Analyst Peter McNally from Stifel Nicolaus maintained a Buy rating on Seeing Machines (SEE – Research Report) and keeping the price target at p9.60.
Peter McNally has given his Buy rating due to a combination of factors that highlight Seeing Machines’ strategic adjustments and future potential. The company has demonstrated effective cost management, reducing expenses significantly, which positions it on a clear path towards achieving cash flow breakeven within the year. This financial discipline is complemented by a 33% increase in gross profit, despite a slight decline in overall revenue, indicating a favorable shift towards higher-margin OEM software royalties.
Furthermore, the introduction of the new Gen 3 product is expected to be a pivotal factor in boosting future revenue and profitability, especially with its partnership with Mitsubishi. Although the aftermarket division experienced a decline due to production delays, the long-term prospects remain promising. The company’s OEM division has shown robust growth, with revenue increasing by 51% year-over-year, and there is potential for further recovery in the aftermarket segment. McNally maintains a target price of 9.6p, viewing the current valuation as attractive for a market leader in a substantial industry, despite recent industry slowdowns.
Based on the recent corporate insider activity of 14 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 SEE in relation to earlier this year.