Shares of Inseego (INSG, Financials) climbed in premarket trading Thursday after Roth MKM upgraded the software-as-a-service solutions provider to Buy and raised its price target to $15 from $13.
Key elements for the upgrade identified by Roth MKM analysts were Inseego's recent balance sheet recapitalization, strong development in its main product lines, and management team track record.
The company observed from Inseego's fourth-quarter projections and third-quarter performance the shift of its Telematics division to ceased operations. With hotspot sales returning by 20% in 2024 and expected to increase around 45% in the year's second half, core product growth remains robust. Projecting an 8% rise in 2025 and over 20% in 2026, analysts predict new product introductions and stronger connections with carriers will further propel expansion in 2025 and 2026.
Having completed its balance sheet recapitalization, Inseego has repurchased or exchanged $147 million of its $162 million convertible debt due in 2025. Following the $52 million cash sale of its Telematics division, the firm anticipates net debt to drop to around $25 million and yearly interest payments to be less than $4 million. This is a notable improvement from the $502 million net debt and $9 million in yearly interest expenditure at the beginning of 2024.
The financial turnaround was stressed by Roth MKM analysts as the first step in setting the business up for ongoing expansion.
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