This analyst loves Dragonfly Vitality

Roth Capital Markets analyst Chip Moore mentioned Dragonfly Vitality Holdings (Dragonfly Vitality Holdings Inventory Quote, Chart, Information, Analysts, Financials NASDAQ:DFLI) has emerged from a crucial restructuring section with a strengthened steadiness sheet and a clearer path towards profitability.

In a Nov. 17 replace, Moore reiterated his “Purchase” score and raised his 12-month value goal to US$1.50 from US$1.00, citing improved liquidity, diminished leverage and longer-term upside within the firm’s solid-state manufacturing expertise.

His revised US$1.50 value goal relies on a roughly 2.0x EV/Gross sales a number of on 2026 income. Moore mentioned latest financing and restructuring efforts take away a serious overhang.

“We discover threat/reward beneficial given rising potential for restoration in core finish markets (and extra platform wins), diversification efforts underway (progress beforehand constrained by steadiness sheet), and differentiated solid-state manufacturing IP that may be leveraged longer-term.”

Reno-based Dragonfly manufactures lithium-ion batteries and built-in energy techniques for RVs, marine, off-grid and industrial storage functions. The corporate has spent the previous 12 months managing debt pressures and navigating blended demand traits in its recreational-vehicle markets. Moore mentioned these constraints have now eased considerably.

“We additionally now see assist for extra significant growth of the corporate’s dry electrode expertise (we consider underappreciated by buyers), representing a key supply of longer-term upside potential (near-term concentrate on profitability),” he mentioned.

Dragonfly reported Q3/25 outcomes largely in step with preliminary figures launched in mid-October and barely forward of preliminary steerage, marking its fourth consecutive quarter of year-over-year income development. Income rose 26% year-over-year to US$16.0-million, supported by a 44% enhance in OEM gross sales. Adjusted EBITDA got here in at –US$2.1-million, additionally barely higher than the corporate’s preliminary replace. Gross margin improved to 29.7%, up from 22.6% within the prior 12 months, benefiting from greater volumes and decrease stock prices. Quarter-end money was US$3.8-million previous to subsequent financing occasions.

The extra consequential growth, Moore mentioned, was Dragonfly’s recapitalization effort in October, when the corporate raised US$28.75-million and US$55.4-million in two fairness choices. Proceeds had been used to prepay US$45-million of debt, whereas lenders transformed US$25-million into most well-liked shares and forgave an extra US$5-million. Following these transactions, Dragonfly’s remaining debt stands at US$19-million, maturing in 2027 at a 12% fee. Professional forma money is roughly US$30-million.

“The corporate additionally just lately secured a US patent for core IP round its IntelLigence battery connectivity options, permitting a number of battery techniques to speak through wi-fi mesh expertise,” Moore mentioned.

The near-term outlook displays typical seasonality and softer visibility in direct-to-consumer channels. Dragonfly expects This autumn/25 income of roughly US$13-million and Adjusted EBITDA of about –US$3.3-million. Moore mentioned the inflection level is approaching. “The trail to reaching constructive Adjusted EBITDA now appears in sight for subsequent 12 months, depending on modest quantity development (with new markets anticipated to be a cloth driver – massive fleet announcement anticipated near-term).”

Moore revised his forecasts to replicate up to date demand expectations and the corporate’s concentrate on disciplined spending. He now expects fiscal-2025 income and Adjusted EBITDA of US$58.6-million and –US$11.4-million (beforehand US$63.2-million and –US$9.6-million), enhancing to US$88.6-million and –US$0.3-million in fiscal 2026.

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