On Monday, Stifel initiated coverage on Gauzy Ltd (NASDAQ: GAUZ) stock with a Buy rating and set a price target of $18.00. The firm highlighted Gauzy's role as a provider of smart-glass solutions serving various industries, including automotive, aerospace, and architecture. Additionally, Gauzy offers advanced-driving solutions to the commercial transportation market.
Gauzy's financial performance has shown significant growth, with the company reporting a 48% year-over-year increase in revenue for the fiscal year 2023, reaching $78 million. Stifel projects that Gauzy's sales will continue to grow at a rate of 42% in both fiscal years 2024 and 2025. This growth is expected to be fueled by new program wins across the company's key segments.
The firm anticipates that Gauzy will achieve positive adjusted EBITDA by the end of fiscal year 2024. Going into fiscal year 2025, Stifel expects the company to maintain positive operating leverage. This outlook is based on higher volumes and improving input costs.
Stifel's $18 price target for Gauzy Ltd is based on a forward (fiscal year 2025) enterprise value (EV) to sales multiple of approximately 2 times, or around 17 times EV/EBITDA.
The firm considers this valuation to be quite reasonable in light of Gauzy's solid track record and an increasing backlog of orders. The positive outlook reflects confidence in Gauzy's continued financial and operational performance in the coming years.
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