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On Friday, Canaccord Genuity analyst Austin Moeller revised the price target for Spire (NYSE:SR) Global (NYSE:SPIR) shares, reducing it to $14.50 from the previous $15.00, while reaffirming a Buy rating on the stock. According to InvestingPro data, the stock has experienced significant volatility, dropping 15.2% in the past week and trading at $8.87, with analyst targets ranging from $13 to $24. Moeller’s analysis suggests that the recent private placement is a temporary measure for capital until the completion of the Kpler transaction.
Moeller believes that Spire may require additional equity if the Kpler deal does not finalize and they need to seek a new purchaser. While InvestingPro analysis indicates the stock is currently undervalued, financial health metrics show short-term obligations exceeding liquid assets, with a concerning current ratio of 0.4. The terms of Spire and Blue Torch’s amended agreement indicate that the Kpler deal is expected to close by April 30th. This aligns with Spire management’s statements that the sale would likely conclude in the latter half of April.
The analyst also noted that the $40 million raised provides Spire with sufficient funds to maintain operations beyond the anticipated sale of the maritime business, regardless of the outcome. Despite revenue growth of 31% in the last twelve months, the company faces profitability challenges with an EBITDA of -$23.21 million. This financial cushion is expected to last for the next twelve months, given there are no changes in capital expenditures for LEMUR satellite replenishment.Unlock deeper insights into Spire Global’s financial health and growth prospects with InvestingPro, which offers exclusive access to 12 additional ProTips and comprehensive financial analysis through the Pro Research Report.
The new price target of $14.50 reflects the dilutive impact of the equity raise. Moeller’s valuation is based on a 2.0x enterprise value/revenue multiple applied to the firm’s 2025 revenue forecast of $129 million. The adjustment in the price target takes into account the latest financial developments and the near-term outlook for Spire Global, with current revenue at $113 million and a market capitalization of $228.27 million.
In other recent news, Spire Global, Inc. announced a private placement agreement expected to generate $40 million in gross proceeds, with the transaction set to close in March 2025. This involves issuing 5 million shares of Class A common stock and pre-funded warrants at $8.00 and $7.9999, respectively. Concurrently, Spire Global amended its financing agreement with Blue Torch Finance LLC, addressing financial challenges by introducing a minimum EBITDA covenant and revising the recurring revenue leverage ratio. The amendment increases the interest margin by 2.50%, with additional fees applicable if obligations are not met by April 30, 2025.
Stifel analysts maintained a Buy rating on Spire Global with a $20 price target, noting the company’s achievement of positive free cash flow and the securing of $40 million in contracts. They highlighted the anticipated sale of Spire’s Maritime division as a potential catalyst for the company. Additionally, Canaccord Genuity raised its price target for Spire Global to $15, reiterating a Buy rating, following changes in the company’s revenue recognition methods. These developments reflect ongoing adjustments and strategic moves by Spire Global in navigating its financial landscape and growth prospects.
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