Category: Uncategorized

Noble Capital Markets Research Report Monday, April 14, 2025

Companies contained in today’s report:

InPlay Oil (IPOOF)/OUTPERFORM – Moving Up in the League Table

InPlay Oil (IPOOF/$0.93 | Price Target: $3.75)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Moving Up in the League Table
Rating: OUTPERFORM

Transformative acquisition closed. InPlay Oil recently closed its acquisition of Cardium light oil focused assets in the Pembina area of Alberta from Obsidian Energy for net consideration of approximately $301 million. The transaction more than doubles InPlay’s total output to 18,750 barrels of oil equivalent per day (boe/d). The assets are 68% weighted in oil and natural gas liquids (NGLs) and have a low decline rate of 22%. Management expects greater production, a lower decline rate, and enhanced operational efficiency. Following the completion of the acquisition, InPlay had 167,636,627 shares issued and outstanding.

Share consolidation. Effective April 14, InPlay will implement a share consolidation based on one common share for six common shares. The consolidation was unanimously approved by the company’s board and by 96.56% of the votes cast during a special meeting of shareholders. Post-consolidation, InPlay will have approximately 27,939,438 common shares issued and outstanding. The shares are expected to begin trading on a post-consolidation basis two to three trading days following the effective date.

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Noble Capital Markets Research Report Friday, April 11, 2025

Companies contained in today’s report:

Saga Communications (SGA)/OUTPERFORM – Is It Time To Buy The Stock?

Saga Communications (SGA/$11.5 | Price Target: $18)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Is It Time To Buy The Stock?
Rating: OUTPERFORM

Attractive opportunity. The SGA stock is down 48% over the past year, which we believe is largely due to macroeconomic uncertainty impacting advertising revenue and a digital segment that is still early in its development. With some of the noise related to the late filing and activist shareholders quelled for the time being, the company is fully focused on its growth strategy. Given that radio stocks typically experience early cycle recoveries, we believe investors should have the SGA shares on their radar screens.

Cost-effective digital growth strategy. A key focus of the company is reducing costs that have no impact on revenue and continuing to emphasize the roll out of its blended digital advertising strategy. Notably, the blended strategy combines radio and digital advertising to provide a consistent message to customers on both mediums and to drive radio listeners to digital platforms. We view the company’s emphasis on the unique strategy favorably.

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Noble Capital Markets Research Report Thursday, April 10, 2025

Companies contained in today’s report:

Snail (SNAL)/OUTPERFORM – Increasing Working Capital

Snail (SNAL/$0.77 | Price Target: $4)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Increasing Working Capital
Rating: OUTPERFORM

Completes a private placement. The Company completed a private placement offering of two unsecured convertible promissory notes for a combined total of $3.3 million. The notes were sold at a 10% discount to the principal amount and will pay a 5% Paid-In-Kind (PIK) annualized dividend. The proceeds will be used to increase working capital to support its projects and game releases in 2025.

Convertible features. The notes are convertible into shares of Class A Common Stock at $5.00 on any trading day during the five trading days prior to the conversion date. The notes mature in February 2026. Interest to be Paid-In-Kind (PIK) on the convertible notes will begin May 2025 and will be paid in 10 equal payments.

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Noble Capital Markets Research Report Wednesday, April 9, 2025

Companies contained in today’s report:

Alliance Resource Partners (ARLP)/OUTPERFORM – A Strong U.S. Economy Relies on Abundant, Affordable and Reliable Energy Sources
V2X (VVX)/OUTPERFORM – New Business; Successful ReFi

Alliance Resource Partners (ARLP/$25.87 | Price Target: $32)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
A Strong U.S. Economy Relies on Abundant, Affordable and Reliable Energy Sources
Rating: OUTPERFORM

Biden-era policies disadvantaged coal-fired power plants. In May 2024, the Environmental Protection Agency published a final rule that amended the Mercury and Air Toxics Standards (MATS) rule to make it more stringent. The rule placed severe burdens on coal-fired power plants and required compliance with standards premised on the application of costly emissions-control technologies that, for many coal plants, were not commercially viable. The new carbon emission rules were expected to accelerate coal-fired power plant retirements.

Taking a pragmatic and realistic approach. On April 8, President Trump took actions through proclamation and executive order to, 1) reinvigorate the U.S. coal industry, 2) protect American energy from state overreach, 3) strengthen the reliability and security of the United States electric grid, and 4) provide two years of relief from stringent Biden-era environmental regulations by allowing certain coal plants to comply with a less stringent version of the MATS rule. Moreover, the actions are intended to reduce regulatory burdens and promote coal exports.

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V2X (VVX/$45.66 | Price Target: $72)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
New Business; Successful ReFi
Rating: OUTPERFORM

COBRA DANE. V2X has been awarded a $62 million contract extension to continue ensuring the operational readiness of the COBRA DANE radar system in Alaska. In addition to ensuring operational readiness, V2X has incorporated various engineering enhancements into this essential system, extending its capabilities and readiness. This full-spectrum support emphasizes V2X’s differentiated capabilities, in our view. The extension work is expected to be completed by March 2027.

TESS ID/IQ. V2X won a seat on the Bridge to Enduring Synthetic Training Environment Tactical Engagement Simulation Systems (TESS). This contract supports the U.S. Army’s TESS devices, a vital component of its live training capabilities, by extending their product life and ensuring they meet the Army’s evolving requirements. The ID/IQ contract includes a ten-year performance period consisting of a five-year base period and two options with a ceiling value of $921 million. This award complements V2X’s previously won $3.7 billion Warfighter Readiness task order.

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Noble Capital Markets Research Report Tuesday, April 8, 2025

Companies contained in today’s report:

Euroseas (ESEA)/OUTPERFORM – Favorable Time Charter Contract for the M/V Monica
GDEV (GDEV)/OUTPERFORM – A More Profitable Growth Outlook

Euroseas (ESEA/$28.13 | Price Target: $44)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Favorable Time Charter Contract for the M/V Monica
Rating: OUTPERFORM

New time charter contract. Euroseas Ltd. executed a time charter contract for the M/V Monica at a gross daily rate of $23,500 for a minimum period of 24 months, with an option to extend to a maximum of 26 months at the charterer’s option. The M/V Monica is a 1,800 twenty-foot equivalent unit (TEU) feeder container ship. The new charter is expected to commence between the end of April and mid-May 2025.

Attractive rate and improved charter coverage. The new time charter is an improvement over the previous contract rate of $16,000 per day and is expected to contribute EBITDA of $12.1 million during the minimum contracted period. The new time charter enhances Euroseas’ charter coverage for the remainder of 2025 and 2026 to ~94% and ~58%, respectively.

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GDEV (GDEV/$9.7 | Price Target: $70)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
A More Profitable Growth Outlook
Rating: OUTPERFORM

Solid Q4 results. The company reported Q4 revenue of $97.5 million, modestly lower than our estimate of $101.0 million, but adj. EBITDA of $12.2 million was substantially better than our estimate of a loss of $1.9 million. The adj. EBITDA beat was largely driven by the company’s efficient use of selling and marketing expenses, which were 25% lower than our estimate.

Key operating metrics. In Q4, the company generated $94 million in bookings and had 292,000 monthly paying users (MPU). Bookings were largely in line with our expectations, while MPUs were modestly lower than we anticipated. Importantly, the decrease in MPU’s moderated from the quarter-over-quarter decrease experienced in Q3, and the company’s strategic marketing efforts appear to be gaining traction.

