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Noble Capital Markets Research Reports Thursday, April 18, 2024

Companies contained in today’s report:

Aurania Resources (AUIAF)/MARKET PERFORM – Regaining its Momentum; Aurania Outlines 2024 Exploration Program
FAT Brands (FAT)/OUTPERFORM – More Development Deals

Aurania Resources (AUIAF/$0.14)
Mark Reichman [email protected] | (561) 999-2272
Regaining its Momentum; Aurania Outlines 2024 Exploration Program
Rating: MARKET PERFORM

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FAT Brands (FAT/$7.1 | Price Target: $25)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
More Development Deals
Rating: OUTPERFORM

New Development Deals. FAT Brands has announced a number of new development deals. We view these announcements positively as they highlight the continued interest by existing and new franchisees for the Company’s portfolio of restaurant themes. The new deals add to the existing 1,100+ pipeline of new locations.

Co-Branding Deal. FAT Brands announced a new development deal to open 40 new franchised Fatburger locations across Northern California in partnership with franchisee California Burger, Inc. Fatburger will be added to 40 existing Round Table Pizza locations over the next 10 years with the first location set to open in 2024.

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Noble Capital Markets Research Reports Wednesday, April 17, 2024

Companies contained in today’s report:

Haynes International (HAYN)/MARKET PERFORM – Shareholders Vote to Approve Haynes’ Pending Acquisition by North American Stainless
Xcel Brands (XELB)/OUTPERFORM – Sets Its Course Toward Profitability

Haynes International (HAYN/$60.53)
Mark Reichman [email protected] | (561) 999-2272
Shareholders Vote to Approve Haynes’ Pending Acquisition by North American Stainless
Rating: MARKET PERFORM

Transaction approved by Haynes stockholders. At a special meeting on April 16, Haynes shareholders voted to approve the company’s pending acquisition by North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A. Acerinox, a leader in the manufacturing and distribution of stainless steel and high-performance alloys, will acquire all the outstanding shares of Haynes for $61.00 per share in an all-cash transaction. 

Closing is expected in the third calendar quarter. The transaction is expected to close in the third calendar quarter of 2024. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on March 18. Remaining closing conditions include approval by the Committee on Foreign Investment in the United States (CFIUS), an interagency committee authorized to review transactions involving foreign investment in the U.S.. Other conditions are receipt of approvals, clearances, or expiration of waiting periods under certain foreign regulatory laws.

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Xcel Brands (XELB/$0.7407 | Price Target: $3)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Sets Its Course Toward Profitability
Rating: OUTPERFORM

A noisy quarter. The company reported Q4 revenue of $2.3 million down year over year, but reflected strong 48% licensing revenue growth. Adj. EBITDA loss of $1.2 million was modestly lower than our estimate. In our view, the full impact of the company’s lower cost, licensing model has not yet been manifested. 

Significant amount of revenue growth initiatives. In our view, the company’s outlook in 2024 appears favorable in terms of revenue and potential swing toward positive adj. EBITDA. The favorable outlook is supported by its joint venture with Christie Brinkley, TWRHLL, which is launching in May; G-III and its launch of Halston in Q3 of 2024; expanding products from C. Wonder and Judith Ripka. 

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Noble Capital Markets Research Reports Monday, April 15, 2024

Companies contained in today’s report:

Aurania Resources (AUIAF)/MARKET PERFORM – Rating Lowered to Market Perform; Moving in the Right Direction
NN, Inc. (NNBR)/OUTPERFORM – A Leading Manufacturer of High-Precision Metal Products

Aurania Resources (AUIAF/$0.16)
Mark Reichman [email protected] | (561) 999-2272
Rating Lowered to Market Perform; Moving in the Right Direction
Rating: MARKET PERFORM

Mineral concession renewal. In March, Aurania filed all appropriate documentation for the renewal of its 42 mineral exploration concessions in Ecuador. The company also filed a request with the government to enter into an agreement for payment of the associated annual concession fees. Aurania’s request was accepted, and the concessions remain in good standing while an agreement is reached. Management anticipates the process could take a couple of months to complete.

The plan forward. Maintaining Aurania’s full concession package is a significant step forward because it will allow the company to advance exploration activities dependent on funding availability and provide time to secure a joint venture or strategic partner to advance the project. Aurania’s management attended the Prospectors & Developers Association of Canada Convention in March which provided an opportunity for Aurania’s management to meet with government officials from Ecuador and potential strategic partners. Given the backdrop of strong metals prices and the significant mineral endowment potential offered by Aurania’s property package, we believe it is only a matter of time before the company secures a partner.

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NN, Inc. (NNBR/$3.89 | Price Target: $6)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
A Leading Manufacturer of High-Precision Metal Products
Rating: OUTPERFORM

Initiating Research Coverage. We are initiating research coverage of NN, Inc. with an Outperform rating and a $6 price target. Under a new management team, NN is implementing a strategic transformation designed to secure new growth, increase profits, and generate free cash flow.

Attractive End Markets. NN competes in growing and attractive end markets across the globe. NN won a record $62.6 million of new business wins in 2023. With a global competitive operational footprint, NN can leverage its collective strengths and procurement scale, in our view. End market diversity helps insulate the Company from a downturn in any one end market.

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Noble Capital Markets Research Reports Friday, April 12, 2024

Companies contained in today’s report:

Cadrenal Therapeutics (CVKD)/OUTPERFORM – Tecarfarin Receives Orphan Drug Designation For Second Indication

Cadrenal Therapeutics (CVKD/$0.436 | Price Target: $4)
Robert LeBoyer [email protected] | (212) 896-4625
Tecarfarin Receives Orphan Drug Designation For Second Indication
Rating: OUTPERFORM

Orphan Designation Received For Circulatory Assist Devices. Cadrenal Therapeutics has received Orphan Drug designation for tecarfarin as an anticoagulant in patients with circulatory-assist devices, including ventricular assist devices (VADs) and total artificial hearts. This is the second Orphan designation for tecarfarin. The first indication, atrial fibrillation associated with end stage renal disease (AFib with ESRD), is expected to begin a Phase 3 trial in 2Q24.

Circulatory Assist Device Patients Do Not Have Effective Anticoagulants. Mechanical devices to assist blood circulation can activate the clotting cascade, putting patients who receive them at risk of clots or thromboembolisms. Commonly used anticoagulants in the direct oral anticoagulant (DOAC) category have not shown efficacy in these patients and have been contraindicated. This leaves the patients at high risk for thromboembolic events and hospitalizations.

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Noble Capital Markets Research Reports Thursday, April 11, 2024

Companies contained in today’s report:

Alliance Resource Partners (ARLP)/OUTPERFORM – Lowering Near-Term Estimates to Reflect More Conservative Pricing and Cost Assumptions
Tonix Pharmaceuticals (TNXP)/OUTPERFORM – Increasing The Focus on Fibromyalgia

Alliance Resource Partners (ARLP/$21 | Price Target: $27)
Mark Reichman [email protected] | (561) 999-2272
Lowering Near-Term Estimates to Reflect More Conservative Pricing and Cost Assumptions
Rating: OUTPERFORM

Updating estimates. We have lowered our 2024 EBITDA and EPU estimates to $841.1 million and $3.90 from $846.9 million and $3.98, respectively. Among our revisions, we have lowered our coal price assumptions, increased our expense estimates, and made minor changes in our unit count. Our estimates remain within the partnership’s guidance ranges and are summarized within this report.

New officer appointment. Mr. Steven Schnitzer recently joined the general partner of ARLP as Senior Vice President, General Counsel and Secretary. Mr. Schnitzer was involved in the 1996 leveraged buy-out of MAPCO Coal, now Alliance Resource Partners, and regularly represented the partnership until 2014 when he left private practice. His experience working with companies in the natural resources and energy transition fields will be helpful as Alliance pursues growth opportunities within and outside its traditional businesses. Most recently, Mr. Schnitzer served as Chief Legal Officer and Secretary of a commercial and industrial solar generation and battery storage developer.

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Tonix Pharmaceuticals (TNXP/$0.17 | Price Target: $1.5)
Robert LeBoyer [email protected] | (212) 896-4625
Increasing The Focus on Fibromyalgia
Rating: OUTPERFORM

We Expect Tonmya To Drive TNXP Forward. Since announcing successful Phase 3 RESILIENT trial data in late December, Tonix has been shifting its development and financial strategy to focus on filing the NDA for Tonmya approval during 2H24. The company has raised capital and plans lower R&D expenses to preserve cash. We have revised our earnings estimates and price target while maintaining our Outperform rating.

Tonix Will Focus On Products For CNS Disorders and Reduce Expenses. Tonix has developed broad pipeline of products in infectious disease, biodefense, and immunology that grew from its original work in neurology and immunology. In the coming year, it will focus on the NDA filing and premarketing activities for Tonmya. We have reduced our clinical expenses estimates, since the large trials have been completed and no late-stage trials are scheduled.

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Noble Capital Markets Research Reports Wednesday, April 10, 2024

Companies contained in today’s report:

QuoteMedia Inc. (QMCI)/OUTPERFORM – Revenue Momentum Slows

QuoteMedia Inc. (QMCI/$0.24 | Price Target: $0.4)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Revenue Momentum Slows
Rating: OUTPERFORM

Q4 results. The company reported softer than expected results in Q4. Revenue and adj. EBITDA were $4.7 million and $0.7 million in the quarter, modestly below our estimates of $5.0 million and $0.9 million, respectively. Q4 revenue growth was 3.1%, a deceleration from 8.5% growth in Q3. We believe that revenue was impacted by lower customer data usage.

Pipeline appears favorable. Management highlighted the shift to first party data as a significant development that should improve the company’s value proposition to clients. Notably, the company has roughly $1.0 million in deferred revenue in the quarter, which will be booked as the business comes on line. 

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Noble Capital Markets Research Reports Tuesday, April 9, 2024

Companies contained in today’s report:

AZZ Inc (AZZ)/MARKET PERFORM – AZZ raises guidance. We raised our numbers two weeks ago.
Ocugen (OCGN)/OUTPERFORM – Phase 3 IND Clearance Is Good News We’ve Been Waiting For

AZZ Inc (AZZ/$81.93 | Price Target: $80)
Michael Heim [email protected] | (314) 308-9711
AZZ raises guidance. We raised our numbers two weeks ago.
Rating: MARKET PERFORM

AZZ raised its FY 2025 guidance. Management increased its estimated sales, adjusted EBITDA, and adjusted diluted EPS by 15-20%. The increase incorporates a $4.5-$5.0 million reduction in financing costs due to the repricing of AZZ’s Term Loan B. It also reflects an expected improvement in results from AZZ’s partially spun off AIS division (40% owned and treated as other income). Management expects $15-$18 million of other income in FY 2025, up from the $13 million we have assumed for FY 2024 (reporting 4/22).

AIS growth reflects increased activity in the Electrical Infrastructure business units. Increased use of data centers, electric grid improvements, and general growth in manufacturing is leading to increased sales. We view higher results as sustainable and have raised our other income estimate for the years beyond FY 2025..

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Ocugen (OCGN/$1.88 | Price Target: $8)
Robert LeBoyer [email protected] | (212) 896-4625
Phase 3 IND Clearance Is Good News We’ve Been Waiting For
Rating: OUTPERFORM

Phase 3 Trial Is Expected to Start Shortly. Ocugen announced that its amended IND for the OCU400 Phase 3 clinical trial has been cleared by the FDA. This allows the clinical trial to start enrolling patients, consistent with previous guidance for an April 2024 start. The company now has 3 clinical trials in progress in its ophthalmic disease programs.

