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On Friday, Deutsche Bank adjusted its outlook on shares of accesso Technology Group (ACSO:LN) (OTC: LOQPF), reducing the price target to GBP8.00 from GBP10.00, while retaining a Buy rating on the stock. The revision follows accesso's announcement that it now anticipates fiscal year 2024 (FY24) revenues to range between $150 million and $153 million, a decrease from the previous guidance of no less than $160 million.
The company cited two primary factors for the expected revenue shortfall. Firstly, the delay of new projects for accesso Horizon in the Middle East has impacted the revenue forecast. These projects have been postponed due to changes in operators' schedules that are beyond the company's control.
Since revenue from these projects is recognized upon reaching certain milestones, the completion of pertinent milestones is now projected to extend into fiscal year 2025 (FY25). Despite these delays, accesso does not foresee any increased risk to the overall completion or the contractual value of these projects.
Secondly, accesso reported that recent trading volumes early in the summer season have been lower than anticipated. The updated revenue guidance assumes that this trend of reduced volumes will continue throughout the remaining peak months of the year.
The company's outlook adjustment has led to a recalibration of expectations by Deutsche Bank. However, the firm's Buy rating indicates a continued positive view of accesso's stock potential despite the near-term challenges outlined in the revised guidance.
accesso Technology Group specializes in providing technology solutions to the leisure, entertainment, and cultural markets. The company's performance and financial projections are closely watched by investors as indicators of its growth trajectory and market position.
InvestingPro Insights
In light of Deutsche Bank's updated outlook on accesso Technology Group, real-time data from InvestingPro offers additional context for investors considering the company's stock potential. With a market capitalization of $265.24 million and a robust gross profit margin of 78.31% over the last twelve months as of Q4 2023, accesso's financial stability is reflected in its ability to hold more cash than debt on its balance sheet—one of the InvestingPro Tips that indicates a strong liquidity position.
Moreover, the company's stock is currently trading near its 52-week low and the RSI suggests it's in oversold territory, which could signal a potential buying opportunity for investors, as highlighted by another InvestingPro Tip. While the company is trading at a high earnings multiple with a P/E ratio of 33.61, the adjusted P/E ratio for the last twelve months as of Q4 2023 is slightly lower at 26.43. For investors seeking detailed analysis, there are 12 additional InvestingPro Tips available that can provide deeper insights into accesso's financial health and stock performance.
The InvestingPro Fair Value estimate stands at $9.58, slightly above the previous close price of $9.04, suggesting a potential undervaluation of accesso's shares. As investors digest the revised revenue guidance from accesso and Deutsche Bank's reassessment, these InvestingPro metrics and tips offer valuable data points to consider in evaluating the company's stock.
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