H.C. Wainwright analyst Scott Buck has maintained their bullish stance on PHUN stock, giving a Buy rating today.
Scott Buck has given his Buy rating due to a combination of factors centering around Phunware’s business transformation and strategic reorientation. He highlights the company’s efforts in streamlining operations and reshaping its balance sheet, which has been cleared of debt through recent capital raises. Moreover, Phunware has successfully reduced its overhead by implementing layoffs and exiting property leases, which has significantly improved its financial structure. By leveraging its location-based services across key sectors and shifting to a transaction-enabled application model, the company aims to offer more value to users and achieve better return on investment for its partners, which is anticipated to lead to new business partnerships.
Buck’s confidence in Phunware also stems from the company’s improved financial position, with a solid cash balance and no outstanding debt. This, combined with a lean cost structure, positions the company to support growth initiatives effectively. Despite a temporary dip in revenue and gross margin, Buck is optimistic about the company’s potential to reach gross margins comparable to other high-performing software companies as the business scales. He believes that as the company demonstrates the effectiveness of its new sales strategy, investor interest in Phunware will be reinvigorated, making it a compelling investment ahead of projected improvements in the latter half of 2024 and into 2025. This optimism is further reflected in the adjustment of the price target to $12, following a reverse share split.
In another report released today, Roth MKM also reiterated a Buy rating on the stock with a $20.00 price target.
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Phunware (PHUN) Company Description:
Phunware, Inc. engages in the development of a Multiscreen-as-a-Service platform, an enterprise cloud platform for mobile. It provides companies the products, solutions, data, and services necessary to engage, manage, and monetize mobile application portfolios and audiences at scale. Its platform also allows for the licensing and creation of category-defining mobile experiences for brands and their application users worldwide. The company was founded by Alan S. Knitowski and Luan Dang in February 2009 and is headquartered in Austin, TX.
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