Phase 3 Could Start Immediately. The trial is designed to compare patients treated with OCU400 to untreated controls. There are two arms, one enrolling patients with the RHO mutation and a “gene agnostic” arm enrolling patients who may have any of the mutations associated with RP. Each arm will randomize patients at 2:1, with 50 in each treatment group and 25 in each control group for a total enrollment of 150 patients. Patients will be treated with a single injection of OCU400.

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Noble Capital Markets Research Reports Monday, April 8, 2024

Companies contained in today’s report:

Bitcoin Depot (BTM)/OUTPERFORM – Expansion Ahead of Schedule
Comstock Inc. (LODE)/OUTPERFORM – Accelerating Commercialization Across Multiple Business Lines
The GEO Group (GEO)/OUTPERFORM – New Debt Priced; Raising PT to $17

Bitcoin Depot (BTM/$1.75 | Price Target: $7)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
Expansion Ahead of Schedule
Rating: OUTPERFORM

International expansion. The company recently announced its plans to ship 125 kiosks to Australia’s largest cities, Sydney, Melbourne and Brisbane, in Q2 2024. Notably, we believe there is a sizeable opportunity for growth in Australia, which has a population of approximately 27 million people, and less than 1000 Bitcoin ATM’s in the entire county. In addition to Australia, the company expanded to Puerto Rico in March, adding 87 kiosks.

Franchise opportunities. In our view, the company should benefit from franchising, which offers the company a capital efficient method to expand operations. Notably, the company captures roughly 30%-50% of profits from franchise locations with virtually no capital committed. We view the relatively new franchise program favorably.

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Comstock Inc. (LODE/$0.33 | Price Target: $4)
Mark Reichman [email protected] | (561) 999-2272
Accelerating Commercialization Across Multiple Business Lines
Rating: OUTPERFORM

First quarter 2024 perception report. RB Milestone, Comstock’s investor relations firm, released its first quarter 2024 stakeholder perception report which provides insight into Comstock’s operational milestones and strengths and weaknesses as perceived by stakeholders. The accompanying presentation highlighted the achievement of significant company milestones, notably in its Metals and Fuels segments. An underreported point made during the presentation is that Comstock has approximately $225 million of net operating loss tax carry-forward that may be used to offset gains from sales of non-core assets and future profits.

Growing customer commitments. During the first quarter, Comstock Metals received all permits for its solar panel recycling facility and began commissioning the plant. Comstock Metals has received over 60 tons of end-of-life solar panels for which it has received cash and expects to begin recognizing revenue in the second quarter as the panels are processed. Supplier commitments have exceeded expectations and Comstock is preparing permits for its first industry-scale facility.

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The GEO Group (GEO/$15.14 | Price Target: $17)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
New Debt Priced; Raising PT to $17
Rating: OUTPERFORM

Upsized and Pricing. The GEO Group announced a private offering of $1.275 billion of senior notes, comprised of $650 million 8.625% notes due 2029 and $650 million 10.25% notes due 2031. GEO had originally sought to raise $1.2 billion. The Company also announced a new $450 million Term Loan B bearing interest at SOFR plus 5.25%. Net proceeds are anticipated to be $1.67 billion.

6.50% Convertible Notes. The Company also announced it is exchanging $177 million principal amount of its 6.50% Exchangeable Senior Notes due 2026, representing about 77% of the outstanding principal amount. GEO will pay cash and common stock for the estimated $305 million market value of the Notes, with the cash portion expected to be $177 million. At the current stock price, the remaining $128 million of principal amount would be exchanged for approximately 9.1 million GEO shares.

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Noble Capital Markets Research Reports Thursday, April 4, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – A Slight Improvement in March
The GEO Group (GEO)/OUTPERFORM – Proposed Refinancing

Bit Digital (BTBT/$2.42 | Price Target: $4.5)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
A Slight Improvement in March
Rating: OUTPERFORM

Mining Business. Bit Digital produced 136.4 BTC during the month of March, a 6% increase from 128.7 BTC in the month of February. The active hash rate for the Company was 2.76 EH/s compared to 2.73 EH/s last month. We believe the Company is still on track towards its active mining fleet goal of 6.0 EH/s by the end of 2024.

Staking Side and AI. Approximately 3,008 ETH was actively staked in native staking protocols as of March 31, 2024. This is a decrease from the 12,384 natively staked last month due to the Company changing its provider for native staking solutions. The Company earned a blended APY of approximately 2.8% on its staked ETH during the month and earned aggregate staking rewards of approximately 29.0 ETH. As of March 31, 2024, the Company had 251 servers actively generating revenue on its AI contract, with an estimated $4.3 million of revenue earned during the month.

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The GEO Group (GEO/$14.06 | Price Target: $15)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Proposed Refinancing
Rating: OUTPERFORM

Proposed Refinancing. The GEO Group is proposing to issue $1.2 billion of senior notes, comprised of $700 million of senior secured notes due 2029 and $500 million of senior unsecured notes due 2031 in a private offering. The Company also is seeking a new $400 million Term Loan B under a new senior secured credit facility.

Use of Proceeds. The proceeds will be used to refinance approximately  $1.5 billion of existing indebtedness, including to fund the repurchase, redemption or other discharge of the Company’s existing Tranche 1 Term Loan and Tranche 2 Term Loan under its existing senior credit facility, the 9.50% senior second lien secured notes, the 10.50% senior second lien secured notes, and the 6.00% senior notes due 2026. Other uses are to pay debt related transaction fees and expenses and for general corporate purposes.

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Noble Capital Markets Research Reports Wednesday, April 3, 2024

Companies contained in today’s report:

Century Lithium Corp. (CYDVF)/OUTPERFORM – Clayton Valley Lithium Project Feasibility Study Expectations
Ocugen (OCGN)/OUTPERFORM – Progress In Clinical Trials Overshadows FY2023 Filing Delay
Onconova Therapeutics (ONTX)/OUTPERFORM – Transaction Forms A New Company In Virology and Oncology
Snail (SNAL)/OUTPERFORM – Nearing The Berth Of Ark

Century Lithium Corp. (CYDVF/$0.6126 | Price Target: $2.95)
Mark Reichman [email protected] | (561) 999-2272
Clayton Valley Lithium Project Feasibility Study Expectations
Rating: OUTPERFORM

Feasibility study expected shortly. Century’s Clayton Valley lithium project is among the most advanced pre-permitted lithium projects in North America. In 2023, the company focused on pilot plant operations with the results of a project feasibility study (FS) expected to be released within the next couple of weeks. The full report will be available approximately 45 days later. While production is expected to be consistent with the earlier preliminary feasibility study (PFS), we expect a phased approach to full scale production.

Feasibility study expectations. While we expect the feasibility study to reflect higher capital and operating costs, the economics may improve relative to the PFS due to several factors. These include: 1) a higher base case pricing assumption for lithium carbonate equivalent that could be in the range of US$22,000 to US$30,000 per tonne compared to US$9,500 per tonne used in the PFS, 2) a potential economic benefit from the by-product sales of sodium hydroxide, 3) the leaching process will be based on using hydrochloric acid instead of sulfuric acid, and 4) the project will likely incorporate lower cost renewable power. 

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Ocugen (OCGN/$1.38 | Price Target: $8)
Robert LeBoyer [email protected] | (212) 896-4625
Progress In Clinical Trials Overshadows FY2023 Filing Delay
Rating: OUTPERFORM

10-K Filing Has Been Delayed. Ocugen announced that it has not filed its 10-K for FY2023 and will be restating FY2022 and first three quarters of FY2022. The restatement is due to errors in non-cash cost recognition related to collaborative agreements. We do not believe these restatements affect operating cash flow for these periods or the current cash balance. Cash on December 31, 2023, was reported at $39.5 million, which we estimate is sufficient to fund operations through 4Q24.

OCU400 Phase 3 Trial Is Expected To Begin Shortly. Ocugen reported that it is awaiting final clearance from the FDA to begin its Phase 3 trial testing OCU400 in retinitis pigmentosa (RP). Although timing of FDA actions can be unpredictable, patient treatment is expected to begin during April 2024. The trial will test OCU400 in RP with an enrollment of 300 patients, divided into an arm with the RHO mutation and a “mutation agnostic” arm with any RP-associated mutation. Each will randomize patients 2:1, with 50 treated patients and 25 control patients in each arm.

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Onconova Therapeutics (ONTX/$0.9953 | Price Target: $6)
Robert LeBoyer [email protected] | (212) 896-4625
Transaction Forms A New Company In Virology and Oncology
Rating: OUTPERFORM

Onconova Merges With Trawsfynydd Therapeutics To Form Traws Pharma, Inc. Onconova announced a business combination with Trawsfynydd Therapeutics, a private company developing products for influenza and COVID-19. The new company will be called Traws Pharma Inc, and will add antivirals to narazaciclib and rigosertib. Upon completion, it will raise $14 million in a private placement to bring its cash balance to about $28 million.

Combination Brings New Drugs With Several Near Term Milestones. Trawsfynydd brings antiviral drugs for influenza and COVID-19. TRX100 (viroksavir) inhibits the cap-dependent endonuclease required by the influenza virus for replication. Preclinical studies have shown efficacy against wild-type virus and strains that have resistance to current drugs. It has completed Phase 1, with data showing safety, tolerability, and pharmacokinetics that have potential dosing advantages. A dose-extension study will evaluate two increased doses. Following dose selection, Phase 2 is expected to begin in 2H24.

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Snail (SNAL/$1.05 | Price Target: $9)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
Nearing The Berth Of Ark
Rating: OUTPERFORM

Noisy Q4 results. The company reported Q4 revenue of $28.6 million, below our estimate of $31.6 million. Adj. EBITDA for the quarter was $3.6 million, substantially lower than our estimate of $12.4 million. The results were driven by higher than expected deferred revenue and engine fees. Notably, deferred revenue will be recognized as DLC packages included in the sale of ARK: Survival Ascended (ASA) are released.

Deferred revenue recognition. The deferred ASA revenue will be split evenly across the five DLCS that are included in the game and recognized as the DLCs are released. Three of the DLCs included in ASA will be released in 2024 (Q2, Q3, Q4) with the remaining two expected in 2025. Simply put, revenues are being deferred, but not all of the associated costs are being deferred. 

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Noble Capital Markets Research Reports Tuesday, April 2, 2024

Companies contained in today’s report:

AdTheorent (ADTH)/MARKET PERFORM – Is A Sweetened Offer Possible?
Energy (ENERGY) – Energy stocks rise with oil prices
Snail (SNAL)/OUTPERFORM – Underlying Trends Appear Favorable

AdTheorent (ADTH/$3.28)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Is A Sweetened Offer Possible?
Rating: MARKET PERFORM

Definitive merger agreement. On April 1, 2024, the company announced it has entered into a definitive merger agreement to be acquired by privately held Cadent, LLC, a subsidiary of Novacap, for $324 million. The merger is an all cash transaction at $3.21 per share. Notably, the ADTH shares have increased roughly 160% over the past six months and currently trade slightly above the offering price.

Terms of the agreement. The merger agreement includes a 33-day go-shop period, which allows the company to solicit alternative acquisition proposals until its expiration at 11:59 pm ET on May 4. The agreement includes a termination fee of approximately $11.4 million. Importantly, accepting a superior deal during the go-shop window would lower the termination fee to roughly $6.5 million. Pending shareholder approval, the transaction is expected to be completed by the third quarter of 2024.