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Noble Capital Markets Research Report Monday, April 7, 2025

Companies contained in today’s report:

E.W. Scripps (SSP)/OUTPERFORM – Plenty Of Near Term Catalysts

E.W. Scripps (SSP/$2.38 | Price Target: $10)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Plenty Of Near Term Catalysts
Rating: OUTPERFORM

Notes from recent investor meetings. This report highlights comments from Jason Combs, CFO, and Carolyn Micheli, VP Corp. Communications, on a Non-Deal Roadshow to California on April 2, 2025. Topics of discussion included the timing of debt refinancings, deregulation prospects, current advertising environment, Retransmission growth, and revenue prospects from the implementation of a new broadcast standard, ATCS 3.0. 

Debt refi to be completed imminently. The company is expected to imminently announce the securitization of $450 million of its accounts receivable, with a portion of the proceeds to be used to pay down its 2026 term loan and extending its revolver to mid-2027. Notably, the interest rate on the refi is a modest 70 basis points above the original revolver. The company also pushed the maturities of its 2026 term loan and 2028 term loan 2 years and 1 year, respectively. 

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Noble Capital Markets Research Report Friday, April 4, 2025

Companies contained in today’s report:

FreightCar America (RAIL)/OUTPERFORM – While the Tariff Overhang is Removed, RAIL Shares Remain Undervalued
Resources Connection (RGP)/OUTPERFORM – Challenges Remain, But Some Positive Signs

FreightCar America (RAIL/$5 | Price Target: $13.5)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
While the Tariff Overhang is Removed, RAIL Shares Remain Undervalued
Rating: OUTPERFORM

No direct tariff impact. While the Trump administration recently announced sweeping new tariffs, goods from Mexico and Canada that comply with the United States-Mexico-Canada Agreement (USMCA) trade agreement remain exempt from tariffs, except for automobile exports and steel and aluminum, which fall under separate tariffs. FreightCar America sources most of its raw materials, including aluminum, from the United States.

Return to business as usual. FreightCar America, along with customers in its addressable markets, have greater certainty regarding tariff policies, which could promote a return to business as usual for those that might have previously deferred orders due to uncertainty. While the Trump administration’s trade policies could have implications for U.S. and global economic growth, we believe the tariffs are negotiable. Importantly, because RAIL continues to increase its market share serving an industry that is in a replacement cycle, we do not anticipate a change in RAIL’s near-term sales trajectory despite the potential for slower economic growth.

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Resources Connection (RGP/$5.32 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Jacob Mutchler jmutchler@noblefcm.com |
Challenges Remain, But Some Positive Signs
Rating: OUTPERFORM

3Q25 Results. Results came in-line or better than management’s expectations. Revenue was $129.4 million, modestly short of our $132 million estimate. Gross margin of 35.1% was just above the high end of guidance and our 34.8% estimate. The bottom line was impacted by a $42 million goodwill impairment charge, resulting in an adjusted loss of $0.08/sh for the quarter.

Challenging Environment. The professional services environment remains challenging, especially in the U.S., given the economic uncertainty. However, the Company is seeing positive signs in the International business. Several key performance indicators, including bill rate increases, sizeable pipeline expansion, and the return of $1M+ project pursuits, point to a brighter future.

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Noble Capital Markets Research Report Thursday, April 3, 2025

Companies contained in today’s report:

GDEV (GDEV)/OUTPERFORM – Marketing Strategy Hits Its Stride
Government Solutions (Government Solutions) – New ICE Emergency Funding?
MariMed Inc (MRMD)/OUTPERFORM – A Cannabis Brands Company; Initiating Coverage

GDEV (GDEV/$10.87 | Price Target: $70)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Marketing Strategy Hits Its Stride
Rating: OUTPERFORM

Solid Q4 results.  The company reported Q4 revenue of $97.5 million, modestly lower than our estimate of $101.0 million, but adj. EBITDA of $12.2 million was substantially better than our estimate of a loss of $1.9 million, as illustrated in Figure #1 Q4 Results. The adj. EBITDA beat was largely driven by the company’s efficient use of selling and marketing expenses, which was 25% lower than our estimate.

Key operating metrics. In Q4, the company generated $94 million in bookings and had 292,000 monthly paying users (MPU). Bookings were largely in line with our expectations, while MPUs were modestly lower than we anticipated. Importantly, the decrease in MPU’s moderated from the quarter-over-quarter decrease experienced in Q3, and the company’s strategic marketing efforts appear to be gaining traction.

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Government Solutions
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
New ICE Emergency Funding?

Emergency Funding. On Tuesday, the Department of Homeland Security submitted on SAM.gov for an emergency detention and related services strategic sourcing vehicle to bring an additional allotment of detention beds online nationwide, in compliance with the President’s Declaration of a National Emergency at the Southern Border of the United States and related Executive Orders. The maximum ceiling value of the vehicle is $45 billion.

Details. Under the RFP, the government anticipates making multiple indefinite delivery/indefinite quantity (IDIQ) contract awards. It appears the contract will have a two-year period of performance, from April 14, 2025, through April 13, 2027.  Responses are due by April 4th. Under the scope of work, the vendor may be required to provide infrastructure, staffing, services, and/or supplies necessary to provide safe and secure confinement for aliens in the administrative custody of ICE. Ground transportation services may also be required.

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MariMed Inc (MRMD/$0.09 | Price Target: $0.25)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
A Cannabis Brands Company; Initiating Coverage
Rating: OUTPERFORM

Initiating Research Coverage. We are initiating research coverage of MariMed, Inc. with an Outperform rating and a $0.25 price target. MariMed is a cannabis brand powerhouse, in our view, with leading market shares in current markets and significant expansion potential both within existing markets and new greenfield markets.

MSO. With operations in six states, MariMed is a vertically integrated seed-to-sale cannabis provider. Following in the footsteps of successful consumer brands companies, MariMed has three market leading brands across its operations. We expect the Company to benefit from the growth of its brands in growing markets as well as the addition of new markets in Ohio, Illinois, and Delaware in 2025. 

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Noble Capital Markets Research Report Wednesday, April 2, 2025

Companies contained in today’s report:

Xcel Brands (XELB)/OUTPERFORM – Focused On Licensing Development

Xcel Brands (XELB/$3.05 | Price Target: $17.5)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Focused On Licensing Development
Rating: OUTPERFORM

Industry dynamics. The QVC Group recently announced that it is laying off 900 employees as part of its effort to become a live social shopping company. Notably, while we don’t anticipate QVC will stop live selling on traditional TV, the increased focus on social commerce is illustrative of changing consumer viewing habits. In our view, XCEL Brands is well positioned to benefit from shift in viewing habits toward streaming alternatives.

Valuable expertise. XCEL Brands is a veteran in the live selling space and has extensive experience working with celebrities to help bring their products to market and help them sell. In our view, the company is well positioned to provide celebrities with expertise both in traditional TV and social commerce selling, or live streaming.

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Noble Capital Markets Research Report Tuesday, April 1, 2025

Companies contained in today’s report:

Aurania Resources (AUIAF)/OUTPERFORM – Making Progress on Multiple Fronts
Cocrystal Pharma (COCP)/OUTPERFORM – FY2024 Reported With Clinical Trials On Schedule
Unicycive Therapeutics (UNCY)/OUTPERFORM – FY2024 Reported As The Countdown To OLC PDUDFA Date Begins

Aurania Resources (AUIAF/$0.24 | Price Target: $0.55)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Making Progress on Multiple Fronts
Rating: OUTPERFORM

Concession renewal in Ecuador. In March, Aurania filed the appropriate documentation for the 2025 renewal of its 42 mineral exploration concessions in southeastern Ecuador, along with a request to enter into an agreement for payment of the annual concession fees. The request was accepted, and the company is working with various governmental departments to negotiate an agreement. Aurania considers that by filing the concession renewals prior to the March 31 deadline, it maintains its property in Ecuador in good standing while a payment agreement is being finalized.

