Wunderlich Securities Reiterates Sell, $0.50 PT on A123 Systems, Weak Q1
Wunderlich Securities reiterates its Sell rating and $0.50 PT on A123 Systems (NASDAQ: AONE) following a negative 834% gross profit in the company's latest 10-Q
Wunderlich Securities comments, "Yesterday, A123 Systems (AONE) reported 1Q12 results and there were few surprises because the company preannounced the results last week. We lifted an eyebrow about the hit to gross profit margins - and which we feel clearly shows that prior quarters were overstated, but that is for the auditors to figure out. Our view is that the company will have significant difficulty building a client base with a "going concern" clause. Customers need to know if the company will be around in seven years to honor the warranty and now, once again, there will be doubt. We reiterate our Sell rating and our $0.50 price target, which would be zero except that we think the factory has some residual scrap value."
AONE closed at $0.96 on Tuesday.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.