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Energy
Michael Heim [email protected] | (314) 308-9711
Energy stocks rise with oil prices

Energy stocks outpaced the general overall market in the March quarter due to a rise in oil prices. Higher oil prices reflect improving global economics and Middle East concerns. Natural gas prices continued to fall due to warm weather and high storage levels.

The United States is ramping up the export of oil and liquified natural gas. Oil exports have helped offset a reduction in  OPEC exports. The United States, once a large importer of LNG, is now the largest exporter. LNG exports have helped European countries replace gas from Russia.

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Snail (SNAL/$1.05 | Price Target: $9)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
Underlying Trends Appear Favorable
Rating: OUTPERFORM

Noisy Q4 results. The company reported Q4 revenue of $28.6 million and missed our estimate of $31.6 million. Adj. EBITDA for the quarter was $3.6 million, substantially below our estimate of $12.4 million. Figure #1 Q4 Results illustrates the company’s recent performance. Notably, the results were driven by higher than expected deferred revenue, related to DLC packages included in the sale of ARK: Survival Ascended (ASA). 

Deferred revenue recognition. The deferred ASA revenue will be split evenly across the five DLCS that are included in the game and recognized as the DLCs are released. Three of the DLCs included in ASA will be released in 2024 (Q2, Q3, Q4) with the remaining two expected in 2025. 

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Noble Capital Markets Research Reports Monday, April 1, 2024

Companies contained in today’s report:

Metals & Mining (Metals & Mining) – Metals & Mining First Quarter 2024 Review and Outlook
Orion Group Holdings (ORN)/OUTPERFORM – New York NDRS; Raising Price Target
Schwazze (SHWZ)/OUTPERFORM – Fourth Quarter and Full Year 2023 Results
Townsquare Media (TSQ)/OUTPERFORM – Alleviates A Stock Overhang

Metals & Mining
Mark Reichman [email protected] | (561) 999-2272
Metals & Mining First Quarter 2024 Review and Outlook

Relative performance. During the first quarter, mining companies (as measured by the XME) appreciated 0.8% compared to a gain of 10.2% for the S&P 500 index. The VanEck Vectors Gold Miners (GDX) and Junior Gold Miners (GDXJ) ETFs were up 2.0% and 2.2%, respectively. Gold, silver, and copper futures prices gained 8.8%, 4.5%, and 3.1%, respectively, while zinc, lead and nickel declined 5.6%, 1.6%, and 1.2%. Central Banks around the world added to global gold reserves in January with demand expected to remain durable throughout 2024 due in part to a desire among some nations to diversify away from the U.S. dollar as the benchmark reserve currency.

Precious metals outlook. The U.S. Federal Reserve maintained its benchmark overnight borrowing rate at its March meeting and signaled the potential for rate cuts in 2024. Inflation appears to be moderating. The core personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of inflation, was up 2.8% from February 2023 to February 2024, following a 2.9% increase from January 2023 to January 2024. The outlook for the gold price remains constructive due to expectations of one or more rate cuts in 2024, continued geopolitical uncertainty, concerns about the growth in U.S. deficit spending and the national debt, and increasing investments in gold by central banks. To some degree, lower rate expectations may already be factored into the price of gold.

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Orion Group Holdings (ORN/$8.2 | Price Target: $10)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
New York NDRS; Raising Price Target
Rating: OUTPERFORM

NYC NDRS. We hosted Orion CEO Travis Boone and CFO Scott Thanisch for a series of investor meetings in NYC last week. The key takeaway for us was management’s confidence in being able to capitalize on the significant upcycle in marine construction spending over the next several years.

Phase 2. Having completed Phase 1 of “righting the ship” in 2023, Orion is onto Phase 2 of its strategic plan: driving growth potential. Management highlighted numerous industry tailwinds across both business segments. Notably, the pipeline of opportunity has grown to over $11 billion from just $3 billion twelve months ago.

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Schwazze (SHWZ/$0.82 | Price Target: $4)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Fourth Quarter and Full Year 2023 Results
Rating: OUTPERFORM

A Challenging Year. 2023 was a challenging year in both the Colorado and New Mexico markets highlighted by increasing competition and a supply/demand imbalance. In spite of the conditions, Schwazze continued to outperform the markets, a testament to management’s operating playbook, in our view.

4Q23. Revenue totaled $43.2 million, up from $40.1 million in 4Q22, but down sequentially reflecting typical seasonality. We had forecast $44.8 million. Driven by some one time charges, Schwazze reported a net loss of $30.9 million in 4Q23, or a loss of $0.43 per share, compared to a loss of $29.8 million, or a loss of $0.57 per share, last year. We had estimated a net loss of $10.1 million, or a loss of $0.13 per share.

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Townsquare Media (TSQ/$10.98 | Price Target: $21)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Alleviates A Stock Overhang
Rating: OUTPERFORM

Repurchases shares. The company announced that it has repurchased and will retire 1.5 million of its shares from MSG National Properties for a $9.76 per share, or an attractive 11% discount from its closing price on March 29th. We believe that the repurchases alleviates a large overhang for the TSQ shares, with MSG now owning less than 200,000 shares post the repurchase. The move follows a 1.5 million share repurchase from MSG in June 2023 at $9.70 per share. 

Financially capable. As of December 31, there was $61 million in cash and it generated significant cash flow of $68 million last year. Furthermore, its debt leverage has been coming down, currently 4.4 times adj. EBITDA from over 5 times just 2 years earlier. Given its improving fundamental outlook, the board recently increased its annual dividend to $0.79 per share, offering a current annualized dividend yield at an attractive 7.2%. 

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Noble Capital Markets Research Reports Thursday, March 27, 2024

Companies contained in today’s report:

PDSB Biotechnology (PDSB)/OUTPERFORM – FY2023 Results Included Changes In Development Strategy
Government Solutions – Additional Funding for ICE

PDS Biotechnology (PDSB/$3.85 | Price Target: $17)
Robert LeBoyer [email protected] | (212) 896-4625
FY23 Results Included Changes In Development Strategy
Rating: OUTPERFORM

FY2023 Financial Results Included Updated Clinical Trial Strategy. PDS Reported a FY2023 loss of $44.3 million or $(1.43) per share, with cash on December 31, 2023, of $42.9 million. Importantly, the company changed its clinical development plan for PDS1010 and PDS01ADC. The Phase 3 VERSAMUNE-003 will not begin as we expected in 1H24. A Phase 3 trial testing the Triple-Therapy combination will be conducted instead. 

Decision Was Driven By Data From Two Trials. PDS has completed two Phase 2 trials, its VERSATILE-002 trial and the Triple Combination Study conducted by the National Cancer Institute (NCI). VERSATILE-002 trial tested the combination of PDS0101 with Keytruda (pembrolizumab, a PD-1 checkpoint inhibitor), while the Triple Therapy Trial tested PDS0101, a checkpoint inhibitor, and PDS01ADC, a proprietary IL-12-derived molecule.

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Government Solutions Industry Report
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Additional Funding for ICE
Rating: OUTPERFORM

2024 Budget. The 2024 budget signed by President Biden significantly increases ICE funding, which could have positive implications for both CoreCivic and The GEO Group. The ICE budget increased $798 million to $9.6 billion, including $5.1 billion for ICE Enforcement and Removal Operations, a $900 million increase, according to the Homeland Security Fiscal 2024 bill summary. ATD funding increased $27.5 million to $470.2 million.

Additional Beds. Detention beds increased to 41,500 from 34,000 in fiscal 2023. We would note, the number of people detained by ICE has exceeded the 34,000 funding amount since mid-August and was 39,111 as of March 10th. At a minimum, the new budget enables ICE to increase detainees by approximately 3,000 and if the recent past is any indication, the actual number of beds in use could easily top the 41,500 level.

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Noble Capital Markets Research Reports Wednesday, March 27, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Potential Expansion of AI Contract
Direct Digital Holdings (DRCT)/MARKET PERFORM – Hits The Reset Button
Labrador Gold Corp. (NKOSF)/OUTPERFORM – Take-Aways from a Recent Management Presentation
Lifeway Foods (LWAY)/MARKET PERFORM – Momentum Increasing Stock Price, Moving to Market Perform
Xcel Brands (XELB)/OUTPERFORM – Opportunistically Fills Its Coffers

Bit Digital (BTBT/$2.28 | Price Target: $4.5)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Potential Expansion of AI Contract
Rating: OUTPERFORM

More GPUs. Yesterday, Bit Digital received a proposal from the Company’s existing customer in Bit Digital AI to expand the scope of its agreement. The proposal calls for an additional 2,048 GPUs, amounting to a total of 4,096 GPUs under the amended agreement. Management intends to accept the proposal, subject to agreement on certain terms and conditions.

Revenue Potential. The current contract before the potential upsize has an annualized revenue run-rate of $50 million. If the proposal is fully realized, the Company would be close to, or meet, its goal of $100 million of annualized revenue by the end of 2024, in our view. Recall, management noted an additional $60 million of capital would be needed to get to the $100 million target through acquiring the necessary GPUs, based on current market conditions.

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Direct Digital Holdings (DRCT/$26.51)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
Hits The Reset Button
Rating: MARKET PERFORM

Q4 miss. The company reported disappointing Q4 results with revenue of $41.0 million and adj. EBITDA of $2.3 million. Both figures were well below our estimates of $67.9 million and $6.4 million, respectively. The underperformance was largely driven by system changes that the company made to its Sell-side segment during the quarter.

Re-positioning for the future. During the quarter, the SSP underwent technological changes to enable it to process ad impressions using alternative IDs. This transformation was necessary for the company to prepare for the impending cookie deprecation, which Google is expected to implement later this year.

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Labrador Gold Corp. (NKOSF/$0.1236 | Price Target: $0.5)
Mark Reichman [email protected] | (561) 999-2272
Take-Aways from a Recent Management Presentation
Rating: OUTPERFORM

Focus on Newfoundland. Labrador Gold’s President and Director, Dr. Roger Moss, recently delivered a presentation to the Toronto Geological Discussion Group entitled “The Kingsway Gold Project: Acquisition and Exploration in the Newfoundland Gold Rush.” Labrador Gold is advancing its flagship Kingsway gold project in the Central Newfoundland Gold Belt. The company is nearing completion of a 100,000-meter drilling program targeting high-grade gold mineralization along a 12-kilometer section of the Appleton Fault Zone with assays still pending. 

A retrospective. Dr. Moss discussed Labrador Gold’s history from its founding in 2017, when it was focused on gold in the Florence Lake Greenstone Belt at its Hopedale project in Labrador, to its March 2020 acquisition of its flagship Kingsway project in Newfoundland. While Labrador has funded exploration at both projects, drilling has centered on Kingsway in recent years. During the Q&A, Dr. Moss indicated that following several years of drilling at Kingsway, the company may take some time to evaluate and analyze results to date before embarking on the next phase of drilling at Kingsway.

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Lifeway Foods (LWAY/$19.16)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Momentum Increasing Stock Price, Moving to Market Perform
Rating: MARKET PERFORM

Moving to Market Perform. With the shares shooting past our recently raised $16 price target, we are lowering our rating to Market Perform from Outperform. LWAY shares over the last month have increased from $12.31 to $19.16 as of yesterday’s close.

