Bernstein SocGen Group analysts downgraded Surf Air Mobility Inc (SRFM) from Outperform to Market Perform with a price target of $0.40 (from $3.62).
Analysts comment: “SRFM is working to electrify aircraft (starting with a hybrid-electric powertrain and existing airframe to speed time to market) and create a digital marketplace for regional air mobility (RAM) players and customers in an effort to meet the dissatisfied
market needs for RAM space. Advances in technology have the potential to open up a significant addressable market for regional air mobility ($12-18 billion by 2035).
Poor capital structure. The company is burning through $16-18 million per quarter, with a quarterly cash balance in the single digit range. Although the company has committed to financing through the GEM facility (as of end-1Q24, SRFM still has the ability to raise $90 million in debt).
completed drawings and up to $296 million in subsequent drawings), resulting in significant dilution that is exacerbated by the stock’s recent performance.”