PAC Partners analyst Caleb Weng maintained a Buy rating on DUG Technology Ltd (DUG – Research Report) yesterday and set a price target of A$2.50.
Caleb Weng has given his Buy rating due to a combination of factors that suggest a positive outlook for DUG Technology Ltd. Despite a reduction in revenue and EBITDA forecasts for FY25, the company is well-positioned for growth in the second half of the year. This is supported by a strong increase in the order book, which rose by 19% from the first quarter to $42.2 million, reversing a previous declining trend. The transition from pilot trials to commercial projects and the adoption of new technology are expected to drive further growth.
Additionally, the shift in cost structure from variable to fixed costs, along with significant investments in operating and capital expenditures, is anticipated to result in margin expansion in the latter half of FY25 and beyond. The reasonable price-to-earnings ratio of 18.4x for FY26, combined with multiple growth catalysts such as increased order book conversion, new technology validation, and significant contract wins, supports the Buy recommendation. These factors collectively indicate a promising future for the company, justifying the positive rating.
Based on the recent corporate insider activity of 10 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of DUG in relation to earlier this year.