Momentum in 2024. Year-to-date, LWAY shares have increased 42.9%. Over the last five trading days, average daily volume (ADV) has been just over 221,565 shares. The last three months have had an ADV of 59,642. We believe the increased volume is a reflection on the Company’s operational performance, with the Company recently capping a record year in revenue. The takeover speculation still looms around the Company, which also could be a driver of the price.

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Xcel Brands (XELB/$0.7997 | Price Target: $3)
Michael Kupinski [email protected] | (561) 994-5734
Opportunistically Fills Its Coffers
Rating: OUTPERFORM

Additional capital secured. On March 15, 2024, the company announced the completion of a secondary offering, which raised expected net proceeds of $2.2 million. In our view, there were several reasons for the offering, including funding start up costs for potential strategic partnerships in the pipeline, and gaining institutional interest. We view the capital raise favorably and believe it could enhance both revenue and cash flow growth.

Strategic partnerships. In December 2023, the company announced an exciting strategic partnership with Christie Brinkley to develop a lifestyle and apparel brand, TWRHLL, for distribution in retail and livestream commerce. Notably, Christie Brinkley will serve as the face of the brand and will make media appearances to promote TWRHLL’s product release, which is scheduled for spring 2024. Notably, Ms. Brinkley’s star power could illuminate the company’s new platform, ORME.

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Noble Capital Markets Research Reports Tuesday, March 26, 2024

Companies contained in today’s report:

Bitcoin Depot (BTM)/OUTPERFORM – A Set Up Year For Future Growth
DLH Holdings (DLHC)/OUTPERFORM – Another CMOP Update
ZyVersa Therapeutics, Inc. (ZVSA)/OUTPERFORM – FY23 Reported With Reiteration of Milestones For Kidney and Inflammasome Trials

Bitcoin Depot (BTM/$10.97 | Price Target: $14)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann [email protected] |
A Set Up Year For Future Growth
Rating: OUTPERFORM

Q4 results. For Q4 the company reported $148.4 million in revenue, below our forecast of $157.0 million and roughly flat compared to the prior year period. Adj. EBITDA  for the quarter was $9.0 million, which was in line with our estimate. The softer than expected revenue was largely driven by the company’s redeployment of kiosks. Notably, we believe the company’s favorable redeployment efforts could improve operating results in the long-run.

Expansion strategy. Management highlighted franchising as a favorable option for expansion. Notably, franchising offers the company a less capital intensive method for expansion, which captures approximately 30%-50% of profits from licensed kiosks. Additionally, management views New York as a significant opportunity for growth, and is currently in the application process to obtain a license to operate in the state.

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DLH Holdings (DLHC/$3.21)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Another CMOP Update
Rating: OUTPERFORM

More Changes? The Veterans Administration appears to be making more changes to the Consolidated Mail Outpatient Pharmacy contract process. The procurements were set-aside for a service-disabled veteran owned small business as the prime contractor with each of the eight procurements being evaluated separately for 5-year contracts. On March 14th, the VA issued a notice for services for durations of up to three months.

Background. In an extended process, the VA is again seeking to complete a re-bid and award of the CMOP contracts. In January 2023 DLH and other parties submitted bids for the eight separately competed procurements pertaining to the program. Recall, DLH has operated under a series of “bridge” contracts since 2016. Most recently, the VA extended these contracts through April 30, 2024.

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ZyVersa Therapeutics, Inc. (ZVSA/$1.88 | Price Target: $10)
Robert LeBoyer [email protected] | (212) 896-4625
FY23 Reported With Reiteration of Milestones For Kidney and Inflammasome Trials
Rating: OUTPERFORM

ZyVersa Reported FY2023. ZyVersa Reported a FY2023 loss of $106.2 million or $(108.97) per share, including write-downs of In-process Research and Development of $81.4 million and Goodwill of $11.9 million that were recorded with the reverse merger in December 2022. Excluding these items, the operating loss would have been $14.4 million. Cash on hand was $3.1 million on December 31, and does not include $2.7 million from warrant exercise reported during February 2024.

ZyVersa Has Made Progress Toward Starting VAR 200 Clinical Trials. ZyVersa announced the selection of a CRO and approval by an Institutional Review Board (IRB). These are steps required to start the Phase 2a clinical trial for VAR 200, its lead molecule for modulating cholesterol and lipid accumulation in the kidney that starts damage and declining function pathways. VAR 200 is expected to begin treating patients with diabetic kidney disease in 1H24.

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Noble Capital Markets Research Reports Monday, March 25, 2024

Companies contained in today’s report:

Comtech Telecommunications (CMTL)/MARKET PERFORM – Some Encouraging News
Haynes International (HAYN)/MARKET PERFORM – Special Shareholder Meeting is Scheduled for April 16
One Stop Systems (OSS)/MARKET PERFORM – Reports Fourth Quarter and Fiscal Year Results

Comtech Telecommunications (CMTL/$3.21)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Some Encouraging News
Rating: MARKET PERFORM

New T&W President. Thursday after the market close, Comtech announced the hiring of Jeff Robertson as the Company’s new President of the Terrestrial and Wireless Networks business segment. Prior to joining Comtech, Mr. Robertson served as President and CEO of Intrado Life Safety, a firm specializing in first responder technology in North America.

Significant News. We view the hiring of Mr. Robertson positively on a couple of fronts. First, Intrado is a direct competitor to Comtech and we expect Mr. Robertson to be familiar with Comtech’s T&W capabilities. Mr. Robertson’s choice of joining Comtech speaks positively about Comtech’s T&W business, in our view. Secondly, his hire indicates that top level executives still view Comtech as an attractive option to work, even given the recent challenges.

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Haynes International (HAYN/$60.03)
Mark Reichman [email protected] | (561) 999-2272
Special Shareholder Meeting is Scheduled for April 16
Rating: MARKET PERFORM

Special meeting of stockholders. Haynes International recently filed definitive proxy materials in anticipation of a special meeting of stockholders to vote on the company’s proposed merger with North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A. Acerinox is a leader in the manufacturing and distribution of stainless steel and high-performance alloys and will acquire all the outstanding shares of Haynes for $61.00 per share in an all-cash transaction. The special meeting of stockholders of Haynes International will be held virtually on Tuesday, April 16, 2024, at 9:30 am ET. Haynes stockholders of record as of the close on March 11 are entitled to vote the shares of Haynes International common stock held on the record date.

Closing is expected in the third calendar quarter. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on March 18. Remaining closing conditions include approval of the merger under other applicable foreign investment laws and the adoption of the merger agreement by Haynes’ stockholders. The transaction is expected to close in the third calendar quarter of 2024.

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One Stop Systems (OSS/$3.24)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Reports Fourth Quarter and Fiscal Year Results
Rating: MARKET PERFORM

A Transformational Year. 2023 was a transformational year for OSS. The low margin digital business went away, a new management team and Board members were installed, and the Company is now firmly focused on large and rapidly growing global markets driven by AI and ML.

4Q23 Results. Revenue totaled $13.2 million, slightly above our $13 million estimate, but down 28% y-o-y, reflecting the continued runoff of the Disguise business, which contributed $3.1 million of revenue in the year ago quarter. Gross margin, however, rose 640 basis points to 33.7%. OSS net loss was $277,560, or a loss of $0.01/sh in the quarter, compared to a net loss of $3.3 million, or a loss of $0.16/sh last year. Adjusted EPS was $0.01/sh compared to a net loss of $0.14/sh last year. We had forecasted a loss of $0.07/sh.

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Noble Capital Markets Research Reports Friday, March 22, 2024

Companies contained in today’s report:

1·800·Flowers.com, Inc. (FLWS)/OUTPERFORM – Very Near Term View A Little Less Rosy
AZZ Inc (AZZ)/MARKET PERFORM – Stock due for a pause after recent strength, rating lowered
Eledon Pharmaceuticals (ELDN)/OUTPERFORM – First Transplant Of A Pig Kidney Uses Tegoprubart To Prevent Immune Rejection
Snail (SNAL)/OUTPERFORM – Media Strategy Potentially Reaches New Audiences

1·800·Flowers.com, Inc. (FLWS/$10.97 | Price Target: $14)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Very Near Term View A Little Less Rosy
Rating: OUTPERFORM

Highlights from New York NDR. This report features a recent Non-Deal Roadshow in New York with Bill Shea, Chief Financial Officer, and Andy Milevoy, Sr. Vice President, Investor Relations. In our view, the fireside chat discussion highlighted the dynamic revenue and cash flow growth opportunities, both organically and through acquisitions, and its solid financial position, all against the backdrop of favorable, long term secular trends toward e-commerce.  

Very near term challenges. While most commodities have moderated, the company is still adversely affected by stubbornly high cocoa and sugar prices. Cocoa prices are not likely to moderate until 2025, a factor of drought conditions in Africa. In addition, while ocean freight prices are likely to be constrained as new ships come on line, domestic shipping costs are expected to increase. 

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AZZ Inc (AZZ/$82.06 | Price Target: $75)
Michael Heim [email protected] | (314) 308-9711
Stock due for a pause after recent strength, rating lowered
Rating: MARKET PERFORM

We are lowering our rating on the shares of AZZ to Market Perform with the stock solidly above our price target. The shares of AZZ have risen sharply in recent months and now trade above our $75 price target. At current prices, the shares trade at 16 times our recently raised fiscal 2025 earnings estimate, a multiple similar to its peers. Our investment premise for the shares of AZZ had been that its multiples would expand as the company’s balance sheet improved. This has largely come true.

A Market Perform rating does not mean we think the stock wont continue to rise. The company continues to report favorable results and lay the foundation for future growth. Construction of a new factory is nearing completion and financing costs are decreasing. A recent debt refinancing is expected to reduce financing costs by $5 million allowing us to raise our fiscal 2025 earnings estimate. With sales growing at a 3-5% rate and margins rising with a shift towards AZZ’s Metal Coating business, we expect solid earnings growth over the next few years.

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Eledon Pharmaceuticals (ELDN/$1.88 | Price Target: $10)
Robert LeBoyer [email protected] | (212) 896-4625
First Transplant Of A Pig Kidney Uses Tegoprubart To Prevent Immune Rejection
Rating: OUTPERFORM

First Transplant Of A Genetically Modified Kidney To A Human. Eledon announced that tegoprubart, its drug in development to prevent organ transplant rejection, was used in the first transplant of an engineered pig kidney into a human patient. The kidney was genetically engineered by eGenesis, Inc, a company that has been collaborating with Eledon. Tegoprubart is currently in a Phase 2 clinical trial testing it against tacrolimus in prevention of kidney transplant rejection.

Eledon Has A Research Collaborated With eGenesis. The pig kidney was engineered by eGenesis, Inc, a company that formed a research collaboration with Eledon in January 2023. eGenesis has proprietary technology for engineering genetic changes to animal organs to make them compatible for transplantation into humans. As described in our Research Note on October 16, these genetic changes reduce the cross-species immunological barriers. The agreement allows eGenesis to use tegoprubart in its xenotransplantation research.

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Snail (SNAL/$1.01 | Price Target: $9)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Media Strategy Potentially Reaches New Audiences
Rating: OUTPERFORM

Delivers animated series.  The company’s highly anticipated series, ARK: The Animated Series, which stars Academy Award winning actors Michelle Yeoh and Russell Crowe, is now available on Paramount+. We believe the series can leverage Paramount’s 67.5 million subscribers to reach new audiences and potentially convert new viewers to ARK players. We view the release of ARK: The Animated Series as a significant step in the company’s crossover media strategy. 

