Feltl Downgrades XG Technology On The Back Of Backlog, Visibility, And Dilution Risks
In a research report published Monday, Feltl and Company analyst Jeffrey Schreiner downgraded shares of XG Technology (NASDAQ:XGTI) from Hold to Sell rating and reduced his price target to $0.35 (from $1.00), which implies a downside of 62% from current levels.
Schreiner explained, “With the abrupt resignation of Mr. Townes from its Board, which we believe could negatively impact backlog, limited sales traction to date, long-lived backlog, and dilution risk, we believe shares of XGTI face significant headwinds.”
The analyst continued, “Given zero material additions to backlog since its IPO, we wonder if XGTI will see future revenue opportunities beyond its current backlog. Assuming 2x our revised CY15 revenue estimate of $4.4m, we view $0.35/share as an appropriate value for XGTI. We recommend investors SELL shares of XGTI as we believe several significant operating risks could derail shares over the next 12 months.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jeffrey Schreiner has a total average return of -7.0% and a 34.5% success rate. Schreiner has a 4.2% average return when recommending XGTI, and is ranked #3254 out of 3426 analysts.