TD Cowen analyst Charles Rhyee maintained a Hold rating on DarioHealth (DRIO – Research Report) today and set a price target of $1.00.
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Charles Rhyee has given his Hold rating due to a combination of factors affecting DarioHealth’s financial performance. The company’s revenue fell short of expectations, primarily due to a significant contract expiration in their B2B2C segment. This contract is currently up for renewal, and management anticipates that if renewed, it could contribute an additional $1M to $2M in revenue per quarter starting in 2025.
Despite these challenges, DarioHealth has reiterated its goal of achieving cash flow breakeven by the end of 2025, targeting a revenue run rate of $40M to $45M and reducing quarterly operating expenses to approximately $9M. The company has also secured new contracts with major health plans and pharmaceutical clients, although the revenue from these agreements is expected to ramp up gradually. Additionally, the impact of tariffs on hardware manufactured in China has created some revenue headwinds, contributing to the cautious outlook reflected in the Hold rating.