Animated series DLC. In unison with the release of ARK: The Animated Series, the company is releasing a new DLC package that includes four new character skins from the series. The DLC release aims to drive user engagement across platforms and offer content to existing players who are fans of the show and new players alike. 

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Noble Capital Markets Research Reports Thursday, March 21, 2024

Companies contained in today’s report:

Lifeway Foods (LWAY)/OUTPERFORM – Capping a Year of Growth in Sales and Margins

Lifeway Foods (LWAY/$13.58 | Price Target: $16)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Capping a Year of Growth in Sales and Margins
Rating: OUTPERFORM

Fourth Quarter Results. The fourth quarter was another quarter of y-o-y revenue growth, making it the 17th consecutive quarter. The quarter also represented the highest ever quarterly net sales. Net sales were $42.1 million compared to $35.8 million last year and above our $40 million estimate. Gross margin was 28.0% versus 22.1% last year. Net income totaled $4.0 million, or $0.26 per diluted share, compared to $0.7 million or $0.05 last year. We estimated net income of $3.2 million or EPS of $0.21.

Fiscal Year Results. Net sales for the year were $160.1 million, a record-high annual top line result, an increase from $141.6 million in the prior year due to higher volumes of Lifeway’s drinkable kefir. Net income for the year was $11.4 million, or $0.75 per diluted share, compared to $0.9 million or $0.06.

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Noble Capital Markets Research Reports Wednesday, March 20, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – Being More Diversified
Defense Metals Corp. (DFMTF)/OUTPERFORM – On a Roll

Bit Digital (BTBT/$2.14 | Price Target: $4.5)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Being More Diversified
Rating: OUTPERFORM

Diversification Heading into 2024. The Company’s fiscal year 2023 saw the company expand its bitcoin miners and change from ETH mining to native and liquid staking. Most importantly, during the fall of 2023, management announced a new segment, Bit Digital AI, to provide digital infrastructure services, including GPU rental services. With the AI business line, Bit Digital has recurring revenue that gives the Company stability in times of volatility with BTC and ETH prices, in our view.

BTC Mining and ETH Staking. For the year, the Company earned 1,507.3 bitcoins, a 21% increase from last year driven by a higher active hash rate partially offset by an increase in network difficulty. The average fleet efficiency for the active fleet was approximately 28.8 J/TH as of December 31, 2023. The Company earned 287.0 ETH in native staking and 81.9 ETH in liquid staking for the year.

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Defense Metals Corp. (DFMTF/$0.1595 | Price Target: $0.7)
Mark Reichman [email protected] | (561) 999-2272
On a Roll
Rating: OUTPERFORM

Appointment of corporate financial adviser. Defense Metals appointed HCF International Advisers Ltd., a London-based corporate financial advisory firm, to conduct a strategic funding review for the company’s Wicheeda Rare Earth Elements Project. The review will help Defense Metals analyze and evaluate potential funding and strategic partnership options associated with the development of the Wicheeda Project post completion of its preliminary feasibility study (PFS). HCF’s experience in financing globally recognized mining projects include its role as financial adviser to Arafura Rare Earths Limited (ASX: ARU) in the financing of the Nolan Project in Australia.

Upcoming preliminary feasibility study. Defense Metals expects to complete a PFS in the second calendar quarter of 2024 for which metallurgical test work has been completed. Bench-scale and hydrometallurgical pilot plant test work indicates the planned acid bake process will deliver approximately 90% total rare earth oxide (TREO) extraction from the mineral concentrate to a mixed rare earth carbonate product.

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Noble Capital Markets Research Reports Tuesday, March 19, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – First Look at Fourth Quarter Results
Comtech Telecommunications (CMTL)/MARKET PERFORM – Mixed Quarterly Results, Many Questions Remain

Bit Digital (BTBT/$2.17 | Price Target: $4.50)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
First Look at Fourth Quarter Results
Rating: OUTPERFORM

4Q Results. Fourth quarter revenue was $16.1 million, above last year’s revenue of $7.8 million and above our estimate of $13 million. The Company realized a gain of $8.6 million on its digital assets during the quarter. Net loss for the quarter was $2.0 million, or about $0.02 per share, versus last year’s net loss of $68.7 million, or $0.87 per share. The large improvement was due to a $50 million asset impairment the Company incurred last year that did not repeat. Adjusted EBITDA for the quarter was $11.9 million compared to a negative $8.0 million in the prior year.

Fiscal Year Results. Revenue for 2023 was $44.9 million, an increase of 39% from the previous year’s $32.3 million. Net loss for the year was $13.9 million, or $0.16 per share, an improvement of $91.4 million from the prior year’s loss of $105.3 million, or $1.34 per share. Adjusted EBITDA for the year was $12.4 million compared to a negative $26.9 million last year.

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Comtech Telecommunications (CMTL/$4.60)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Mixed Quarterly Results, Many Questions Remain
Rating: MARKET PERFORM

Refi Overhang. The uncertainty created by the refinancing is impacting business results. For the first time in six quarters, sequential revenue declined with quarterly revenue barely exceeding year ago levels. Lower Space and Satellite segment revenue reflects order delays and supply chain constraints largely stemming from the refi overhang. Lower R&D expenses and One Comtech savings, along with a one-time gain, resulted in positive operating income for the third consecutive quarter.

2Q24 Results. Revenue was $134.2 million, flat y-o-y and below guidance of up 1% – 3% sequentially. We were at $154 million. Adjusted EBITDA totaled $15.1 million, versus $11.3 million in 2Q23. We were at $18.9 million. Comtech reported a net loss of $30.5 million, or a loss of $1.07/s, compared to a net loss of $6.5 million, or $0.23/s last year. Adjusted loss was $0.15/sh versus EPS of $0.09. We had forecast a net loss of $950,000, or a loss of $0.03 per share, and adjusted EPS of $0.28.

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Noble Capital Markets Research Reports Monday, March 18, 2024

Companies contained in today’s report:

Seanergy Maritime (SHIP)/OUTPERFORM – Strong results allow us to raise our estimates and price target
Townsquare Media (TSQ)/OUTPERFORM – Improving Fundamental Outlook; Boosts Dividend

Seanergy Maritime (SHIP/$8.73 | Price Target: $12)
Michael Heim [email protected] | (314) 308-9711
Strong results allow us to raise our estimates and price target
Rating: OUTPERFORM

Shipping rates were even higher than our recently-raised rates. Shipping rates spiked in December. We raised our estimates in February to reflect favorable conditions, but rates surpassed our raised projections. Seanergy was able to extend/reprice six vessels at favorable terms due to higher rates.

Seanergy has fixed 93% of 2024-1Q and 58% of 2024-2Q operating days at attractive prices. We believe cash flow and earnings will be fairly stable due to fixed prices. Seanergy’s exposure to shipping rates increases as the year progresses as charters expire and the company adds vessels to its fleet.

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Townsquare Media (TSQ/$10.57 | Price Target: $23)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Improving Fundamental Outlook; Boosts Dividend
Rating: OUTPERFORM

Solid Q4 Results. The company reported Q4 revenue of $114.8 million and adj. EBITDA of $24.8 million, in line with expectations. Revenue for full year 2023 declined a modest 0.9%, excluding political revenue, and adj. EBITDA decreased 9.1% when political is excluded. Digital Advertising was a bright spot for the company in 2023, increasing a solid 7.1% from the prior year. Notably, revenue and adj. EBITDA met the company’s previously issued full year guidance. 

Digital at its trough. Digital revenue in Q4 was down 6.4% from the prior year period. The decrease was attributed to softness in Digital Marketing Solutions, which declined $3.2 million or 14.5% in the quarter. Management provided a sanguine view that this business may have troughed and is positioned for growth by year end. 

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Noble Capital Markets Research Reports Friday, March 15, 2024

Companies contained in today’s report:

GoHealth, Inc. (GOCO)/OUTPERFORM – Resetting Expectations: Still Well Positioned
Harte Hanks (HHS)/OUTPERFORM – On A Path Toward Revenue Growth
Hemisphere Energy (HMENF)/OUTPERFORM – Hemisphere releases reserve report
Maple Gold Mines (MGMLF)/OUTPERFORM – Reorienting the Company for Successful Outcomes
Vera Bradley (VRA)/OUTPERFORM – Reports Fourth Quarter Results

GoHealth, Inc. (GOCO/$11.34 | Price Target: $22)
Patrick McCann, CFA [email protected] |
Michael Kupinski [email protected] | (561) 994-5734
Resetting Expectations: Still Well Positioned
Rating: OUTPERFORM

Q4 results below expectations. The company reported Q4 revenue of $276.7 million, 23.6% below our forecast of $362.0 million. Adj. EBITDA in the quarter was $57.0 million, below our forecast of $116.1 million. The weaker than expected results were due in large part to low Medicare Advantage plan turnover, which limited the total revenue from new policy sales in the quarter.

Low plan turnover. Management noted that the average incremental benefits added to Medicare Advantage plans in 2023 was lower than usual, which resulted in less plan switching by Medicare Advantage enrollees. Of the more than 300,000 consumers it served, GoHealth’s PlanFit Checkup recommended that roughly 1/3 of them stay with their existing plans.     

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Harte Hanks (HHS/$7.63 | Price Target: $14)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
On A Path Toward Revenue Growth
Rating: OUTPERFORM

Solid Q4 Results. The company reported Q4 revenue of $49.5 million, 4.6% higher than our estimate of $47.3 million. The positive revenue surprise is attributed to higher than expected Customer Care revenue. Adj. EBITDA in the quarter was $5.2 million, which beat our estimate of $3.3 million by a strong 60.3%. The favorable operating results were driven by stronger than expected Customer Care revenue, which carries a higher margins than its other revenue streams.

2024 Outlook.  In our view, the company stands to benefit from several positive developments in 2024. Notably, management highlighted its plans to reduce expenditures, with roughly $6.0 million of savings expected in 2024 and approximately $16.0 million of cost reductions planned over the next two years. Additionally, the company is developing a partnership network it plans to utilize in the coming year.

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Hemisphere Energy (HMENF/$1.17 | Price Target: $2.25)
Michael Heim [email protected] | (314) 308-9711
Hemisphere releases reserve report
Rating: OUTPERFORM

Hemisphere announced an independent evaluation of its reserves highlighting a 5% increase in NPV10 value for proved reserves. The estimated value for total proved reserves (PR) when discounted back at a 10% rate was $325 million ($3.27 per share) versus $308 million in the reserve from last year. The increase reflects higher West Canada Select oil prices in future years with the completion of the Trans Mountain Pipeline running from Alberta to the Pacific Coast. The value of proved developed producing (PDP) reserves rose 9% as the company was active drilling in 2023 and moving reserves into the PDP category.

The company was able to replace reserves reduced by production through drilling and acquisition. Hemisphere produced 1.1 mmboe in 2023 and added 1.0 mmboe of reserves through the drillbit or from acquisition. As a result, proved reserves were 12.1 mmboe in the most recent report versus 12.2 mmboe last year. The company spent $16 million to drill eight wells in addition to purchasing land and seismic. Just two years ago, capital expenditures were only $8 million. Finding, Development and Acquisition costs per proved reserve added in 2023 were $14.82/boe, an attractive price given current oil prices. 

