MTTR - SmartRent rises as BTIG starts coverage with Buy expects co to achieve GAAP profitability starting in 2H'24

2024-01-19 09:01:33 ET

BTIG initiates coverage on SmartRent ( NYSE: SMRT ) with Buy rating and said it expects the home technology solutions provider to achieve sustainable GAAP profitability starting in second half of this year.

Shares of the Arizona-based company were up 7% in premarket trading on Friday.

The brokerage also set a target price of $4.50 for the company, implying an upside of nearly 57% to its last close of $2.86.

“With only a ~1.5% market share of US rental stock and less than 10% penetration across its current customer base, we see several years of ~20% topline growth ahead for the company,” said analyst Soham Bhonsle, adding that it expects the company’s operating cash flow to turn positive by 2H'24.

Bhonsle wrote that he expects SmartRent to be Adj. EBITDA positive for the first time in its history in 4Q'23.

BTIG also initiated coverage for other companies in the sector including AppFolio ( APPF ) with a Buy and CoStar ( CSGP ) and Matterport ( MTTR ) with a Neutral rating.

“For companies that were unprofitable, FY'23 was a wakeup call to get their P&Ls in order, and today we're sensing a significant shift in how these companies are pursuing growth. We think this sets the stage for a modest thawing in FY'24 as companies continue to prove out their valuation while showing investors a path to profitability,” said BTIG.

The brokerage added that over the next several years, it sees potential for more private-to-public market transitions which should take PropTech from being on the periphery to more mainstream.

More on SmartRent

• SmartRent: Heading In The Right Direction
• Seeking Alpha’s Quant Rating on SmartRent
• Historical earnings data for SmartRent

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