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On Tuesday, Canaccord Genuity increased its price target on Dragonfly Energy Corp. (NASDAQ:DFLI) to $3.00, up from the previous $1.25. The firm maintained a Buy rating on the stock. According to InvestingPro data, the company currently trades at $1.30, with an overall Financial Health Score labeled as ’WEAK’ and concerning debt metrics, including a debt-to-capital ratio of 85%.
The adjustment by Canaccord Genuity comes after a reassessment of their financial model and the recognition of a longer-than-anticipated path to recovery for Dragonfly Energy. The new target price has been set despite the recent 1 for 9 reverse stock split that the company underwent, which adjusted the pre-split target equivalently to $11.25. InvestingPro analysis reveals the company is rapidly burning through cash, with negative free cash flow of -$7.76 million in the last twelve months and a concerning current ratio of 0.8.
Dragonfly Energy, which specializes in energy storage solutions, has been highlighted by Canaccord Genuity for its potential to significantly alter the cost dynamics within the industry. However, the analyst noted that the company is in need of additional capital to navigate its way through the recovery process. This assessment aligns with InvestingPro’s findings, which show a significant 34% revenue decline and negative EBITDA of -$20.39 million. For deeper insights into Dragonfly Energy’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The revised price target reflects Canaccord Genuity’s confidence in Dragonfly Energy’s future, despite the hurdles it faces. The firm’s analyst George Gianarikas stated, "We reiterate our BUY rating, but are adjusting our $1.25 target (the equivalent of $11.25 following the company’s 1 for 9 reverse stock split) target to $3.00 based on changes to our model and the longer-than-expected road to recovery."
Dragonfly Energy’s journey towards a turnaround and its need for more capital investment is seen as a critical step in providing a much-needed shift in industry cost structures. Canaccord Genuity’s updated price target and continued Buy rating indicate a positive outlook for the company’s stock performance.
In other recent news, Dragonfly Energy Holdings Corp reported a 17% increase in total revenue for Q4 2025, reaching $12.2 million, largely due to a 61% rise in OEM sales. Despite this growth, the company faced a net loss of $9.8 million, or $1.39 per share, highlighting ongoing profitability challenges. The company projects net sales of $13.3 million for Q1 2025 and aims to achieve positive adjusted EBITDA by Q4 2025. Dragonfly Energy has initiated a corporate optimization program, collaborating with Provence, to focus on near-term revenue-generating opportunities and improve operational efficiency. Additionally, the company has restructured its debt, extending maturity to October 2027, which enhances financial flexibility. The company is also exploring significant growth opportunities in the trucking industry, supported by partnerships with fleets such as Stevens Transport and Highway Transport. Dragonfly Energy’s strategic shift towards electrode tape production may face execution risks, but it is seen as a move to capitalize on market opportunities. Lastly, the company has strengthened its distribution network through partnerships with Keystone Automotive and others, expanding its market presence.
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