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Maple Gold Mines (MGMLF/$0.05 | Price Target: $0.25)
Mark Reichman [email protected] | (561) 999-2272
Reorienting the Company for Successful Outcomes
Rating: OUTPERFORM

Outlook for 2024. Since his appointment as CEO, Mr. Kiran Patankar has re-oriented and re-positioned the company for successful outcomes by expanding the geological team, taking an axe to corporate general and administrative expenses, and strengthening the data driven exploration program to refine the targeting process. Maple Gold is in the process of updating three dimensional models for Douay and Joutel and prioritizing targets. The next phase of drilling is expected to commence this year, along with a follow-up program at Eagle. We expect more details regarding the next phase of drilling in April.

Technical bench strength. Maple Gold recently added three members to its geological team, including Mr. Daniel Johansson, Senior Exploration Geologist, Mr. Remi Clairet, Project Geologist, and Mr. Jackie Long, Database and Modeling. We think the collaborative effort of an expanded team, along with managing its database in-house, will sharpen and enhance the accuracy of target generation. The team will work in close collaboration with Agnico Eagle’s exploration team.

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Vera Bradley (VRA/$6.41 | Price Target: $10)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Reports Fourth Quarter Results
Rating: OUTPERFORM

4QFY24. Revenue totaled $133.3 million, compared to $147.1 million in 4Q23, and below our estimate of $137 million. Gross margin improved to 52.3% from 40.8%. Reported net loss of $1.9 million, or $0.06/sh, compared to a net loss of $28.2 million, or $0.91/sh in 4Q22. Adjusted EPS was $0.11 versus a net loss of $0.03/sh last year. This year’s extra week added approximately $6 million to quarterly revenue and EPS by $0.01/sh. We had forecasted net income of $5 million, or $0.16/sh.

New Day. Project New Day launches in mid-July and is the first manifestation of the work under Project Restoration. New Day is a full pivot from where Vera Bradley is today. It includes, among other things, the reveal of a new and elevated full line branding and marketing, product store design, and website design.

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Noble Capital Markets Research Reports Thursday, March 14, 2024

Companies contained in today’s report:

Comtech Telecommunications (CMTL)/MARKET PERFORM – A CEO Change
Conduent Inc (CNDT)/OUTPERFORM – Peering Through The Fog Of Its Transition
InPlay Oil (IPOOF)/OUTPERFORM – Operating and financial results in line with expectations

Comtech Telecommunications (CMTL/$4.19)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
A CEO Change
Rating: MARKET PERFORM

CEO Change. Yesterday, in a surprise move, Comtech’s Board of Directors terminated Ken Peterman as President and CEO. Mr. Peterman also will cease to serve on the Board. Mr. Peterman’s termination was for conduct unrelated to Comtech’s business strategy, financial results, or previously filed financial statements, according to the Company. The Board appointed John Ratigan, Chief Corporate Development Officer (CCDO), as interim Chief Executive Officer, effective immediately.

Ratigan Background. Mr. Ratigan, a former Chief Executive Officer, is an accomplished executive who brings over three decades of experience and senior leadership expertise across the global satellite technology sector. He has an extensive background in satellite communications, as well as a deep familiarity with Comtech, having spent ten years at EF Data Corp. prior to its acquisition by Comtech in July 2000. Mr. Ratigan was named CCDO in November 2023.

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Conduent Inc (CNDT/$3.18 | Price Target: $9)
Patrick McCann, CFA [email protected] |
Michael Kupinski [email protected] | (561) 994-5734
Peering Through The Fog Of Its Transition
Rating: OUTPERFORM

Initiating Coverage. We are initiating coverage with an Outperform rating and a $9 price target. While our initial recommendation is based on a sum of the parts analysis, we believe that the shares will eventually reflect its attractive ongoing businesses following its current rationalization and streamlining of its portfolio. 

A transitional story. Since spinning off from Xerox in 2017, the company has sold several businesses, changed key members of the management team and simplified the business. Importantly, in the second half of 2023, the company announced the divestitures of three businesses that are expected to close in the first half of 2024. While the transitional story is not complete, there appears to be light at the end of the tunnel. 

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InPlay Oil (IPOOF/$1.71 | Price Target: $6)
Michael Heim [email protected] | (314) 308-9711
Operating and financial results in line with expectations
Rating: OUTPERFORM

Quarterly production in line with recently reduced guidance. InPlay reported 2023 production volume of 9,025 boe/day consistent with guidance of 9,000-9,100 boe/day. We had expressed concern that the previous decline in guidance reflected a sharper production decline curve than previously expected. Management assures that the decline curve has not changed and the decline reflects a shift towards drilling oil wells which have a lower initial production rate than gas wells. 

InPlay released a reserve report for the 2023 year end. The reserve report shows a modest reduction in reserves and reserve value implying a reserve replacement rate slightly below 1.0 times. The calculation is somewhat complicated by changing assumptions regarding assumed energy pricing and recoverability. The report indicated a finding, development and acquisition cost of $23.36/boe which is attractive compared to current prices.

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Noble Capital Markets Research Reports Wednesday, March 13, 2024

Companies contained in today’s report:

AdTheorent (ADTH)/OUTPERFORM – An Upbeat Outlook
Cadrenal Therapeutics (CVKD)/OUTPERFORM – FY2023 Reported With Continued Progress Toward The Phase 3 Tecarfarin Trial
One Stop Systems (OSS)/MARKET PERFORM – Expanding the Opportunity Set
The GEO Group (GEO)/OUTPERFORM – An Expanded Contract

AdTheorent (ADTH/$2.87 | Price Target: $4.75)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
An Upbeat Outlook
Rating: OUTPERFORM

Posts strong Q4 results. Q4 revenues increased a solid 15.2% to $59.7 million, nicely above our $56.2 million estimate. In addition, gross profit margins were strong at 53.1% (above our 48.4% estimate), supporting better than expected adj. EBITDA ($13.6 million versus our estimate of $10.4 million). 

Prepares for cookie-less world. Management indicated that it is working with Google and has visibility into a cookie-less future. Google has already deprecated cookies in 1% of its Chrome users and is expected to complete the transition in the third quarter 2024. Given that AdTheorent does not rely on consumer IDs, we believe that the company is well positioned to benefit in a post cookie environment. 

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Cadrenal Therapeutics (CVKD/$0.58 | Price Target: $4)
Robert LeBoyer [email protected] | (212) 896-4625
FY2023 Reported With Continued Progress Toward The Phase 3 Tecarfarin Trial
Rating: OUTPERFORM

Cadrenal Therapeutics Reported FYQ2023. Cadrenal announced a loss of $8.4 million or $(0.62) per share for FY2023 and $1.1 million or $(0.07) per share for 4Q23. The full-year loss consisted of Research and Development expense of $4.1 and General and Administrative Expense of $3.6 million, close to our estimates. Cash on December 31 was $8.5 million.

Tecarfarin IND Is Expected During 1H24. Cadrenal continues to work toward finalizing the trial protocols for the tecarfarin Phase 3 study, its oral anticoagulant for prevention of systemic thromboembolism in end-stage kidney disease (ESKD) patients with atrial fibrillation (irregular heartbeat, AFib). This is an Orphan population that can not use the commonly prescribed direct oral anticoagulants (DOAC) drugs.

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One Stop Systems (OSS/$3.56)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Expanding the Opportunity Set
Rating: MARKET PERFORM

New Win. One Stop Systems has secured a pilot project to provide a liquid immersion-cooled data storage system for use on a deployable ground station. Management expects the project to lead to follow-on production orders. Yesterday’s announcement follows the Company’s recently announced direct to chip liquid cooled solution for a foreign navy submarine application, expanding OSS’ market leading cooling solution approaches for rugged high performance computing at the edge.

A Couple of Firsts. The win was procured through a global defense prime contractor and represents the first liquid immersion-cooled high-performance compute solution for a U.S. intelligence agency mobile ground station application. It also represents a new intelligence community end user for OSS.

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The GEO Group (GEO/$11.86 | Price Target: $15)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
An Expanded Contract
Rating: OUTPERFORM

Air Support. GEO’s wholly-owned subsidiary, GEO Transport, Inc. (“GTI”) has been awarded a five-year contract, inclusive of option periods, to provide air operations support services on behalf of U.S. Immigration and Customs Enforcement. GTI will act as a subcontractor to CSI Aviation, Inc., which has been selected by ICE as the prime contractor.

Details. The new five-year contract is expected to generate approximately $25 million in annualized revenues for GEO. GTI first began providing air operations support services to ICE as a subcontractor to CSI Aviation under a nine-month emergency contract starting in July of 2023. The original July emergency contract to provide air operations support for ICE was expected to generate up to approximately $16 million in revenues over a 9-month period.

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Noble Capital Markets Research Reports Tuesday, March 12, 2024

Companies contained in today’s report:

Haynes International (HAYN)/MARKET PERFORM – Revising Near-Term Estimates; Merger Update

Haynes International (HAYN/$59.42)
Mark Reichman [email protected] | (561) 999-2272
Revising Near-Term Estimates; Merger Update
Rating: MARKET PERFORM

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Noble Capital Markets Research Reports Monday, March 11, 2024

Companies contained in today’s report:

FAT Brands (FAT)/OUTPERFORM – Reports Fourth Quarter Results
Information Services Group (III)/OUTPERFORM – Waiting Out the Delays
Onconova Therapeutics (ONTX)/OUTPERFORM – Ocugen To Present Data At American Association of Cancer Research Meeting
Unicycive Therapeutics (UNCY)/OUTPERFORM – Trial Meets Milestone With Complete Enrollment

FAT Brands (FAT/$8.11 | Price Target: $25)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Reports Fourth Quarter Results
Rating: OUTPERFORM

4Q23 Results. FAT Brands reported 4Q23 revenue of $158.6 million, up 52.8% y-o-y, driven by the Smokey Bones acquisition. System-wide sales growth was 16.5%. FAT reported adjusted EBITDA of $27 million in the quarter, compared to $19.6 million in 4Q23. Net loss for the quarter was $26.2 million, or $1.68/sh, compared to a net loss of $70.8 million, or $4.39/sh last year. Adjusted net loss for the quarter was $17.3 million, or $1.15/sh, compared to a net loss of $43 million, or a loss of $2.70/sh, last year. We had projected revenue of $150 million and a net loss of $25.9 million, or a loss of $1.55/sh.

New Locations. During the quarter, FAT Brands saw 29 store openings, bringing the full year count to 125 locations, somewhat below the original expectation of 150 new locations. Management expects another 125+ new openings in 2024. The current 1,100 store pipeline will add some $60 million of adjusted EBITDA once built out.

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Information Services Group (III/$4.21 | Price Target: $11)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Waiting Out the Delays
Rating: OUTPERFORM

Continued Challenging Environment. Client decision making drove a decrease in performance for ISG in the fourth quarter. However, it was not just the Company experiencing this, the IT and business services industry felt the squeeze as well. We believe the Company’s recurring revenues (now 43% of total sales) and the expansion of its AI services will allow ISG to push through an expected challenging first half in 2024.

Full Year Results. Revenue increased 2% to $291.1 million for the year, with the Americas segment showing growth while Europe and Asia Pacific decreased from last year. Net income was $9.8 million, or $0.20 per share excluding a bad debt reserve. Adjusted EBITDA was $37.7 million or a margin of 12.9%.

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Onconova Therapeutics (ONTX/$0.96 | Price Target: $7)
Robert LeBoyer [email protected] | (212) 896-4625
Onconova To Present Data At American Association of Cancer Research Meeting
Rating: OUTPERFORM

Onconova Announces Presentation At AACR. Onconova announced the scheduling of a poster presentation at the American Association for Cancer Research Annual Meeting scheduled for April 8, 2024, in San Diego. The abstract provides additional details on rigosertib’s multiple mechanisms of action that include effects on cell signaling, interruption of cell division, and inflammation within the tumor environment to improve efficacy of checkpoint inhibitors.

