Cowen and Company moves its price target on Market Perform-rated Ballard Power (Nasdaq: BLDP) from $3 to $2.75 following Q4 results.

Analyst Jeffrey Osborne noted that, while Q4 revenue of $15.6 million was flat, adjusted Ballard's 19 percent gross margin for a $3.5 million warranty provision puts the number in the single-digit range. Management explained that Q4 is not an indicative run rate, even when adjusted, though we remain concerned with the trending rate and have applied a rate shy of 20 percent in our model for 2015, the analyst commented.

Osborne continued, Material Handling continues to be strong, with almost 6k units shipped in '14, while engineering services remains stable. Cash from the IP sale is a positive for '15 liquidity, while telecom improvement is now poised for 2H. We still see long-term revenue CAGR growth above 15 percent, though due to depressed margins, an uptick in opex expected for 2015, and a lack of visibility for telecom backup, we continue to find the stock fairly valued.

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Ballard Power Systems closed at $2.36 yesterday.