On Friday, H.C. Wainwright maintained a positive stance on NASDAQ:REE, reiterating a Buy rating and a $15.00 price target for Ree Automotive Holding Inc. The firm's analysis followed Ree Automotive's second-quarter financial report, which revealed the company had not generated revenue but saw a reduction in expenses and losses compared to the previous year.
Ree Automotive reported on Thursday, September 26, 2024, that its selling, general, and administrative costs had decreased by 14% year-over-year to $6.9 million. Research and development expenses also saw a significant drop, falling 58% to $8.1 million. These reductions contributed to a lower operating loss of $15.6 million, improved from a $27.4 million loss in the same quarter the year before.
The company's adjusted EBITDA loss for the quarter was $11.2 million, showing a substantial improvement from the $22.0 million loss in the second quarter of 2023. The net loss for the quarter stood at $10.8 million, or $0.84 per share, which was notably less than the $26.2 million, or $2.61 per share loss, reported in the same period last year.
As of June 30, 2024, Ree Automotive's financial position included $63.0 million in cash, cash equivalents, restricted cash, and short-term investments, with debt recorded at $19.0 million. Subsequent to the quarter's end, the company successfully raised $43.3 million in gross proceeds through equity financing from both an existing and a strategic investor.
In other recent news, REE Automotive has secured a $45.35 million funding round and entered into strategic partnerships with Motherson Group and Roush Industries. The funding will support the company's production needs and the partnerships aim to bolster its supply chain management, cost structure, and global reach. REE has also initiated production in the U.S. and reported a 15% quarter-over-quarter increase in its order book, now valued at approximately $60 million.
The collaboration with Roush marks the beginning of full vehicle assembly in Michigan, with production expected to start in Q4 2024. REE's financial health remains robust, ending Q2 2024 with liquidity of $60.5 million, including cash, cash equivalents, short-term investments, and a $15 million credit facility.
In another development, REE Automotive has teamed up with Motherson Group, a global automotive supplier. This partnership, backed by a $45.35 million direct offering led by M&G Investment, aims to enhance REE's production capabilities and accelerate its market presence, particularly in the U.S.
Lastly, Perion Network (NASDAQ:PERI) Ltd. has scheduled its Annual General Meeting of Shareholders for later this year. The meeting will include standard corporate governance matters, such as the election of directors and approval of the company's independent auditors.
InvestingPro Insights
Following the recent financial report from Ree Automotive, H.C. Wainwright reaffirmed their Buy rating and price target. To provide further context to investors, real-time data from InvestingPro illustrates a nuanced picture of the company's financial health. Ree Automotive's market capitalization stands at $115.4 million, reflecting the market's current valuation of the company. Despite the lack of revenue in the last twelve months as of Q1 2024, with a figure of $1.77 million, the company has managed to reduce its gross profit margin deficit to -130.43%, indicating some improvement in cost management. Operating income remains significantly negative at -$113.35 million, highlighting the challenges still faced in achieving profitability.
An interesting aspect for potential investors to consider is the company's price performance. The one month and three month price total returns have surged to 64.01% and 63.17%, respectively, potentially signaling growing investor confidence in the company's future prospects. Additionally, the stock is trading at 75.68% of its 52-week high, which may suggest room for growth if the company continues on its current trajectory. InvestingPro Tips further advise considering the fair value estimates; while analyst targets average a fair value of $14.5, InvestingPro's assessment sets it at $4.79, which could be indicative of the stock's potential overvaluation or undervaluation based on different analytical models. For investors seeking more detailed analysis, InvestingPro offers additional tips, with a total count of [insert number] available on their platform.
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