908 Devices Is Well Positioned, Analyst Says While Initiating Coverage

908 Devices Is Well Positioned, Analyst Says While Initiating Coverage
  • Stephens has initiated coverage on 908 Devices Inc MASS with an Overweight rating and a price target of $14.
  • The analyst notes the company has healthy gross margins in the mid-50%s, with the potential for this to move toward ~60% over time. 
  • Since going public in 2021, 908 has invested heavily in its commercial efforts, including growing its salesforce to ~80 from ~30. 
  • In addition, the company has invested in R&D, thus resulting in negative EBITDA. Stephens notes that this remains the case in the near term, but over the long term, operating leverage should result in a path to profitability.
  • 908 is burning ~$30 million of cash in 2023, declining over time, so MASS is well positioned from a balance sheet perspective to support organic efforts over the coming years. 
  • The analyst says investors need to be paying more attention. The near-term environment is tricky, so investors likely have some time. Net-net, 908, is well-positioned in rapidly growing end markets, and the industry is moving in its direction, says Stephen analyst.
  • Price Action: MASS shares are up 3.21% at $10.29 on the last check Tuesday.

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