Kuri-Yawi IP geophysical survey. An induced polarization survey was completed at the Kuri-Yawi epithermal gold target in late 2024. The survey confirmed the presence of a conductive area, which could be an epithermal conduit that Aurania has been targeting. Aurania’s geologists are currently studying and comparing data compiled to date from the IP survey, an airborne magnetic survey, field work, previous drilling data, and a MobileMT survey to define the best possible drill hole locations for a future drilling program.

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Cocrystal Pharma (COCP/$1.42 | Price Target: $10)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
FY2024 Reported With Clinical Trials On Schedule
Rating: OUTPERFORM

Fourth Quarter and FY2024 Reported. Cocrystal reported a 4Q24 loss of $3.1 million or $(0.31) per share and a FY2024 loss of $17.5 million or $(1.72) per share. The company reviewed the progress it has made in 4Q24 and YTD with CC-988 for norovirus/coronavirus and with CPI-42344 for influenza. The cash balance on December 31, 2024, was $9.9 million.

Human Challenge Study Planned For CC-988 In Norovirus. Cocrystal is planning a human challenge study to test CC-988, its protease inhibitor for norovirus and coronaviruses. The new trial follows the results of the Phase 1 ascending dose studies announced in December 2024, showing safety and tolerability. Results from an additional high-dose cohort are expected in 2Q25. The Phase 2a human challenge study is expected to begin later in 2025.

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Unicycive Therapeutics (UNCY/$0.57 | Price Target: $7)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
FY2024 Reported As The Countdown To OLC PDUDFA Date Begins
Rating: OUTPERFORM

FY2025 Made Significant Progress. Unicycive reported a 4Q loss of $21.7 million or $(0.20) per share and a loss of $37.8 million or $(0.56) per share for FY2024. Cash on December 31, 2024 was $26.1 million. The most significant development, in our opinion, is the June 28, 2025, PFUFA date by which the FDA is required to answer to the Oxylanthanum (OLC) NDA.

OLC Launch is expected in Late 2025. The PDUFA date of June 28, 2025, is the statutory date by which the FDA is required to answer the NDA application. We expect OLC to be approved, based on its clinical trial data showing equivalence to lanthanum (Fosrenol, from Shire) with easier dosing, better patient compliance, and more patients reaching the target range for phosphate levels. An estimated 70% of the renal dialysis patients do not have adequate phosphate control. We believe its lower pill burden and improved patient compliance will lead to better outcomes with fewer morbidity events, leading to a strong market share.

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Noble Capital Markets Research Report Monday, March 31, 2025

Companies contained in today’s report:

Snail (SNAL)/OUTPERFORM – 2025 To Headline Diversification Efforts

Snail (SNAL/$1.04 | Price Target: $4)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
2025 To Headline Diversification Efforts
Rating: OUTPERFORM

Solid Q4 results. The company reported Q4 revenue and adj. EBITDA of $26.2 million and $1.6 million, respectively. While revenue was modestly better than our estimate of $25.0 million, adj. EBITDA was a tad softer. Notably, the variance in adj. EBITDA was driven by an increased focus on in-house development, resulting in higher R&D costs. We view the company’s efforts to diversify its revenue stream as a favorable development.

Portfolio expansion. The company has been taking steps to offer more games and products that could drive revenue diversification. Notably, the company launched ARK: Ultimate Mobile Edition in December and gained over 2 million users during the month. Additionally, the company soft launched a new mobile app, SaltyTV, which offers original short film content. Furthermore, the company acquired eleven games in 2024, with several releases expected in 2025.

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Noble Capital Markets Research Report Friday, March 28, 2025

Companies contained in today’s report:

Century Lithium Corp. (CYDVF)/OUTPERFORM – Preparing for the Inevitable Upturn in Lithium Demand and Pricing
Direct Digital Holdings (DRCT)/MARKET PERFORM – With Revenues On The Mend, Attention Turns To Debt Refinancing
GeoVax Labs (GOVX)/OUTPERFORM – 4Q24 Reported With Updates On Upcoming Clinical Trials
Steelcase (SCS)/OUTPERFORM – Order Growth Remains Solid in 4Q25

Century Lithium Corp. (CYDVF/$0.3 | Price Target: $2.3)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Preparing for the Inevitable Upturn in Lithium Demand and Pricing
Rating: OUTPERFORM

Investor webinar. Century Lithium recently discussed the Angel Island Lithium project during an insightful investor webinar. Key highlights included: 1) Angel Island is an advanced project with one of the largest lithium deposits in the United States, 2) the project employs a proven patent-pending process for chloride leaching, along with direct lithium extraction to produce lithium carbonate, 3) Century has a secured a 1,770 acre-feet per year water rights permit, and 4) the company has demonstrated its ability to consistently produce battery grade lithium carbonate on-site at its pilot plant in Amargosa Valley, Nevada.

Updated feasibility study. Century Lithium recently completed an initial internal optimization study of the project and identified potential cost reductions of up to 25%, or $395.2 million, associated with the project’s Phase I capital expenditures totaling $1,580.7 billion. We think additional cost-reduction measures could apply to the second and third production phases of the project. Century expects to complete an updated feasibility study as early as by year-end.

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Direct Digital Holdings (DRCT/$1.33)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
With Revenues On The Mend, Attention Turns To Debt Refinancing
Rating: MARKET PERFORM

Q4 in line with previously revised guidance. Q4 and full year 2024 revenue of $9.1 million and $62.3 million, respectively, were in line with the company’s revised guidance but were below our expectations of $14.5 million and $67.7 million, respectively. Consequently, an adj. EBITDA loss of $3.4 million was below our estimate of a loss of $2.3 million. We believe that investors will likely focus on the revenue outlook, which appears encouraging. 

A sanguine revenue outlook. Management highlighted recent client “wins”, which are expected to be reflected starting in Q2. We believe that this gave management confidence to provide full year 2025 revenue guidance of $90 million to $110 million. The high margin Buy Side segment is expected to be a key area of focus to grow revenue and achieve improved cash flow. 

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GeoVax Labs (GOVX/$1.27 | Price Target: $12)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
4Q24 Reported With Updates On Upcoming Clinical Trials
Rating: OUTPERFORM

4Q24 Meets Expectations As Pipeline Advances. GeoVax reported 4Q24 loss of $8.3 million or $(0.88) per share and a loss of $25.0 million or $(4.82) per share for FY2024. The company updated its three clinical programs with CM04S1, the Gedeptin Phase 2, and the MVA program, which continue to make progress as expected. On December 31, 2024, cash on hand was $5.5 million, excluding the proceeds of a $4.5 million offering completed in March 2025.

Clinical Supplies Were Made for the CM04S1 Phase 2b BARDA Trial. Geovax has manufactured clinical supplies for the Phase 2b trial, testing CM04S1 as a booster for healthy adults who have received an mRNA vaccine against COVID-19. This trial is sponsored by a BARDA grant, with estimated revenues of $25 to $45 million for the company, plus about $350 million allocated for direct clinical trial expenses. The trial is now expected to begin late in 2025 to early 2026.

