Maxim Group analyst Matthew Galinko has maintained their neutral stance on CPTN stock, giving a Hold rating yesterday.
Matthew Galinko has given his Hold rating due to a combination of factors including Cepton’s recent financial performance and future projections. Although Cepton has secured a new engineering contract valued at $10 million, the company’s revenue in the first quarter of 2024 was below expectations and its adjusted EBITDA loss, while better than Galinko’s estimate, did not meet the consensus. Additionally, the cancelation of purchase orders by General Motors, a major client, poses a significant setback, despite the partial financial recovery reported in the first quarter.
Furthermore, Cepton’s financial outlook presented by the management suggests potential growth with projected annual revenues increasing by 15% to 91%. However, the timeline for scaling production appears to be several years away, introducing uncertainty about the company’s ability to capitalize on the new contract in the near term. Although the firm’s cash position is deemed sufficient to support operations through 2025, excluding any additional recoveries from the GM cancellation, the balanced risk/reward profile does not justify an upgrade to a Buy rating at this time. Hence, Galinko maintains a Hold rating, reflecting these mixed signals and the uncertain growth timeline.
In another report released yesterday, Craig-Hallum also maintained a Hold rating on the stock with a $3.17 price target.
CPTN’s price has also changed moderately for the past six months – from $3.300 to $2.889, which is a -12.45% drop .
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Cepton (CPTN) Company Description:
Growth Capital Acquisition Corp is a blank check company.
