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On Tuesday, TD Cowen maintained a Hold rating on Inseego Corp. (NASDAQ: NASDAQ:INSG) but lowered the price target to $10.00 from $13.00. The adjustment follows Inseego’s first-quarter performance, which matched revenue expectations and exceeded adjusted EBITDA estimates. With current revenue of $185.41M and EBITDA of $6.82M, the company’s mobile segment saw an upside, and strong margin performance at 38.04% was noted, although this was tempered by weaker results in Fixed Wireless Access (FWA). According to InvestingPro data, two analysts have recently revised their earnings estimates downward for the upcoming period.
Lance Vitanza of TD Cowen cited the main reasons for the revised forecast, pointing to pressure in the Mobile business due to concentrated carrier exposure. This factor led to a reduction in the second-quarter and full-year 2025 estimates. Despite acknowledging Inseego’s solid progress, Vitanza expressed concerns about the company’s growth narrative, suggesting that the strategy execution remains unproven. InvestingPro analysis supports these concerns, indicating that analysts anticipate a sales decline in the current year.
Inseego’s recent financial report indicated a balance between positive developments and challenges. While the company’s ability to surpass adjusted EBITDA expectations was positive, the stock has fallen significantly over the last three months, with a six-month decline of 27.61%. The softness in the FWA segment led to a more cautious outlook from TD Cowen.
The lowered price target reflects the revised expectations for Inseego’s financial performance in the coming years. Vitanza’s comments highlight a cautious stance on the company’s growth prospects, suggesting that the anticipated ramp-up in business may be more modest than previously expected.
The adjustment in Inseego’s valuation by TD Cowen will likely be of interest to investors monitoring the company’s performance and potential in the competitive tech sector. The new price target of $10 represents the firm’s current view of Inseego’s market position and future earnings potential.
In other recent news, Inseego Corp reported its financial results for the first quarter of 2025, highlighting substantial growth in its services and mobile revenue streams. The company’s services revenue grew nearly 50% year-over-year, and it achieved a record gross margin of 47.5%. Adjusted EBITDA more than doubled compared to the previous year, reaching $3.7 million. Inseego’s cash position remained strong at over $35 million, with total debt reduced to $41 million. The company provided guidance for the second quarter of 2025, projecting revenue between $37 million and $40 million and adjusted EBITDA between $2.5 million and $3.5 million. Additionally, Inseego emphasized its strategic partnerships, notably with Qualcomm (NASDAQ:QCOM), as key drivers of its performance. The company is targeting sequential quarterly revenue growth and aims for positive free cash flow for the year. Inseego’s management expressed confidence in closing a large channel deal this quarter, which could further enhance its financial outlook.
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