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Steelcase (SCS/$11.3 | Price Target: $16)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Order Growth Remains Solid in 4Q25
Rating: OUTPERFORM

4Q Results. Revenue of $788 million rose 1.7% y-o-y, exceeded our expectation of $775 million, and was at the high end of guidance. Impacted by the revenue mix, gross margin of 31.9% was below our 33.3% projection. Adjusted EBITDA came in at $40.4 million, below our $52.5 million projection. Net income, aided by $21.8 million of favorable tax items, totaled $27.6 million, or $0.23/sh. Adjusted EPS was $0.26, up from $0.23 last year.

Promising Order Growth. Organic order growth in the fourth quarter was 9%, driven by a 12% increase in Americas orders and 1% International order growth. This was the sixth consecutive quarter of year-over-year order growth in the Americas, reflecting continued gains in market share, in our view. Order growth was seen across most customer segments, with especially strong growth from large corporate and government customers.

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Noble Capital Markets Research Report Thursday, March 27, 2025

Companies contained in today’s report:

Snail (SNAL)/OUTPERFORM – A First Look At Q4 Results

Snail (SNAL/$1.62 | Price Target: $4)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
A First Look At Q4 Results
Rating: OUTPERFORM

Solid Q4 results. The company reported Q4 revenue and adj. EBITDA of $26.2 million and $1.6 million, respectively. While revenue was modestly better than our estimate of $25.0 million, adj. EBITDA was a tad softer, as illustrated in Figure #1 Q4 Results. Notably, the variance in adj. EBITDA was driven by an increased focus on in-house development, resulting in higher R&D costs. We view the company’s efforts to diversify its revenue stream as a favorable development.

Portfolio expansion. The company has been taking steps to offer more games and products that could drive revenue diversification. Notably, the company launched ARK: Ultimate Mobile Edition in December and gained over 2 million users during the month. Additionally, the company soft launched a new mobile app, SaltyTV, which offers original short film content. Furthermore, the company acquired eleven games in 2024, with several releases expected in 2025.

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Noble Capital Markets Research Report Tuesday, March 25, 2025

Companies contained in today’s report:

SKYX Platforms (SKYX)/OUTPERFORM – Expecting Revenue Growth Momentum Throughout 2025
Tonix Pharmaceuticals (TNXP)/OUTPERFORM – FDA Sends Positive Signal For Tonmya Approval With No Advisory Committee Meeting Needed

SKYX Platforms (SKYX/$1.35 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Expecting Revenue Growth Momentum Throughout 2025
Rating: OUTPERFORM

Favorable revenue growth. The company reported 7% year-over-year revenue growth to $23.7 million, largely in line with our estimate of $24.0 million. The adj. EBITDA loss of $3.8 million was greater than our estimated loss of $2.1 million, due to gross margin compression resulting from a shift in product mix on the company’s lighting website.

Mandatory standardization application. Management noted that the company’s team responsible for applying the mandatory standardization to the National Electrical Code believes it will receive assistance from certain key organizations during its application process. This is due to the significant safety advantages of the company’s technology. We view this development favorably, as the prospect of mandatory standardization represents a potentially transformative revenue opportunity for the company.

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Tonix Pharmaceuticals (TNXP/$30.51 | Price Target: $70)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
FDA Sends Positive Signal For Tonmya Approval With No Advisory Committee Meeting Needed
Rating: OUTPERFORM

No Advisory Panel Required. Tonix has been informed that the FDA will not require an Advisory Committee Meeting to determine approvability of the NDA for Tonmya (TNX-102 SL). We see this as a sign that the NDA review has not raised questions about the clinical trial data, potential patient use, or other factors that would be answered by an Advisory Committee. Since the trial met its primary endpoint and all six secondary endpoints with high statistical significance, we interpret this to be a positive sign.

FDA Advisory Panel Hearings Evaluate and Provide Insight To Trial Data. As part of its NDA review process, the FDA may schedule an Advisory Committee hearing. The committee members each bring expertise in aspects of clinical practice, research, or statistical analysis. At a hearing, the company presents its analysis of the trial and the data, followed by the FDA’s analysis. The Committee members then ask questions to make recommendations for or against NDA approval and/or product labeling. We see the review without an Advisory Committee as a sign that the FDA does not need additional information on efficacy or safety.

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Noble Capital Markets Research Report Monday, March 24, 2025

Companies contained in today’s report:

Eledon Pharmaceuticals (ELDN)/OUTPERFORM – All’s Well That Continues Well For Tegoprubart
The GEO Group (GEO)/OUTPERFORM – An Investor Day Full of Opportunity; Raising PT to $35
Xcel Brands (XELB)/OUTPERFORM – Reverse Split Addresses NASDAQ Listing Requirement

Eledon Pharmaceuticals (ELDN/$3.51 | Price Target: $10)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
All’s Well That Continues Well For Tegoprubart
Rating: OUTPERFORM

Eledon Reported 4Q24 Results and Reviewed Progress During The Quarter. Eledon reported a loss for 4Q24 of $44.6 million or $(0.64) per share and $36.2 million or $(0.75) per share for FY2024. Cash and equivalents on December 31, 2024 was $140.2 million, which is expected to fund operations through YE2026. Based on our estimated loss for 1Q25, we project the cash balance on March 31, 2025 to be about $115 million to $120 million.

Tegoprubart Has Clinical Trial Milestones Ahead.  Enrollment in the Phase 2 BESTOW trial for prevention of kidney transplant rejection was completed ahead of schedule in August 2024 due to higher than anticipated interest from transplant surgeons. We anticipate top-line results in 4Q25. The Phase 1b open-label trial continues to evaluate patients and is expected to provide an interim data update in mid-year 2025.

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The GEO Group (GEO/$28.23 | Price Target: $35)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
An Investor Day Full of Opportunity; Raising PT to $35
Rating: OUTPERFORM

Investor Day. The GEO Group hosted an investor day at the end of last week, during which the Company outlined the substantial growth opportunities available under the new programs to manage undocumented migrants, as well as its goal to both significantly reduce debt and return capital to shareholders.

Secure Facilities. There is an immediate need from ICE for additional detention capacity. This is illustrated by the new contract for GEO’s 1,800 bed North Lake Facility announced last Thursday. This new contract will add $70 million of annualized revenue. Management estimates currently unused bed capacity (including the three facilities recently contracted by ICE) could add $575-$625 million to revenue.

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Xcel Brands (XELB/$0.32 | Price Target: $17.5)
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Jacob Mutchler jmutchler@noblefcm.com |
Reverse Split Addresses NASDAQ Listing Requirement.
Rating: OUTPERFORM

Reverse split. On March 21, 2025, the company announced a one-for-ten reverse stock split that will take effect at market open on March 25, 2025. Notably, we view the reverse split as a favorable development in the company’s efforts to satisfy NASDAQ’s minimum share price listing requirement of $1. In order to meet NASDAQ’s listing requirement, the XELB shares will need to close above $1 for ten consecutive trading days. Given the current share price of $0.32, we believe the company will likely regain NASDAQ compliance following the reverse split.

Reverse split details. In connection with the reverse split, the company will pay out cash considerations in lieu of issuing fractional shares, and proportionately adjust the underlying common stock and exercise prices of outstanding stock options and warrants. Additionally, the company will continue to trade under the XELB ticker, but will use a new CUSIP number of 98400M200.

