Roth Capital Remains Neutral on Capstone Turbine Corporation Following Organization Structure Changes
In a research report issued today, Roth Capital analyst Matt Koranda reiterated a Neutral rating on Capstone Turbine Corporation (NASDAQ:CPST) with a $0.65 price target, following recent news that the company is eliminating three executive positions and that CFO Ed Reich is stepping down to pursue other opportunities. The company expects the changes to save ~$2 million annually after payment of severance benefits.
Koranda noted, “Our model still calls for CPST to generate $(8.8)mn in adjusted EBITDA during FY’16. Even with full credit for the $2mn in anticipated savings, we would need to see a material uptick in key end markets for CPST to achieve adjusted EBITDA breakeven next fiscal year. That being said, we do believe the goals of streamlining the CPST organization and achieving EBITDA breakeven are incrementally encouraging.”
Bottom line, “While we are encouraged by CPST’s focus on breakeven, we remain on the sidelines until we see more fundamental signs of improvement in key end markets.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Koranda has a total average return of -2.2% and a 46.9% success rate. Koranda has a -28.8% average return when recommending CPST, and is ranked #2977 out of 3574 analysts.