Ispire Technology (ISPR) PT Lowered to $5.50 at US Tiger Securities

US Tiger Securities analyst Bo Pei lowered the price target on Ispire Technology (NASDAQ: ISPR) to $5.50 (from $6.50) while maintaining a Hold rating.

The analyst comments "We are maintaining our HOLD rating and lowering price target to $5.5 after ISPR reported stronger F2Q revenue with soft margins, and indicates break-even timeline will likely be further pushed back by one quarter (previously March quarter) due to the continued US strategic shift. We maintain our HOLD rating as we see continued execution risk. Total revenue was flat y/y at $41.8M, 9% above our estimate, as US revenue (primarily cannabis) declined 45% y/y to $10.9M. The company continued to tighten receivable policies as the company shift focus to improve customer quality from quantity. Overall gross margin was 18.5%, down 1.0pt from F1Q. Operating cash flow was negative $3.2M. The company is shifting operations from the U.S. to Malaysia and Hong Kong, and expect $8M in annual cost savings. But this initiative will likely incur some one-off expenses in the March quarter, which will push the company’s break-even and positive cash flow target by one quarter (was March quarter). ISPR is preparing a PMTA submission for April 2025 to the FDA for its age-verification nicotine delivery system, which is a first-of-its-kind "component PMTA" that seeks FDA approval for a standalone age-gating technology rather than an entire vaping product. If approved, this plug- and-play module could be licensed to multiple manufacturers and integrated into a wide range of nicotine products."

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