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H.C. Wainwright has adjusted its price target for Intrusion Inc. (NASDAQ: INTZ), a cybersecurity company, to $1.00 from the previous $1.50. The firm maintained a Neutral rating on the stock.
This change follows Intrusion's recent business update, which included several positive developments, yet also highlighted ongoing financial challenges.
Intrusion Inc. reported on Wednesday that it had signed seven new clients for its Shield product in the third quarter of 2024 and expanded two additional contracts. Notably, the company secured a $2 million contract with the U.S. Department of Defense for a 12-month period starting in the third quarter of 2024. This contract will incorporate Intrusion Shield, TraceCop, and consulting services to bolster the DoD's security and resilience.
Revenue from the Shield product saw a significant increase, up around 50% from the second quarter of 2024. Intrusion Inc. also updated its financial position, which has been a point of concern for investors. In August, the company filed a $100 million mixed shelf and initiated a small at-the-market (ATM) offering program to address immediate cash needs.
In other recent news, Intrusion Inc. announced a $2 million cybersecurity contract with the U.S. Department of Defense, expected to contribute to the company's earnings in the third quarter of 2024.
The company also reported a 29% sequential increase in Q2 revenue, reaching $1.5 million, attributed to the acquisition of new clients and strong market activity in the Philippines. However, Intrusion Inc. also reported a net loss from operating activities of $2 million for the quarter, marking an 18% improvement sequentially.
In addition, shareholders approved several key proposals at the Annual Meeting, including electing directors, ratifying the appointment of independent auditors, and amending incentive and purchase plans. The company has also made strategic moves, such as the appointment of Dion Hinchcliffe to the Board of Directors and the establishment of a subsidiary in the Philippines.
InvestingPro Insights
Recent InvestingPro data provides additional context to Intrusion Inc.'s financial situation. The company's market capitalization stands at a modest $6.12 million, reflecting its current challenges. Despite the positive developments mentioned in the article, Intrusion's revenue for the last twelve months as of Q2 2024 was $5.42 million, with a concerning revenue growth of -15.41% over the same period.
Two relevant InvestingPro Tips shed light on the company's financial health. First, Intrusion is "quickly burning through cash," which aligns with the article's mention of the company's need for a substantial capital raise. Second, "short-term obligations exceed liquid assets," further emphasizing the financial strain discussed in the report.
On a positive note, Intrusion boasts "impressive gross profit margins," with InvestingPro data showing a gross profit margin of 78.06% for the last twelve months as of Q2 2024. This corroborates the article's mention of gross margins between 75% and 80%.
For investors seeking a more comprehensive analysis, InvestingPro offers 9 additional tips for Intrusion Inc., providing a deeper understanding of the company's financial position and market performance.
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