The Globe and Mail reports in its Wednesday, Aug. 17, edition that Canaccord Genuity analyst Doug Taylor has downgraded MCI Onehealth Technologies to "hold" from "speculative buy," warning that its balance sheet flexibility is "waning." The Globe's David Leeder writes that Mr. Taylor knocked his share target down by 50 cents to $1.50. Analysts on average target the shares at $2.15. MCI's latest quarterly report fell short of Mr. Taylor's expectations. Mr. Taylor says in a note: "Another quarter of heightened cash burn has limited the company's balance sheet flexibility. We'd prefer to see a positive and more consistent EBITDA performance in order to better discount the growth potential. ... MCI ended the quarter with $1-million in cash (vs. $3.4-million in Q1) and has $6-million in available liquidity including unused credit capacity, which was recently boosted by a shareholder loan facility. While this loan suggests a willingness by principal shareholders to continue to backstop MCI's progress, we believe that the outlook for other shareholders is becoming increasingly clouded by balance sheet and dilution concerns. ... This balance sheet risk weighs on our willingness to discount growth initiatives."
© 2023 Canjex Publishing Ltd. All rights reserved.