Mechanisms Are Consistent With Rigosertib Clinical Trials. Rigosertib is currently in a Phase 1/2 trial testing the combination of rigosertib with nivolumab (Opdivo, an anti-PD-1 checkpoint inhibitor) in patients with KRAS-positive non-small cell lung cancer (NSCLC) and in a Phase 2 trial with pembrolizumab (Keytruda, an anti-PD-1 checkpoint inhibitor) in metastatic melanoma.

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Unicycive Therapeutics (UNCY/$1.52 | Price Target: $6)
Robert LeBoyer [email protected] | (212) 896-4625
Trial Meets Milestone With Complete Enrollment
Rating: OUTPERFORM

Pivotal Trial Enrollment Complete. Unicycive announced that it has completed enrollment in the pivotal trial testing OLC  (oxylanthanum carbonate), its phosphate binder, in ESRD patients on renal dialysis. This is a milestone for the trial that also confirms the timeframes we had expected for the trial results, NDA application, and product launch.

Data and NDA Expected Later In 2024. The pivotal trial is an open-label single arm study. Its primary endpoint is tolerability, with secondary endpoints of safety and pharmacokinetics. Statistical analysis is not required. The trial has a target enrollment of 60 patients and is expected to announce data in late 2Q24/mid2024.

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Noble Capital Markets Research Reports Friday, March 8, 2024

Companies contained in today’s report:

DLH Holdings (DLHC)/OUTPERFORM – NCI Award
Information Services Group (III)/OUTPERFORM – First Look into the Fourth Quarter
QuantaSing Group Limited (QSG)/OUTPERFORM – Quietly Executing Its Growth Strategy
Saga Communications (SGA)/OUTPERFORM – Regains Its Crown
Xcel Brands (XELB)/OUTPERFORM – Updates Investors With Preliminary Q4 Results

DLH Holdings (DLHC/$14.76 | Price Target: $21)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
NCI Award
Rating: OUTPERFORM

NCI Award. DLH Holdings has been awarded a contract to continue and expand its user-experience, technology refresh, and IT services for the National Institutes of Health’s (“NIH”) National Cancer Institute (“NCI”), the largest institute under NIH. This new award extends DLH’s longstanding partnership with NCI’s Center for Biomedical Informatics and Information Technology (“CBIIT”) by providing scientific computing and informatics to support NCI’s research mission.

CBIIT Blanket. The contract was competitively awarded through the multiple-award blanket purchase agreement with CBIIT that the Company announced in February 2023. Including the base period and all option periods, the contract has a value of approximately $52 million over a performance period of five and a half years. Furthermore, the award includes provisions for an additional $86 million in optional IT services. If fully exercised, the potential maximum contract value would be $138 million.

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Information Services Group (III/$4.38 | Price Target: $11)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
First Look into the Fourth Quarter
Rating: OUTPERFORM

Growth in a Down Industry. For the year, the IT and business services industry has been down 6% in revenue while ISG grew its topline by 2%. We believe the growth is a testament to the Company’s focus on recurring revenues with such revenues being $125 million for the year, up 16% compared to last year, through its platforms such as ISG GovernX and ISG ProBenchmark. Recurring revenues now represent 43% of ISG’s overall revenue, up 500 basis points from the prior year.

Fourth Quarter Results. Management reported revenues of $66.2 million for the quarter, below last year’s revenue of $74.2 million and below our estimate of $69.0 million. Slower decision making from clients resulted in revenue being pushed to the right for the Company. Driven by a $4.8 million bad-debt reserve taken in 4Q23, net loss was $2.9 million, or $0.06/sh, versus net income of $4.3 million, or $0.09/sh in 4Q22. We estimated net income of $2.6 million, or $0.05/sh.

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QuantaSing Group Limited (QSG/$2.8 | Price Target: $10)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
Quietly Executing Its Growth Strategy
Rating: OUTPERFORM

Strong results. The company reported strong fiscal Q2 revenue and adj. EBITDA for the period ended December 31. Revenue of RMB980.5 million and adj. EBITDA of RMB 98.6 million outperformed our estimates of RMB 930.0 million and RMB 83.0 million, respectively.

User growth. Total registered users grew roughly 45% to 112.4 million users, up from 77.8 million users at the end of the prior year period. Total paying learner grew to 0.4 million, up 24% from the prior year period.  

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Saga Communications (SGA/$24.3 | Price Target: $27)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Regains Its Crown
Rating: OUTPERFORM

Delivers good Q4 results. Total company revenues of $29.1 million was slightly better than our $28.5 million estimate. The Q4 revenue decline of a modest 3.3% was due to the absence of Political advertising. However, it was among the best in an industry which reflected revenue declines between 6% to 14% among its peers. Adj. EBITDA was $4.5 million versus our $4.0 million estimate. 

Announces special dividend. The company declared its first variable dividend of $0.60 per share to be paid on April 5, 2024 with a record date of March 18, 2024. The dividend will be funded by cash on the company’s balance sheet. This variable dividend is in addition to the regular quarterly dividend and a recent $2 per share special dividend. 

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Xcel Brands (XELB/$0.95 | Price Target: $3.5)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Updates Investors With Preliminary Q4 Results
Rating: OUTPERFORM

Provides preliminary Q4 estimates. The company provided Q4 revenue and adj. EBITDA preliminary estimates that are slightly below our expectations. The preliminary revenue estimate was $2.13 million versus our estimate of $2.80 million. In addition, the adj. EBITDA preliminary estimate of a loss of $1.07 million was somewhat higher than our loss estimate of $451,000. 

Preliminary full year results. Total company revenue for 2023 is expected to be $17.7 million and EBITDA of $5.1 million. The preliminary results are slightly below our $18.5 million and loss of $5.4 million, respectively.  

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Noble Capital Markets Research Reports Thursday, March 7, 2024

Companies contained in today’s report:

Commercial Vehicle Group (CVGI)/OUTPERFORM – Fourth Quarter Post Call Commentary
GeoVax Labs (GOVX)/OUTPERFORM – Vaccine Production Technology Reaches Milestone With Manufacturing Facility Validation
MAIA Biotechnology (MAIA)/OUTPERFORM – New THIO-101 Update Shows Consistent Overall Response Rate
Orion Group Holdings (ORN)/OUTPERFORM – Some Insider Buying

Commercial Vehicle Group (CVGI/$6.38 | Price Target: $12)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Fourth Quarter Post Call Commentary
Rating: OUTPERFORM

Impact of UAW Strike on 4Q. Fourth quarter results were negatively impacted by a work stoppage at a customer facility due to the UAW strike. Management estimated the strike reduced revenue by about $12 million and had a $0.05/sh negative impact on EPS. We expect that eventually the revenue will come back, it is just a question of timing.

New Wins. CVG recorded in excess of $150 million of new wins in 2023 on a fully ramped basis, continuing the Company’s strong track record of success. The wins continue to be focused within the Electrical Systems segment and support the product ramp-up at the new plants in Mexico and Morocco, which are focused on meeting the demand growth in electrical systems. CVG is currently expanding its Morocco footprint with an additional new plant under construction.

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GeoVax Labs (GOVX/$2.15 | Price Target: $6)
Robert LeBoyer [email protected] | (212) 896-4625
Vaccine Production Technology Reaches Milestone With Manufacturing Facility Validation
Rating: OUTPERFORM

Commercial Scale Production Facility Achieves Validation. GeoVax has announced that its manufacturing technology for producing commercial-scale MVA-based vaccines has been validated for production. This signifies the successful transfer of the technology from the research facility to the commercial cGMP manufacturing plant, with production runs that meet specifications for use in clinical trials and commercial sales. This was a milestone we had anticipated that allows higher quantities, faster production, and greater yields of its proprietary MVA-based vaccines.The New Manufacturing Facility Cam Produce The Pipeline Vaccines. Products that can be made in the system include CM04S1, its vaccine currently in two different Phase 2 trials to stimulate protective responses against COVID for immunocompromised patients with hematological cancers and in Phase 2 as a universal booster for COVID. The facility can also produce the vaccines in development for infectious diseases including smallpox, Ebola, zika, and malaria.

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MAIA Biotechnology (MAIA/$1.47 | Price Target: $14)
Robert LeBoyer [email protected] | (212) 896-4625
New THIO-101 Update Shows Consistent Overall Response Rate
Rating: OUTPERFORM

Third Line Patients’ Preliminary Overall Response Rate (ORR) Shows Improvement. MAIA announced updated data from its THIO-101 trial. The trial enrolled patients with Stage 3 or 4 NSCLC who have progressive disease after treatment with checkpoint inhibitor therapy with or without standard of care chemotherapy. These advanced disease patients were treated with the combination of THIO and Libtayo (cemiplimab, an anti-PD-1 checkpoint inhibitor from Regeneron). The data was from the first patients receiving treatment as third-line therapy that reached an evaluation timepoint by January 8, 2024.

ORR Greatly Exceeded Published Studies. New data was from patients who had received the THIO combination as third-line treatment. The overall response rate was 38%, with 3 out of 8 patients showing a complete response (CR) or partial response (PR). This compares with response rates of about 6% in published studies.

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Orion Group Holdings (ORN/$7.24 | Price Target: $8)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Some Insider Buying
Rating: OUTPERFORM

Insider Buying. Two Orion executives-CEO Travis Boone and General Counsel Chip Earle-added to their Orion holdings following the February 28th release of full year results. We would note Orion shares fell on the earnings news, dropping as low as $5.81 after closing the prior day at $6.92. While the purchases were modest, the acquisition of shares on the heels of the price drop is informative, in our view.

Travis Boone. On March 4th, CEO Travis Boone reported the purchase of 12,000 ORN shares at an average cost of $7.01 per share. The shares were acquired at prices ranging from $6.91-$7.08. The recent purchase increased Mr. Boone’s overall Orion stake to 402,557 shares. Notably, this appears to be the first open market purchases made by Mr. Boone.

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Noble Capital Markets Research Reports Wednesday, March 6, 2024

Companies contained in today’s report:

Bit Digital (BTBT)/OUTPERFORM – February Production
CoreCivic, Inc. (CXW)/OUTPERFORM – Terming Out Some Debt
Entravision Communications (EVC)/OUTPERFORM – Its Digital Business Does A Faceplant
V2X (VVX)/OUTPERFORM – A Solid End to 2023

Bit Digital (BTBT/$2.37 | Price Target: $4.5)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
February Production
Rating: OUTPERFORM

BTC Mining. Bit Digital produced 128.7 BTC during the month of January, a 11.7% decrease from 145.7 BTC in the prior month. An increase in network difficulty, modest decrease in transaction fees, and fewer days in the month were causes of the decrease. The Company’s active hash rate was approximately 2.73 EH/s compared to 2.50 EH/s. The Company is on its way towards the active mining fleet goal of around 6.0 EH/s during 2024, in our view.

ETH Staking and AI. The Company had approximately 12,784 ETH actively staked, flat last month, with approximately 12,384 ETH natively staked and 400 ETH deployed in liquid staking. Bit Digital earned a blended APY of approximately 4.4% compared to 3.69% last month, and earned aggregate staking rewards of approximately 43.4 ETH. Bit Digital’s AI contract earned an estimated $4.0 million of unaudited revenue during the month.