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Noble Capital Markets Research Report Friday, March 21, 2025

Companies contained in today’s report:

Euroseas (ESEA)/OUTPERFORM – EuroHoldings Spin-Off and a New Time Charter Contract
Resources Connection (RGP)/OUTPERFORM – Attractive Risk/Reward

Euroseas (ESEA/$31.22 | Price Target: $51)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
EuroHoldings Spin-Off and a New Time Charter Contract
Rating: OUTPERFORM

New time charter contract. Euroseas executed a new time charter contract for the M/V Rena P, a 4,250 twenty-foot equivalent unit (TEU) intermediate containership. The charter contract is at a gross daily rate of $35,500 for a minimum period of 35 months and a maximum period of 37 months at the charterer’s option. The contract is expected to take effect on August 21, 2025, in continuation of its present charter. The contract is anticipated to contribute roughly $29.0 million in EBITDA during the minimum contract period. The new contract strengthens the company’s charter coverage to 88% in 2025 and 54% in 2026.

Updating estimates. The new charter contract for $35,500 represents a significant improvement compared to the previous rate of $21,000. Consequently, we have increased our 2025 adjusted EBITDA and EPS estimates to $145.1 million and $14.20, respectively, from $139.1 million and $13.35. In addition to the M/V Rena P, our estimates reflect updated time charter contract information for the M/V Marcos, M/V Synergy Antwerp, M/V Synergy Keelung, and M/V EM Hydra.

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Resources Connection (RGP/$6.85 | Price Target: $15)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Attractive Risk/Reward
Rating: OUTPERFORM

3Q25. With earnings expected on April 2nd, we continue to favor RGP shares. We expect 3Q25 results to remain muted, given the ongoing economic uncertainty and elongated decision times. Nonetheless, we believe RGP’s rich portfolio of diversified offerings encompassing professional staffing support, consulting, and outsourced services creates a strategic powerhouse that we believe will drive value for investors over the long term.

Increased Efficiency in a Growing Market. The global professional services industry is projected to increase by a 6% CAGR over the next five years, growing to $95 billion, according to research published by Statista. With RGP implementing a new technology platform, which will enable increased use of artificial intelligence and automation in the delivery of services as well as back-office operations, we expect the combination of greater revenue and increased efficiency to drive significant results once the economy improves.

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Noble Capital Markets Research Report Thursday, March 20, 2025

Companies contained in today’s report:

Hemisphere Energy (HMENF)/OUTPERFORM – Strong Cash Flow Supported 2024 Growth and Return of Capital
Tonix Pharmaceuticals (TNXP)/OUTPERFORM – Fourth Quarter Reported As Tonmya PDUFA Approaches

Hemisphere Energy (HMENF/$1.29 | Price Target: $2.35)
Mark Reichman mreichman@noblefcm.com | (561) 999-2272
Hans Baldau hbaldau@noblefcm.com |
Strong Cash Flow Supported 2024 Growth and Return of Capital
Rating: OUTPERFORM

Reserve report. Hemisphere released results from its independent reserve evaluation as of December 31, 2024. Compared to the year-end 2023 reserve report, proved developed producing (PDP) reserves increased 13.1% to 9,302.2 thousand barrels of oil equivalents. The growth in PDP reserves replaced 186% of 2024 production. Hemisphere’s estimated 2024 capital expenditures of ~C$22 million funded PDP reserve growth, annual production growth of ~10%, additional infrastructure, and the testing of a new resource play in Saskatchewan with an enhanced oil recovery (EOR) polymer pilot project.

Outlook for 2025. Hemisphere expects 2025 capital expenditures of ~C$17 million which are expected to support ~15% growth in annual average production to 3,900 barrels of oil equivalent per day (boe/d) compared to 2024. Most of the capital will be allocated to drilling, optimization, and facility work, with ~10% allotted to exploration and land acquisition. The majority of the planned expenditures are scheduled for the third quarter of 2025, providing the company with the flexibility to adjust plans based on changes in commodity prices.

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Tonix Pharmaceuticals (TNXP/$16.47 | Price Target: $70)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
Fourth Quarter Reported As Tonmya PDUFA Approaches
Rating: OUTPERFORM

Fourth Quarter Reported With Product Development Updates. Tonix reported 4Q Net Loss to Common Shareholders of $22.1 million or $(9.77) per share and $130.0 million or $(176.60) per share for FY2024. Total Product sales were $10.1 million with Gross Margin averaging 23% for the full year. The company ended FY2024 with $98.8 million in cash then raised $46.3 million in 1Q25. Including our expected loss for 1Q25, we estimate cash on March 31 to be around $125 million and believe the company has sufficient operating funds into FY2026.

Preparations For Tonmya Are In Progress. Tonix has been assigned a PDUFA date of August 15, 2025, the statutory date for the FDA to answer its NDA for Tonmya (TNX-102 SL). We believe the Phase 3 trials justify approval for fibromyalgia and anticipate broad use for relief of its multiple symptoms. Based on its patient population of over 10 million patients, we believe Tonmya could be a significant revenue generator for Tonix.

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Noble Capital Markets Research Report Wednesday, March 19, 2025

Companies contained in today’s report:

Bitcoin Depot (BTM)/OUTPERFORM – Poised for a Return Toward Revenue Growth
Conduent (CNDT)/OUTPERFORM – Building Operational Momentum for a Strong 2026
Gyre Therapeutics, Inc (GYRE)/OUTPERFORM – 4Q24 Reported With Hydronidone (F351) Data Coming In 2Q25
Kratos Defense & Security (KTOS)/OUTPERFORM – Some More Business Wins
SKYX Platforms (SKYX)/OUTPERFORM – Pre-Releases Solid Q4 Revenue

Bitcoin Depot (BTM/$1.41 | Price Target: $7)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Poised for a Return Toward Revenue Growth
Rating: OUTPERFORM

Solid Q4 results. The company reported sequential revenue growth in Q4 with revenue of $136.8 million (up from $135.3 million in Q3), better than our estimate of $125.1 million. Adj. EBITDA was $12.0 million, better than our estimate of $6.4 million.

Margin improvement. The strong adj. EBITDA margins of 8.8% in Q4 were the highest of any quarter in 2024. The impressive margins were driven by better transaction spreads at the company’s kiosks, armored transport cost reductions, and lower rents in some kiosk locations. Moreover, the company benefitted from a falloff of initial public company costs (in comparison to the prior year period). 

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Conduent (CNDT/$2.99 | Price Target: $7)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Building Operational Momentum for a Strong 2026
Rating: OUTPERFORM

2025 preview. We anticipate that the company’s revenue momentum will build throughout the year as new business signings take effect. Moreover, with the prospect of additional efficiencies from initiatives such as corporate-level cost reductions, and a reduction in real estate footprint, we expect adj. EBITDA margins to expand as the year progresses.

Quarterly outlook. In Q1, we expect $767 million in revenue and $14 million in adj. EBITDA, a modest 1.8% margin. However, based on growing revenue and increasing efficiency, we expect adj. EBITDA margins to improve in each subsequent quarter, culminating in margins of nearly 8% in Q4. Given our Q4 revenue estimate of $830 million, we believe the company will exit 2025 with revenue and adj. EBITDA run rates in line with its stated target ($3.2B-$3.3B in annual revenue and 8% adj. EBITDA margins).

