Jefferies initiates coverage on Tuya stock with Buy rating, cites IoT leadership

Investing.com - Jefferies initiated coverage on Tuya Inc. (NYSE:TUYA) with a Buy rating and a $3.49 price target on Tuesday. According to InvestingPro data, the stock has shown strong momentum with a 67.53% return over the past year, while maintaining a robust financial health score of 2.9 (GOOD).

The research firm identified Tuya as the world’s largest third-party software and hardware IoT platform, connecting 800 million smart devices across more than 200 countries globally.

Jefferies highlighted Tuya’s client base of over 5,000 companies, including major brands like Philips, Haier, and Schneider Electric (EPA:SCHN), noting that platform neutrality, deep technology stack, and compliance credentials represent key competitive strengths.

The firm pointed to generative AI as a potential driver for new IoT products and higher average selling prices for Tuya’s offerings.

Jefferies emphasized Tuya’s attractive valuation metrics, including a 10x 2026 estimated price-to-earnings ratio excluding cash, 0.8x PEG ratio, and approximately 4% dividend yield, while noting that $1 billion of the company’s $1.4 billion market capitalization consists of net cash.

In other recent news, Tuya Inc. announced the grant of restricted share units (RSUs) as part of its 2024 Share Scheme, according to a filing with the United States Securities and Exchange Commission. This move is typically aimed at aligning employee interests with shareholders by linking compensation to the company’s performance. Additionally, Tuya Inc. disclosed a significant transaction involving contractor construction contracts with The Stock Exchange of Hong Kong Limited, which could have implications for its operational and financial outlook. Morgan Stanley (NYSE:MS) has maintained an Overweight rating on Tuya Inc., with a price target of $4.20, expressing confidence in the company’s prospects amid ongoing China-US tariff negotiations. The investment firm anticipates a positive market response in the near term, despite the stock’s recent decline. Furthermore, Tuya Inc. has scheduled a board meeting and set the record date for its annual general meeting (AGM), focusing on corporate governance activities. The board meeting will address typical matters such as financial performance and strategy reviews. These recent developments reflect Tuya Inc.’s ongoing efforts in corporate management and market positioning.

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