H.C. Wainwright Downgrades Versus Systems Inc. (VS) to Neutral
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H.C. Wainwright analyst Scott Buck downgraded Versus Systems Inc. (NASDAQ: VS) from Buy to Neutral with a price target of $2.00 (from $1.50).
The analyst comments "Patience wears thin as slowing revenue growth and no clear inflection point has us move to the sidelines. We are downgrading our rating on shares of Versus Systems, Inc., to Neutral from Buy following another quarter of disappointing revenue growth and ongoing balance sheet challenges. After the market close on November 14, Versus Systems, Inc. filed its 3Q22 operating results, which included revenue of just $316,819, up only 4.0% from 3Q21 levels, despite being a seasonally strong quarter. This represents a slowing from the first half of 2022 in which revenue grew by greater than 7.0x year over year. Given the lack of meaningful revenue growth and the current pace of losses, despite some cost reductions, we believe the company will need to raise additional capital under less favorable conditions than what we previously had modeled. While we believe the company’s second screen engagement products should see increasing adoption over time and the integration of advertising should be a meaningful contributor to revenue long term, near-term visibility around timing remains unclear. As a result, we are moving to the sidelines and waiting for an improved balance sheet and signs of more meaningful revenue growth before getting more constructive on VS shares. We are moving our price target to $2.00 from $1.50, following the recent 1-for-15 reverse split in VS shares."
Shares of Versus Systems Inc. closed at $1.49 yesterday.
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