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Gyre Therapeutics, Inc (GYRE/$8.57 | Price Target: $20)
Robert LeBoyer rleboyer@noblefcm.com | (212) 896-4625
4Q24 Reported With Hydronidone (F351) Data Coming In 2Q25
Rating: OUTPERFORM

Net Income Was Within Expectations. Gyre Therapeutics reported 4Q24 Net Income Attributable to Common Shareholders of $(0.1) million or $(0.00) per share and FY2024 Net Income of $12.1 million, or $0.14 per basic share and $0.05 per fully diluted share. Revenues were $105.8 million in FY2024 with gross margins of 96.3%, consistent with our revenue estimates of $101.4 million and 96.2% gross margins. As of December 31, 2024, cash on hand was $51.2 million. Separately, results of the Phase 3 clinical trial for Hydronidone will be announced in 2Q25.

Hydronidone Data Announcement Pushed To 2Q25. In its quarterly press release, the company stated that data from the Phase 3 clinical trial for Hydronidone will be announced in 2Q25, although we had expected the data in 1Q25. We do not see this as a significant delay, as it extends the timeframe by 2 to 14 weeks. We believe this can still allow for regulatory filing in China during FY2025.

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Kratos Defense & Security (KTOS/$31.25 | Price Target: $38)
Joe Gomes, CFA jgomes@noblefcm.com | 561-999-2262
Joshua Zoepfel jzoepfel@noblefcm.com |
Some More Business Wins
Rating: OUTPERFORM

Business Wins. Kratos has been awarded a number of new and additions to existing contracts in March. We view these developments positively, although we remain watchful as to the impact of the ongoing continuing resolution for the Federal budget and its implications on new awards in 2025.

BQM-177A Awards. Kratos was awarded $3.4 million from the U.S. Navy for the base year of its next Contractor Logistics Support and Engineering Services contract, supporting BQM-177A aerial target system operations. If all four option years awarded under this contract are exercised, this contract has a potential value of  $19.1 million. The Company also received $59.3 million for an additional 70 BQM-177A Subsonic Aerial Target aircraft through the exercise of the contract option for Full Rate Production (FRP) Lot 6.

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SKYX Platforms (SKYX/$1.17 | Price Target: $5)
Patrick McCann, CFA pmccann@noblefcm.com | (314) 724-6266
Michael Kupinski mkupinski@noblefcm.com | (561) 994-5734
Pre-Releases Solid Q4 Revenue
Rating: OUTPERFORM

Q4 pre-release. On Monday, SKYX pre-released its Q4 revenue results, reporting revenue of $23.7 million (largely aligning with our estimate of $24.0 million). Notably, the company’s revenue grew throughout 2024, from $19.0 million in Q1 to $21.4 million, $22.2 million, and $23.7 million, in the subsequent quarters.

Key leadership additions. The company recently announced the additions of Huey Long as Head of E-commerce and Greg St. John as President of Lighting, Fans and Smart Home Products. Mr. Long previously served as director of e-commerce for Amazon and as an executive at both Ashley Furniture and Walmart. Mr. St. John previously served as head of lighting at Home Depot as well as CEO of EGLO.

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Wednesday, April 02, 2025

Xcel Brands, Inc. 1333 Broadway 10th Floor New York, NY 10018 United States https:/Sector(s): Consumer Cyclical Industry: Apparel Manufacturing Full Time Employees: 84 Key Executives Name Title Pay Exercised Year Born Mr. Robert W. D’Loren Chairman, Pres & CEO 1.27M N/A 1958 Mr. James F. Haran CFO, Principal Financial & Accou

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Industry dynamics. The QVC Group recently announced that it is laying off 900 employees as part of its effort to become a live social shopping company. Notably, while we don’t anticipate QVC will stop live selling on traditional TV, the increased focus on social commerce is illustrative of changing consumer viewing habits. In our view, XCEL Brands is well positioned to benefit from shift in viewing habits toward streaming alternatives.

Valuable expertise. XCEL Brands is a veteran in the live selling space and has extensive experience working with celebrities to help bring their products to market and help them sell. In our view, the company is well positioned to provide celebrities with expertise both in traditional TV and social commerce selling, or live streaming.

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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Key Points: – PepsiCo has acquired prebiotic soda brand Poppi for $1.95 billion, strengthening its presence in the functional beverage market. – The deal aligns with growing consumer demand for drinks that support gut health and overall well-being. – The brand, which gained traction after a successful pitch on Shark Tank, will leverage PepsiCo’s resources to expand distribution and innovation.

PepsiCo has announced its acquisition of prebiotic soda brand Poppi for $1.95 billion, marking a significant move into the growing functional beverage category. The transaction includes $300 million in anticipated cash benefits, effectively bringing the net purchase price to $1.65 billion. This deal reinforces PepsiCo’s commitment to diversifying its beverage portfolio to align with shifting consumer preferences toward health-conscious options.

“More than ever, consumers are looking for convenient and great-tasting options that fit their lifestyles and respond to their growing interest in health and wellness,” said PepsiCo Chairman and CEO Ramon Laguarta. The acquisition reflects PepsiCo’s strategy of investing in emerging brands that tap into wellness trends while complementing its existing product lineup.

Poppi, based in Austin, Texas, was founded by Allison Ellsworth, who originally developed the beverage in her kitchen in 2015. Seeking a healthier alternative to traditional sodas, Ellsworth combined fruit juices with apple cider vinegar, sparkling water, and prebiotics to create a gut-friendly drink. After selling Poppi at farmers’ markets, Ellsworth and her husband gained national attention in 2018 by pitching the brand—then called Mother Beverage—on Shark Tank. Investor Rohan Oza saw potential in the product, took a stake in the company, and led its rebranding into Poppi, with its now-iconic bright, fruit-themed packaging.

Ellsworth expressed excitement about the partnership, stating, “We can’t wait to begin this next chapter with PepsiCo to bring our soda to more people – and I know they will honor what makes Poppi so special while supporting our next phase of growth and innovation.” With PepsiCo’s extensive distribution network and marketing resources, Poppi is expected to expand its reach beyond its current stronghold in health-focused consumer markets.

Oza, co-founder of CAVU Consumer Partners—which has invested in beverage brands like Oatly and Bai—echoed this enthusiasm. “We’re beyond thrilled to be partnering with PepsiCo so that even more consumers across America, and the world, can enjoy Poppi.”

The functional beverage market has seen rapid growth as consumers prioritize health benefits in their drink choices. Poppi, with its focus on gut health through prebiotics, has positioned itself at the forefront of this trend. However, the brand has not been without challenges. In 2023, Poppi faced a class-action lawsuit from a consumer alleging that its products do not deliver on their advertised gut health benefits. While the lawsuit remains unresolved, the acquisition by PepsiCo signals confidence in the brand’s long-term potential.

For PepsiCo, this move follows a pattern of acquiring fast-growing health-oriented beverage brands, including Kevita and SodaStream. As competition in the functional drink space intensifies, integrating Poppi into its portfolio will allow PepsiCo to capture a larger share of the evolving market while reinforcing its commitment to innovation in health-conscious beverages.

Key Points: – Initial unemployment claims jumped 22,000 to 242,000, exceeding economists’ forecast of 221,000 – Federal worker layoffs from Trump’s DOGE initiative haven’t yet appeared in federal unemployment data – Consumer confidence in job availability declining despite historically low overall layoff rates

The number of Americans filing new applications for unemployment benefits jumped more than anticipated last week, according to the latest data released by the Labor Department. Initial claims for state unemployment benefits increased by 22,000 to a seasonally adjusted 242,000 for the week ended February 22, significantly exceeding economists’ projections of 221,000 claims.

