AMMO, Inc. (POWW) Closes Gunbroker Acquisition Leading to Positive Catalyst When Guidance is Updated on 5/11 - Roth Capital
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Roth Capital analyst Matt Koranda reiterated a Buy rating and $9.00 price target on AMMO, Inc. (NASDAQ: POWW) after the company announced the close of its GunBroker.com acquisition, reflecting a $240mn purchase price for GunBroker.com and a ~6.0x EBITDA multiple (on 2020 revenue/EBITDA of $60mn/$40mn).
Management expects to provide an update to F2022 guidance on 5/11/21 and the analyst expects this to be a catalyst. He stated "We view the acquisition of GunBroker.com as transformative to AMMO Inc. GunBroker.com provides AMMO Inc. with: (a) a relatively stable source of cash flow that is not directly tied to the primary ammo/firearms market (primary market tends to be more cyclical, based on our understanding of the overall industry); (b) an online channel for direct-to-consumer ammunition sales (GunBroker.com has transacted with >6mn registered users during its lifecycle); and (c) additional paths for monetization over time (bringing payments in-house, providing financing options, etc.)."
Shares of AMMO, Inc. closed at $7.16 yesterday.
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