ATER - Aterian: Cheap But Speculative Turnaround Play - Upgrade To Buy

2024-06-27 08:55:29 ET

Summary

• After the close of Wednesday's regular session, e-commerce brand consolidator Aterian raised Q2 expectations for botth the top- and bottom line.
• Following years of revenue declines and material cash burn, the company is finally showing signs of life.
• At the high-end of the increased range, the company would break-even on an Adjusted EBITDA basis for the first time since Q3/2021.
• With Adjusted EBITDA profitability targeted for the second half of the year,  a trade going into the company's second quarter earnings release and Q3 outlook in early August looks enticing.
• As Aterian's business appears to have stabilized and Adjusted EBITDA profitability seemingly close at hand, I am upgrading my rating on Aterian's common shares from "Sell" to "Speculative Buy" with a price target of $4.

Note:

I have covered Aterian, Inc. or "Aterian" (NASDAQ: ATER ) previously, so investors should view this as an update to my earlier articles on the company. ...

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