Roth Capital Maintains Buy On Ur-Energy Following 2Q14 Earnings; Keeps $1.50 PT
In a research note released today, Roth Capital analyst Joe Reagor maintained a Buy rating on Ur-Energy (URG) with a $1.50 price target, following the company’s second-quarter earnings.
Reagor noted, “URG announced its second quarter 2014 financial results. Revenue of $9.2 million was higher than our $7.2 million estimate due to a combination of accounting changes and the assignment of sales contract revenues. Going forward URG will account for ad valorem taxes as cost of sales instead of as a revenue discount. This has no impact on our DCF or EPS, but does impact forward revenue estimates. URG exited Q2 2014 with $1.6 million in cash and $3.5 million available on its RMB credit facility. URG has $1.63 million remaining in debt payments in 2014, which could force them to draw down on the RMB loan in order to maintain a minimum cash balance. We estimate this draw down would be approximately $2 million in order to maintain a cash balance above $1.5 million”.
Reagor added, “We made a number of accounting adjustments in our model, but the net impact to our DCF valuation was negligible. We believe current uranium spot prices are not sustainable in the long run and continue to anticipate a strong recovery by year end 2014”.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joe Reagor has a 7.1% average return and a 46.7% success rate. Reagor has a -2.6% average return when recommending URG, and is ranked #1251 out of 3203 analysts.
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