Buy Rating Affirmed for VerifyMe: A Mixed Q1 Performance with Strong Outlook and Growth Targets

Michael Petusky, an analyst from Barrington, maintained the Buy rating on VerifyMe (VRME – Research Report). The associated price target was raised to $2.00.

Michael Petusky has given his Buy rating due to a combination of factors including the company’s recent financial performance and its future outlook. VerifyMe’s first-quarter results were a mixed bag, with revenue showing modest growth and missing expectations slightly, yet the company beat estimates on adjusted EPS and EBITDA. The Precision Logistics segment demonstrated growth, contributing significantly to total revenue, despite a decline in the Authentication segment. Importantly, gross margins have substantially improved due to favorable mix and process enhancements within the Precision Logistics segment, and general and administrative expenses were lower than projected, indicating improved operational efficiency.

Looking forward, VerifyMe has maintained its FY/24 guidance, anticipating double-digit growth for both segments and positive operating cash flow. The company’s management is focused on the second half of FY/24 to drive the year’s financials, with expectations of sustained gross margins. In the long term, VerifyMe aims to more than double its annual revenue within five years, with both segments growing at double-digit rates on average. This ambitious plan also includes a target for adjusted EBITDA margins. Petusky’s confidence in the stock is further underscored by raising the price target, reflecting both recent operational improvements and the potential for significant revenue growth in the coming years.

Based on the recent corporate insider activity of 50 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 VRME in relation to earlier this year.

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VerifyMe (VRME) Company Description:

VerifyMe, Inc. engages in the provision of digital and physical solutions. It is able to deliver security solutions for identification and authentication of people, products and packaging in a variety of applications in the security field for physical transactions and owns digital patents which are in the same field. The company was founded by Norman A. Gardner on November 10, 1999 and is headquartered in Rochester, NY.