Phunware, Inc. (PHUN) expects to report revenues of about $25 million in 2022 and plans to revise its corporate investment policy. Following the news, shares of the company declined 6.1% on Thursday. The stock further declined 3.4% in Friday’s early trading session.
The company engages in the development of a Multiscreen-as-a-Service platform, an enterprise cloud platform for mobile. (See Phunware stock chart on TipRanks)
The updated policy is likely to be more flexible and support maximum returns on cash reserves that are not immediately required for operating liquidity.
Phunware said it plans to add more bitcoins as a routine part of corporate operations and treasury management for the foreseeable future. Also, it has disclosed plans to use reserve-backed stablecoins to increase its savings yields in digital US dollar equivalents.
The CFO of Phunware, Matt Aune, said, “While we expect to more than double organic revenues to $25 million in 2022, our board has also taken a forward-thinking approach to managing our cash reserves and has chosen to leverage Decentralized Finance (DeFi) as a strategic and tactical competitive advantage, including bitcoin, stablecoins and alternative cryptocurrencies.”
Price Target
Following the news, Roth Capital analyst Darren Aftahi reiterated a Buy rating on the stock with a price target of $5. The analyst’s price target implies upside potential of 41.6% from current levels.
Buch noted, “We see little impact from the revision on our outlook of PHUN’s core MaaS business nor the potential ability to expand its treasury upside via DeFi/crypto projects.”
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 2 Buys. The average Phunware price target of $5.25 implies 48.7% downside potential.
Bullish Investor Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Phunware with 132.8% of investors on TipRanks increasing their exposure to PHUN stock over the past 30 days.
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