Despite this unexpected rise, experts caution that the increase may not indicate a fundamental shift in labor market conditions. The Labor Department noted that seasonal adjustment factors—the models used to strip out normal fluctuations from the data—tend to artificially inflate claims figures around this time of year.

The report comes amid growing concerns about potential economic impacts from the Trump administration’s recent policies, particularly the mass layoffs of probationary federal government workers. Many of these employees were terminated around February 14 by the Department of Government Efficiency (DOGE), an entity created by President Trump and led by billionaire Elon Musk.

“These firings likely add up to the biggest layoff in the history of the United States,” said Michele Evermore, a Senior Fellow at the National Academy of Social Insurance and former deputy director for policy in the Labor Department’s Office of Unemployment Insurance Modernization. Evermore warned that “economic pain is contagious” and that federal layoffs could trigger broader economic hardship.

Interestingly, the report showed no immediate impact from these federal workforce reductions in the separate unemployment compensation for federal employees program, which is reported with a one-week lag. However, economists warn that the reduction in money flowing through the economy from lost paychecks and spending cuts could eventually lead to private-sector job losses.

The so-called continuing claims—representing people receiving benefits after an initial week of aid—actually fell by 5,000 to a seasonally adjusted 1.862 million during the week ending February 15. This figure is used when surveying households for February’s unemployment rate, which stood at 4.0% in January.

Despite the overall resilience of the labor market, there are signs that households are growing more anxious about their job prospects. A Conference Board survey published Tuesday revealed that the share of consumers who viewed jobs as “plentiful” dropped to a five-month low in February, while the proportion describing jobs as “hard to get” reached its highest level since October.

For the Federal Reserve, these labor market signals provide critical input as policymakers monitor the economic impacts of the administration’s fiscal, trade, and immigration policies—many of which economists view as potentially inflationary. Minutes from the Fed’s January meeting showed policymakers expressing concern about higher inflation resulting from Trump’s initial policy proposals.

The central bank has maintained its benchmark overnight interest rate in the 4.25%-4.50% range after reducing it by 100 basis points since September 2024. This followed an aggressive tightening cycle that raised rates by 5.25 percentage points in 2022 and 2023 to combat inflation.

For now, historically low layoffs continue to support economic expansion, though upcoming reports will be closely watched for any signs that the federal workforce reductions are beginning to impact broader employment trends.

Research News and Market Data on KTOS

February 26, 2025 at 4:00 PM EST

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           Full Year 2024 Revenues of $1.136 Billion Reflect 9.6 Percent Growth and 9.1 Percent Organic Growth, Respectively, Over Full Year 2023 Revenues of $1.037 Billion

Full Year 2024 Unmanned Systems Revenues of $270.5 Million Reflect 27.5 Percent Growth and 25.1 Percent Organic Growth Over Full Year 2023 Revenues of $212.2 Million

Full Year 2024 KGS Revenues of $865.8 Million Reflect 5.0 Percent Organic Growth of $40.9 Million Over Full Year 2023 Revenues of $824.9 Million

Full Year 2024 Net Income of $16.3 Million and GAAP EPS of $0.11 Per Share

Fourth Quarter 2024 Revenues of $283.1 Million Reflect 3.4 Percent Growth Over Fourth Quarter 2023 Revenues of $273.8 Million

Fourth Quarter 2024 Cash Flow Generated from Operations and Free Cash Flow of $45.6 million and $32.0 million, Respectively

Fourth Quarter 2024 Consolidated Book to Bill Ratio of 1.5 to 1 and Bookings of $434.2 Million

Last Twelve Months Ended December 29, 2024 Consolidated Book to Bill Ratio of 1.2 to 1 and Bookings of $1.354 Billion

2025 Financial Forecast Includes 10 Percent Organic Revenue Growth and 2026 Initial Revenue Growth Forecast of 13 to 15 Percent over 2025 Forecast Based on Recent Program Awards

SAN DIEGO, Feb. 26, 2025 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a Technology Company in the Defense, National Security and Commercial Markets, today reported its fourth quarter 2024 financial results, including Revenues of $283.1 million, Operating Income of $3.0 million, Net Income attributable to Kratos of $3.9 million, Adjusted EBITDA of $25.2 million and a consolidated book to bill ratio of 1.5 to 1.0.

Fourth quarter 2024 Net Income and Operating Income includes non-cash stock compensation expense of $6.8 million, Company-funded Research and Development (R&D) expense of $10.6 million, including efforts in our Space, Satellite, Unmanned Systems and Microwave Electronic businesses, and expense to accrue $3.2 million related to an employee benefit plan assumed by the Company in an acquisition completed in 2011.

Kratos reported fourth quarter 2024 GAAP Net Income attributable to Kratos of $3.9 million and GAAP Net Income per share of $0.03, compared to GAAP Net Income attributable to Kratos of $2.4 million and GAAP Net Income per share of $0.02, for the fourth quarter of 2023. Adjusted earnings per share (EPS) was $0.13 for the fourth quarter of 2024, compared to $0.12 for the fourth quarter of 2023.

Fourth quarter 2024 Revenues of $283.1 million increased $9.3 million, reflecting 3.4 percent organic growth from fourth quarter 2023 Revenues of $273.8 million. Organic revenue growth was reported in both our Unmanned Systems and KGS segments, with KGS growth including increased revenues in Kratos Turbine Technologies, Defense Rocket Systems, Microwave Products, and C5ISR, offset by the previously reported and expected decline of approximately $16.1 million in the Space and Satellite business, including the industry related impact from OEM delays in the manufacture and delivery of software defined satellites.

Fourth quarter 2024 Cash Flow Generated from Operations was $45.6 million, primarily reflecting the receipt of accelerated favorable customer milestone payments, and increases in deferred revenues or customer advanced payments to $76.3 million at the end of the fourth quarter of 2024, up from $61.9 million at the end of the third quarter of 2024. Free Cash Flow Generated from Operations for the Fourth Quarter of 2024 was $32.0 million after funding of $13.6 million of capital expenditures.

For the fourth quarter of 2024, Kratos’ Unmanned Systems (KUS) segment generated Revenues of $61.1 million and organic revenue growth of 10.3 percent, as compared to $55.4 million in the fourth quarter of 2023, primarily reflecting increased target drone sales. KUS’s Operating Loss was $0.7 million in the fourth quarter of 2024, compared to Operating Income of $1.0 million in the fourth quarter of 2023. KUS’s Adjusted EBITDA for the fourth quarter of 2024 was $2.6 million, compared to $4.0 million for the fourth quarter 2023, reflecting revenue mix, the impact of increased material and subcontractor costs on multi-year fixed price contracts and increased R&D costs.

KUS’s book-to-bill ratio for the fourth quarter of 2024 was 1.3 to 1.0 and 1.2 to 1.0 for the twelve months ended December 29, 2024, with bookings of $82.4 million for the three months ended December 29, 2024, and bookings of $326.8 million for the twelve months ended December 29, 2024. Total backlog for KUS at the end of the fourth quarter of 2024 was $295.2 million compared to $273.9 million at the end of the third quarter of 2024 and $239.0 million at the end of the fourth quarter of 2023.

For the fourth quarter of 2024, Kratos’ Government Solutions (KGS) segment Revenues of $222.0 million increased from Revenues of $218.4 million in the fourth quarter of 2023, reflecting a 1.6 percent growth and organic growth rate. The increased Revenues includes organic revenue growth in our Turbine Technologies, C5ISR, Defense Rocket Support and Microwave Products businesses of $19.7 million, offset by the previously reported and expected decline of approximately $16.1 million in the Space and Satellite business.

