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On Wednesday, Stifel analysts reiterated their Buy rating on Spire (NYSE:SR) Global (NYSE:SPIR) shares, maintaining a $20.00 price target for the $270 million market cap company, currently trading at $10.42. According to InvestingPro data, the stock has shown high volatility, with analyst targets ranging from $13 to $24. The firm’s analysts focused on the company’s third-quarter results, which fell short of expectations, but highlighted Spire Global’s achievement of positive free cash flow (FCF) and the securing of $40 million in total contracts for the quarter.
The analysts pointed out two significant developments for Spire Global: the completion of its revenue recognition review and the restatement of prior financials, as well as the advancement towards the sale of its Maritime division. The sale is anticipated to be finalized by mid-April and is seen as a potential catalyst for the company. The divestiture is expected to not only alleviate management’s focus and alleviate customer concerns but also to boost the company’s balance sheet by providing an infusion of cash, even after the repayment of all existing debt, which InvestingPro reports currently stands at $111.12 million with a debt-to-equity ratio of 3.5x.
Stifel’s analysts expressed optimism about the future of Spire Global post-sale, suggesting that it would enable a clearer perspective on the company’s full potential. Their optimism appears well-founded, as InvestingPro data shows the company achieved impressive revenue growth of 31% in the last twelve months. They underscored the prospects for Spire Global to support over 20% revenue growth, maintain gross margins above 70%, and achieve sustained profitability. The analysts concluded by reaffirming their Buy rating on the stock, aligning with the broader analyst consensus of 1.67 (where 1 is Strong Buy and 5 is Strong Sell).
In other recent news, Spire Global reported a 29% increase in revenue for the third quarter of 2024, reaching $28.6 million. Despite an operating loss of $6.1 million, the company improved its financial performance by reducing its loss by 49% compared to the previous year. Spire Global also achieved positive free cash flow of $5.1 million during the quarter. Additionally, Spire plans to sell its maritime business for $241 million, a move expected to be completed in the coming weeks. Analysts at Canaccord Genuity have raised their price target for Spire Global to $15, maintaining a Buy rating, following the company’s restatement of financials and changes in revenue recognition methods. The restatement includes recognizing revenue from Space Services contracts upon data delivery and accounting for R&D services based on the percentage of completion. These developments indicate Spire’s focus on aligning its financial practices with service provision and ongoing contract progress. Investors will be monitoring how these changes impact Spire Global’s financial health moving forward.
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