its stock value in the foreseeable future.
InvestingPro Insights
As Dragonfly Energy Corp. (NASDAQ:DFLI) garners attention with Roth/MKM's initiation of coverage and a Buy rating, real-time metrics from InvestingPro provide a deeper dive into the company's financial health and market performance. With a market capitalization of $26.8 million and a price-to-book ratio of 1.1 as of the last twelve months ending Q3 2023, the company shows a tangible level of assets relative to its share price. However, the revenue decline of nearly 14% over the same period signals the challenges noted by analysts.
InvestingPro Tips highlight critical factors for investors to consider. Dragonfly Energy's stock price has historically moved counter to the market and is currently trading near its 52-week low, which may interest contrarian investors. Additionally, while the company's liquid assets exceed its short-term obligations, reflecting a degree of liquidity, analysts are not optimistic about profitability in the current year, echoing the concerns about sales decline.
For investors seeking comprehensive analysis and additional insights, InvestingPro offers more tips on Dragonfly Energy. With the use of coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a total of 14 InvestingPro Tips that could further inform investment decisions.
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