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On Tuesday, BofA Securities adjusted its outlook on EHang Holdings (NASDAQ:EH), reducing the price target from $26.00 to $24.00 while still recommending the stock as a Buy. The adjustment follows EHang’s first-quarter 2025 financial results, which revealed sales at RMB 26 million. With a current market capitalization of $1.22 billion and trading at $16.96, EHang’s stock has shown high price volatility, as highlighted by InvestingPro data. This figure represents a significant decline, dropping 58% year-over-year and 84% quarter-over-quarter. The decrease in sales was primarily attributed to lower-than-anticipated electric vertical take-off and landing (eVTOL) deliveries, with only 11 units delivered compared to the expected 60 units.
According to Fiona Liang, the analyst at BofA Securities, the shortfall in deliveries was due to a combination of seasonal factors, extended internal budgeting and approval processes for procurement from local governments, and a cautious approach from potential customers awaiting the Operational Certificate (OC) that EHang obtained in late March 2025. Despite the disappointing delivery numbers, EHang saw a slight improvement in gross profit margin (GPM), which rose to 62.4%, a modest increase from the anticipated 62%. This continues EHang’s track record of impressive margins, with InvestingPro data showing a sustained gross profit margin of 61.37% over the last twelve months. The company maintains strong financial health with a current ratio of 2.89, indicating solid short-term liquidity. This improvement was helped by higher selling prices for the EH216 series products.
Operational expenses (Opex) relative to sales significantly increased to 425%, a rise of 250 percentage points year-over-year and 327 percentage points quarter-over-quarter. EHang’s non-GAAP net loss for the first quarter of 2025 was reported at RMB 31 million, which was more substantial than BofA’s estimate of a RMB 12 million net loss.
BofA Securities had originally initiated coverage on EHang with a price target of $26 on May 13, 2025. Despite the reduced price target and the challenges faced in the first quarter, BofA Securities maintains a positive outlook on the stock with a Buy rating. The firm’s stance indicates a belief in EHang’s potential for recovery and growth in the eVTOL market. This optimism is reflected in the broader analyst consensus, which remains strongly bullish, with revenue expected to double in the current fiscal year. For deeper insights into EHang’s financial health, growth prospects, and 12 additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, EHang Holdings reported a substantial 190% year-over-year revenue increase for Q4 2024, reaching RMB 164.3 million, surpassing analyst forecasts. The company’s earnings per share (EPS) improved to -0.33, better than the projected -0.83, marking a significant positive surprise for investors. EHang also achieved its first positive adjusted net income for the year, highlighting its strong financial performance. Meanwhile, both BofA Securities and Jefferies initiated coverage on EHang with Buy ratings, setting price targets at $26.00 and $30.40, respectively, emphasizing the company’s strategic positioning in the eVTOL market. Deutsche Bank (ETR:DBKGn) upgraded EHang’s stock from Hold to Buy, though it lowered the price target to $20.00, acknowledging the company’s competitive pricing and profitability. EHang announced that recent U.S. tariff changes will not affect its operations, as the company does not export to the U.S. and relies on a secure supply chain. Additionally, EHang’s joint venture in Hefei achieved a significant milestone by obtaining the world’s first pilotless eVTOL air operator certificate from the Civil Aviation Administration of China. These developments underscore EHang’s progress and strategic efforts in the urban air mobility sector.
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