On Monday, Canaccord Genuity adjusted its outlook on Surf Air Mobility Inc (NYSE:SRFM), reducing the price target to $2.50 from the previous $3.00, while still advocating a Buy rating for the stock. The change follows Surf Air Mobility's disclosure of its second-quarter performance as a publicly traded entity, which indicated advancements in network expansion and the acquisition of new customers for its unique powertrain technology.
The company has navigated recent supply chain obstacles and continues to progress in its business operations. Despite these developments, the certification of its electric powertrain has been deferred to 2027, a delay attributed to the timing of obtaining the optimal components necessary for the technology.
Canaccord Genuity's decision to lower the price target is based on revisions to their estimates and an increase in dilution assumptions. This adjustment comes in response to the recent downturn in the stock's price. The firm anticipates that Surf Air Mobility will provide more detailed projections for the year 2024 during its analyst day scheduled for June 7.
Surf Air Mobility's management has already issued guidance for the first quarter of 2024 (1Q24) and plans to offer further insights into the company's outlook later in the year. The delay in electric powertrain certification represents a shift in the company's timeline for this key component of its business model.
Shareholders and potential investors are now looking forward to additional information that will be shared by the company in the upcoming analyst day, which could provide a clearer picture of Surf Air Mobility's future trajectory and market potential.
InvestingPro Insights
Surf Air Mobility Inc (NYSE:SRFM) has been under notable financial scrutiny, as reflected in its adjusted market capitalization of $64.19M. While the company has shown impressive revenue growth of 198.44% over the last twelve months as of Q4 2023, this has not translated into profitability, with a negative P/E ratio of -0.31 indicating earnings challenges. Moreover, the company's gross profit margin stands at -2.34%, underscoring the cost-related pressures it faces.
InvestingPro Tips suggest that Surf Air Mobility operates with a significant debt burden and may struggle with making interest payments, which is critical to consider for investors eyeing the company's financial health. Additionally, the company's short-term obligations exceed its liquid assets, which could pose liquidity risks.
For those looking to delve deeper into the financials and future prospects of Surf Air Mobility, there are over 10 additional InvestingPro Tips available at https://www.investing.com/pro/SRFM. To aid in your investment decisions, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Despite the company's stock price declining by 73.24% over the past year, analysts anticipate sales growth in the current year, which may be a silver lining for investors with a long-term perspective. The upcoming analyst day on June 7 could provide crucial updates that may influence the company's valuation and investor sentiment.
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