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On Tuesday, Oak Ridge Financial initiated coverage on Horizon Aircraft (NASDAQ:HOVR) with a Buy rating and a price target of $2.35, joining other analysts who maintain a Strong Buy consensus with targets ranging from $1.61 to $2.01. The firm’s valuation of Horizon Aircraft is based on a 3.00x EV/Sales metric applied to their fiscal year 2030 estimate. This metric aligns with the valuation methods used for other companies in the Advanced Air Mobility (AAM) and electric vertical takeoff and landing (eVTOL) technology sectors. According to InvestingPro data, the stock currently trades at a P/E ratio of 1.49, suggesting an attractive entry point for investors interested in the emerging AAM sector.
Horizon Aircraft, currently valued at $21.66 million in market capitalization, is developing a hybrid eVTOL aircraft aimed at the regional air mobility (RAM) market. The company recently achieved a significant milestone by successfully completing a full wing transition with its large-scale prototype. This achievement is a crucial step in the development process, showcasing the company’s potential in the emerging AAM market. InvestingPro analysis reveals the company maintains a healthy balance sheet with more cash than debt and a strong current ratio of 7.11, though it’s currently burning through cash reserves.
The company is now in the design phase of its commercial aircraft, the Cavorite X7. This hybrid-electric aircraft will have seven seats and the capability to take off and land vertically, similar to a helicopter. The development of the Cavorite X7 positions Horizon Aircraft among a limited group of competitors striving to capture market share in what is anticipated to be a substantial new market.
The entry of Horizon Aircraft into the AAM market comes at a time when the industry is witnessing rapid advancements in technology and escalating interest from investors. The successful flight test of its prototype and the ongoing design work on the Cavorite X7 indicates Horizon Aircraft’s commitment to becoming a significant player in the sector.
With the Buy rating and a $2.35 price target, Oak Ridge Financial’s outlook on Horizon Aircraft reflects confidence in the company’s future prospects and its role in the growing AAM industry. The stock has shown significant momentum, posting a 50% return over the past week and a 42% gain over the last six months. For deeper insights into Horizon Aircraft’s financial health and growth potential, including 20 additional ProTips and comprehensive valuation metrics, investors can access InvestingPro’s detailed analysis platform.
In other recent news, New Horizon Aircraft Ltd. announced that its shareholders have approved a significant conversion proposal, involving the conversion of Series A preferred shares into Class A ordinary shares. This approval, achieved during a special meeting, reflects strong shareholder support and aligns with Nasdaq Listing Rule 5635. The conversion proposal received 10,271,382 votes in favor, with only 331,441 against, indicating substantial backing for the company’s strategic decisions. This development is expected to influence New Horizon’s capital structure and financing strategy.
Additionally, Horizon Aircraft has successfully achieved the full wing transition of its Cavorite X7 eVTOL prototype. This milestone marks a critical advancement in the development of its hybrid electric aircraft, utilizing its patented fan-in-wing technology. The company’s CEO, Brandon Robinson, confirmed plans to demonstrate these advancements with a full-scale, piloted technical demonstrator currently under construction. The Cavorite X7 aims for enroute speeds of up to 250 mph and operational ranges exceeding 500 miles, targeting the Regional Air Mobility market. Horizon Aircraft’s progress is being closely monitored by investors and industry observers as it continues to prioritize safety and performance in its eVTOL aircraft development.
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