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CoreCivic, Inc. (CXW/$14.53 | Price Target: $17)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
Terming Out Some Debt
Rating: OUTPERFORM

Debt Offering. Last night after market close, CoreCivic announced an offering of $500 million aggregate principal amount of 8.25% senior notes due 2029. The aggregate principal amount of the Notes to be issued in the offering was increased to $500 million from the previously announced $450 million. The aggregate net proceeds from the sale of the Notes are expected to be approximately $490.3 million.Uses. CoreCivic intends to use the net proceeds, together with borrowings under the Company’s revolving credit facility and cash on hand, to fund the concurrent cash tender offer for any and all of the $593.1 million outstanding aggregate principal amount of 2026 Notes. Any remaining funds will be used to redeem 2026 Notes that remain outstanding thereafter. With excess cash on hand, the Company could pay most of the remaining principal with cash, modestly tapping into the revolver.

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Entravision Communications (EVC/$3.57 | Price Target: $3.5)
Michael Kupinski [email protected] | (561) 994-5734
Jacob Mutchler [email protected] |
Its Digital Business Does A Faceplant
Rating: OUTPERFORM

Mixed Q4 results. Total company Q4 revenue of $320.1 million, an increase of 8.0%, was better than our $309.7 million estimate, driven by 19% growth in its Digital businesses. Both TV and Radio declined in the quarter due to the absence of year earlier Political advertising. Q4 adj. EBITDA of $16.2 million was slightly below our $19.0 million estimate. 

Meta takes its business in-house. The recent financial results were overshadowed by a late announcement that Meta plans to take its advertising sales in-house, ending its relationship with Entravision and all its sales partners. Meta accounted for roughly 52% of total company revenues and 40% of adj. EBITDA in 2023.  

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V2X (VVX/$43.51 | Price Target: $62)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
A Solid End to 2023
Rating: OUTPERFORM

A Solid 2023. The transformation of V2X continued in 2023. The Company has emerged as a leader in the operational segment of the broader federal services marketplace. V2X is advancing how missions are operated by leveraging converged and engineered solutions, at the intersection of technology and operations. This includes modernization and sustainment support that elongates platform life cycles while enhancing capabilities.

4Q23 Results. Record revenue of $1.04 billion was up 6.4% y-o-y, and above our $1.01 billion forecast. Adjusted EBITDA came in at $82.1 million versus $82.3 million in 4Q22 and our $75 million estimate. Adjusted diluted EPS was $1.22 compared to $0.97 last year and our $0.97 estimate.

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Noble Capital Markets Research Reports Tuesday, March 5, 2024

Companies contained in today’s report:

Commercial Vehicle Group (CVGI)/OUTPERFORM – First Look: Fourth Quarter Results
Labrador Gold Corp. (NKOSF)/OUTPERFORM – On the Right Trajectory

Commercial Vehicle Group (CVGI/$6.66 | Price Target: $12)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
First Look: Fourth Quarter Results
Rating: OUTPERFORM

4Q23 Results. Driven by a number of factors, including a strike at a customer plant, revenue was down 5.0% y-o-y to $223.1 million. We had estimated $230 million. Adjusted EBITDA came in at $10.3 million, down $2.9 million y-o-y and below our $13 million forecast. Impacted by a favorable tax benefit, 4Q23 GAAP net income was $23.3 million, or $0.70/sh, compared to GAAP net loss of $32 million, or a loss of $0.98/sh. Adjusted 4Q23 net income was $2.9 million, or $0.09/sh, compared to $1.4 million, or $0.04/sh last year. We had forecast net income of $4.4 million, or $0.13/sh.

Segments. Electrical Systems remained the star performer with revenue increasing 19.4% to $56.2 million and adjusted operating income up 25% to $6.7 million. Vehicle Solutions revenue down 10.1% to $128.4 million, with adjusted operating income down 3.9% to $4 million. Aftermarket revenue of $31.4 million was off 8.1%, while adjusted operating income declined 6.4% to $3.4 million. Industrial Automation revenue of $7.1 million declined 35%, while adjusted operating income was $0.3 million.

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Labrador Gold Corp. (NKOSF/$0.1 | Price Target: $0.5)
Mark Reichman [email protected] | (561) 999-2272
On the Right Trajectory
Rating: OUTPERFORM

Recent drill results. Exploration and drilling at the company’s 100%-owned Kingsway gold project is targeting the Appleton Fault over a 12-kilometer strike length. With almost 92,000 meters of the company’s planned 100,000-meter drilling program completed, the company has approximately C$7 million in cash on hand. Assays are pending for samples from approximately 4,000 meters of core. The company recently released results for holes drilled at the Northeast extension of Big Vein, Knobby, and a follow-up hole at the HM occurrence.

Long interval of high-grade gold at Big Vein. Hole K-23-309 drilled at Big Vein intersected several intervals over the length of the hole, including 10.63 grams of gold per tonne over 5.9 meters that included 46.72 grams of gold per tonne over 1 meter, 1.41 grams of gold per tonne over 2 meters, and 2.2 grams of gold per tonne over 8.3 meters that included 12.07 grams of gold per tonne over 0.8 meters.

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Noble Capital Markets Research Reports Monday, March 4, 2024

Companies contained in today’s report:

Codere Online (CDRO)/OUTPERFORM – Significant Upside Potential From These Elevated Levels
Orion Group Holdings (ORN)/OUTPERFORM – 4Q Post Call Commentary – Progress Against the Plan
PDS Biotechnology (PDSB)/OUTPERFORM – Clinical Trials Should Drive PDS In 2024

Codere Online (CDRO/$7 | Price Target: $12)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
Significant Upside Potential From These Elevated Levels
Rating: OUTPERFORM

Solid Q4 results. The company reported Q4 revenue of €50.1 million, handily beating our estimate of €39.0 million by 28.5%. Adj. EBITDA in the quarter was a loss of €4.1 million, better than our estimate of a loss of €6.2 million.

Growth in key markets. The company’s solid Q4 performance was driven by year over year revenue growth of 56% in Mexico and 17% in Spain. In both countries, the number of users and spend per customer increased compared with Q3. Notably, the company displayed year-over-year growth, in spite of tough comps in Q4 against such big events as the World Cup.

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Orion Group Holdings (ORN/$6.67 | Price Target: $8)
Joe Gomes [email protected] | 561-999-2262
Joshua Zoepfel [email protected] |
4Q Post Call Commentary – Progress Against the Plan
Rating: OUTPERFORM

Progress. In 2023 Orion transformed into a more focused, more competitive and more driven company. Management implemented a disciplined project bidding and delivery strategy, attracted high-caliber business development executives, invested in systems, training and tools, secured a three-year, $103 million credit facility, and closed over $25 million in equipment and real estate sale-leaseback transactions.

Marine Segment. Segment revenue was up 40.3% to $135.2 million, while operating income was $4.3 million, compared to  $234,000 in 4Q22. The revenue growth was primarily related to the Pearl Harbor project.

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PDS Biotechnology (PDSB/$6.59 | Price Target: $17)
Robert LeBoyer [email protected] | (212) 896-4625
Clinical Trials Should Drive PDS In 2024
Rating: OUTPERFORM

PDSB Has Clinical Trial Milestones For 2024. We expect PDS Biotech is expecting to start the Phase 3 trial for PDS0101in head and neck cancer in 1Q24. This follows strong data from the Phase 2 trial presented during 2023. Several Investigator-initiated trials (IITs) testing PDS0101 in other indications have presented data showing improvements over current standards of care, its mechanism of action, and its potential use in related cancers. The second product, PDS01ADC, has also shown strong data in a Triple Combination trial. In our opinion, the stock has not reflected these results in the stock price.

A Phase 3 Trial For PDS0101 Is Expected Shortly. The Phase 3 VERSAMUNE-003 trial for PDS0101will enroll patients with recurrent or metastatic head and neck squamous cell carcinoma (R/M HNSCC) who have failed treatment with standard chemotherapy but have not been treated with an immune checkpoint inhibitor (ICI naïve). The trial design follows the Phase 2 VERSAMUNE-002, which showed strong improvements in overall response rate (ORR) and overall survival (OS) benefits compared with current treatments.

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Noble Capital Markets Research Reports Friday, March 1, 2024

Companies contained in today’s report:

Codere Online (CDRO)/OUTPERFORM – Poised for Profitability
GeoVax Labs (GOVX)/OUTPERFORM – FY2023 Reported With A Review Of Clinical Progress and Upcoming Milestones
Labrador Gold Corp. (NKOSF)/OUTPERFORM – Putting a Spotlight on the Hopedale Project

Codere Online (CDRO/$6.69 | Price Target: $9)
Michael Kupinski [email protected] | (561) 994-5734
Patrick McCann, CFA [email protected] |
Poised for Profitability
Rating: OUTPERFORM

Solid Q4 results. The company reported Q4 revenue of €50.1 million, handily beating our estimate of €39.0 million by 28.5%. Adj. EBITDA in the quarter was a loss of $4.1 million, better than our estimate of a loss of €6.2 million, illustrated in Figure #1 Q4 Results. The better than expected Q4 results were driven by strong revenue growth in Mexico and Spain. 

Market performances. The company’s solid Q4 performance was driven by year over year revenue growth of 56% in Mexico and 17% in Spain. In both Mexico and Spain, the number of users and spend per customer increased compared with Q3. Notably, the company displayed strong year-over-year growth, in spite of tough comps in Q4 against such big events as the World Cup. 

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GeoVax Labs (GOVX/$2.56 | Price Target: $6)
Robert LeBoyer [email protected] | (212) 896-4625
FY2023 Reported With A Review Of Clinical Progress and Upcoming Milestones
Rating: OUTPERFORM

Full Year Loss Was Less Than Expected. GeoVax reported a FY2023 loss of $26.0 million or $(14.29) per share, adjusted for a 1-for-15 reverse split in January 2024. The loss for 4Q23 was $7.6 million or $(4.29) per share, compared with our estimated loss of $9.0 million. Cash on December 31 was $6.5 million. On its quarterly conference call, the company reviewed progress in its clinical programs and confirmed milestones for 2024.

Gedeptin Program Is Moving Forward. In July 2023, GeoVax reported initial data from the Phase 1/2 trial testing Gedeptin head and neck cancer. The data showed successful delivery of the PNP gene, with safety, tumor reduction, and stable disease. Enrollment was completed in 2Q23, with additional results expected in 1H24. Expansion of Phase 2 of trial is planned during 2024. Additional trials using Gedeptin as a neoadjuvant at earlier stages of disease or in combination with immune checkpoint inhibitors may be added.

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Labrador Gold Corp. (NKOSF/$0.09 | Price Target: $0.5)
Mark Reichman [email protected] | (561) 999-2272
Putting a Spotlight on the Hopedale Project
Rating: OUTPERFORM

Nine mineral occurrences to date. To date, nine mineral occurrences have been identified within three license areas, including five gold, two nickel, one copper and one zinc. Within the Thurber License, five occurrences have been identified that include: 1) TD 500, 2) Thurber Dog, 3) Thurber South, 4) Thurber North, and 5) Kaapak. Within the Southern License area, three mineral occurrences have been identified, including: 1) Fire Ant, 2) Rusty Ridge, and 3) Last Resort. The ninth occurrence is Jasmine. Targets within the Thurber license area have the highest priority for drilling with TD 500 being the highest priority drill target in 2024 following an IP geophysical survey to guide the drilling. 

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