Lake Street Capital Markets revised its price target for LiqTech International (NASDAQ:LIQT), a company specializing in filtration technology, reducing it to $6.00 from the previous $9.00. Despite the reduction, the firm maintains a Buy rating on the stock.
The adjustment comes in the wake of LiqTech's recent capital raise of $10 million, which is intended to bolster the company's growth initiatives and support the working capital needs, particularly in the oil & gas produced water segment. LiqTech, currently in a startup phase, is expected to reach breakeven by mid-2025, as it begins to establish itself in key markets.
LiqTech's market opportunities span across oil & gas produced water, marine, industrial, and pool sectors. The company's unique product offerings have reportedly begun to gain early traction, a sign that the firm's technology is being validated in the marketplace.
Lake Street Capital Markets anticipates that LiqTech will demonstrate revenue growth in the upcoming quarters as customer adoption increases. The firm suggests that LiqTech's successful penetration into new markets could act as a catalyst for the company's shares.
The new price target of $6 reflects the increased number of shares following the capital raise. Lake Street Capital Markets remains optimistic about LiqTech's prospects, expecting the company to show promising developments in the near future.
LiqTech International secured $10 million in private placement funding aimed at supporting commercial development in various sectors. The company's Q2 earnings revealed a 10% decrease in revenue compared to the same period last year, but anticipates growth in upcoming quarters, driven by increased activities in oil and gas, marine scrubber, and swimming pool markets.
LiqTech has also received a significant order for a pilot water treatment system in the US and is establishing partnerships to expand its market presence. Geopolitical instability in the Middle East has led to a shift in focus to the US market, and the company is actively building partnerships to become more competitive in the Korean ship market.
LiqTech is developing new channels and opportunities to expand its system aftermarket solutions. These recent developments reflect LiqTech's ongoing efforts to navigate the market and drive future growth.
InvestingPro Insights
Recent InvestingPro data provides additional context to LiqTech International's financial situation and market performance. The company's market capitalization stands at $13.04 million, reflecting its current valuation in the market. LiqTech's revenue for the last twelve months as of Q2 2024 was $17.72 million, with a revenue growth of 8.53% over the same period. However, the company's operating income for this period was negative at -$8.14 million, indicating ongoing challenges in achieving profitability.
InvestingPro Tips highlight some key concerns for investors. The company is "quickly burning through cash" and "suffers from weak gross profit margins," which aligns with Lake Street Capital Markets' observation about LiqTech being in a startup phase. Additionally, the tip that "analysts do not anticipate the company will be profitable this year" corroborates the expectation that breakeven won't be reached until mid-2025.
Despite these challenges, InvestingPro Tips also note that "liquid assets exceed short term obligations," which could provide some financial flexibility as the company pursues its growth initiatives. Investors considering LiqTech may find value in exploring the additional 7 tips available on InvestingPro for a more comprehensive analysis of the company's prospects.
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