On Tuesday, Roth/MKM updated their assessment of FTC Solar Inc. (NASDAQ:FTCI), increasing the price target to $0.50, up from the previous $0.45. The firm maintained a Neutral rating on the solar company's shares. The revision follows FTC Solar's recent financial performance updates, where the company reported a varied first quarter and a weaker second quarter.
The company has outlined its strategy to achieve a breakeven point by the third quarter and aims for profitability in the fourth quarter of 2024. Roth/MKM noted that the second half of 2024's projects appear to be less risky in terms of module supply, suggesting that the Solar Energy Industries Association's (SEIA) anti-dumping/countervailing duty (AD/CVD) investigation may not negatively affect FTC Solar.
Despite the potential for a smoother path ahead, the analyst from Roth/MKM expressed caution, indicating that FTC Solar might not reach gross margin breakeven until the first quarter of 2025. As a result, the firm has decided to maintain its revenue estimates for FTC Solar.
The analyst's comments suggest that FTC Solar's share price may continue to struggle below the $1 mark until the company can demonstrate it is on track with its forecast for the latter half of 2024. The updated price target reflects a slight increase, yet the Neutral rating indicates a wait-and-see approach to the company's stock performance.
InvestingPro Insights
FTC Solar Inc. (NASDAQ:FTCI) has been navigating rough waters, with a current market capitalization of $62.8 million reflecting the challenges the company faces. Analysts have recently lowered earnings estimates, with four analysts revising their forecasts downwards for the upcoming period, as per InvestingPro Tips. This aligns with the cautious stance taken by Roth/MKM, despite the company's efforts to reach profitability by the end of 2024.
Additionally, FTC Solar's financial health shows a significant cash burn, another point of concern highlighted in InvestingPro Tips. On the brighter side, the company holds more cash than debt, which could provide some cushioning against financial headwinds. However, the company's stock price has been highly volatile, taking a substantial hit over the last week with a -13.0% price total return, and it has plummeted by -83.92% over the last year. These figures highlight the importance of cautious investment strategies when considering FTC Solar's shares.
With a P/E ratio of -1.33 and a gross profit margin of just 4.47% for the last twelve months as of Q1 2024, FTC Solar's valuation challenges are evident. The company's share price performance and the absence of dividends may be deterring for investors looking for immediate returns. For those interested in a more in-depth analysis, InvestingPro offers additional insights, including 15 more InvestingPro Tips for FTC Solar, which can be accessed with a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.