KGS reported Operating Income of $11.0 million in the fourth quarter of 2024 compared to $17.5 million in the fourth quarter of 2023, primarily reflecting the mix in revenues and resources as well as the expense to accrue $3.2 million in the fourth quarter of 2024 related to a benefit plan assumed by the Company in a previous acquisition. Fourth quarter 2024 KGS Adjusted EBITDA was $22.6 million, compared to fourth quarter 2023 KGS Adjusted EBITDA of $25.1 million, primarily reflecting the mix in revenues and resources.

KGS reported a book-to-bill ratio of 1.6 to 1.0 for the fourth quarter of 2024, a book to bill ratio of 1.2 to 1.0 for the last twelve months ended December 29, 2024 and bookings of $351.8 million and $1.028 billion for the three and last twelve months ended December 29, 2024, respectively. KGS’s total backlog at the end of the fourth quarter of 2024 was $1.150 billion, as compared to $1.020 billion at the end of the third quarter of 2024, and $988.0 million at the end of the fourth quarter of 2023.

Kratos reported consolidated bookings of $434.2 million and a book-to-bill ratio of 1.5 to 1.0 for the fourth quarter of 2024, and consolidated bookings of $1.354 billion and a book-to-bill ratio of 1.2 to 1.0 for the last twelve months ended December 29, 2024. Consolidated backlog was $1.445 billion on December 29, 2024, as compared to $1.294 billion at September 29, 2024 and $1.227 billion on December 31, 2023. Kratos’ bid and proposal pipeline was $12.4 billion at December 29, 2024, as compared to $11.0 billion at December 31, 2023. Backlog at December 29, 2024 included funded backlog of $1.090 billion and unfunded backlog of $355.0 million.

Full Year 2024 Results

Kratos reported its full year 2024 financial results, including Revenues of $1.136 billion, Operating Income of $29.0 million, Net Income attributable to Kratos of $16.3 million, Adjusted EBITDA of $105.7 million and a consolidated book to bill ratio of 1.2 to 1.0.

Included in the full year 2024 Net Income and Operating Income is non-cash stock compensation expense of $29.8 million, Company-funded Research and Development (R&D) expense of $40.3 million, including ongoing development efforts in our Space and Satellite Communications business to develop our first to market, virtual, software-based OpenSpace command & control (C2), telemetry tracking & control (TT&C) and other ground system solutions and ongoing development efforts in our Unmanned Systems and Microwave Products businesses, and an expense to accrue $3.2 million related to an employee benefit plan assumed by the Company in an acquisition completed in 2011.

Kratos reported full year 2024 GAAP Net Income of $16.3 million and GAAP Net Income per share of $0.11, compared to a GAAP Net Loss attributable to Kratos of $8.9 million and a GAAP Net Loss per share of $0.07, for the full year 2023. Adjusted earnings per share (EPS) was $0.49 for the full year 2024, compared to $0.42 for the full year 2023.

Full year 2024 Revenues of $1.136 billion increased $99.2 million, reflecting 9.6 percent growth and 9.1 percent organic growth, including the impact of the Sierra Technical Services, Inc. (STS) acquisition on a pro forma basis as if acquired at the beginning of 2023, respectively, from full year 2023 Revenues of $1.037 billion. Full year 2024 Cash Flow Generated from Operations was $49.7 million, including the receipt of accelerated favorable customer milestone payments, offset partially by working capital uses including increases in inventories, prepaid assets and investments in other assets and reduction of deferred revenues or advanced customer payments. Free Cash Flow Used in Operations was $8.5 million after funding of $58.2 million of capital expenditures. Full year 2024 capital expenditures were elevated due primarily to the manufacture of the two production lots of Valkyries prior to contract award to meet anticipated customer orders and requirements and due to investments related to the expansion and addition of production facilities.

For full year 2024, KUS generated Revenues of $270.5 million, as compared to $212.2 million in the full year 2023, reflecting 27.5 percent growth and 25.1 percent organic growth, including the impact of the STS acquisition on a pro forma basis as if acquired at the beginning of 2023, primarily reflecting increased domestic and international drone activity. KUS’s Operating Income was $2.9 million in full year 2024 compared to $4.2 million in full year 2023. KUS’s Adjusted EBITDA for full year 2024 was $16.3 million, compared to full year 2023 Adjusted EBITDA of $14.8 million, reflecting the increased volume partially offset by increased material and subcontractor costs on multi-year fixed price contracts and increased R&D costs.

For full year 2024, KGS Revenues of $865.8 million increased $40.9 million, reflecting 5.0 percent organic growth from Revenues of $824.9 million in full year 2023. The increased Revenues includes organic revenue growth in our Turbine Technologies, C5ISR, Microwave Products, Defense Rocket Support and Training Solutions businesses aggregating $88.7 million, offset by a reduction of $47.8 million in offset by the Space and Satellite business described previously.

KGS reported operating income of $56.6 million in full year 2024 compared to $52.7 million in full year 2023, primarily reflecting the increased revenue volume. Full year 2024 KGS Adjusted EBITDA was $89.4 million, compared to full year 2023 KGS Adjusted EBITDA of $80.6 million, primarily reflecting the increased revenue.

Eric DeMarco, Kratos’ President and CEO, said, “Kratos’ full year 2024 and fourth quarter demonstrated once again that we can significantly organically grow the business, and make sizable internally funded investments, positioning the Company for accelerating future growth, while also generating significant, positive operating cash flow. We have recently received several large new program and contract awards, including in the hypersonic, target drone, jet engine, rocket, and satellite system areas, enabling us to increase our expected revenue growth rate for 2026 to a range of 13 percent to 15 percent above our current 2025 financial forecast that we provided today, which includes 10 percent growth over 2024. Kratos’ fourth quarter 1.5 to 1.0 book to bill ratio and our $12.4 Billion opportunity pipeline also provides confidence in our expected accelerating future growth trajectory, with increased margins.”

Mr. DeMarco continued, “The Trump Administration has increased emphasis on reducing cost, rapidly fielding new technology and systems and getting more for less, all which are and have been pillars of Kratos’ Mission. At Kratos, “Affordability is a Technology” and “Better is the Enemy of Good Enough Ready to Field Today”, as represented in our Erinyes, Dark Fury and other hypersonic vehicles, our Zeus, Oriole and other rocket systems, and our jet drones, jet engines and propulsion systems. We believe Kratos’ alignment with the new Administration’s objectives will be recognized in increased bookings, increased expected future growth rates and increased future profitability, including as based on recent meetings and discussions with certain of our customers.”

Mr. DeMarco concluded, “After decades of focus on fighting terrorism and asymmetric warfare, the United States has begun a generational rebuild of its industrial base and the ability to deter and defeat Nation State adversaries. The Axis of Resistance and the threat to the U.S. and its Allies is real, and Kratos is a key element of the proven Peace through Overwhelming Strength approach to Global Security and stability. As a result, we expect a future, multiyear, up and to the right organic growth trajectory with increased margins and profitability, and Kratos making the necessary investments in, among other things, property, plant, and equipment, to successfully execute for our customers and country.”

Financial Guidance

We are providing our initial 2025 first quarter and full year 2025 financial guidance range, which includes our assumptions, including as related to: current forecasted business mix, employee sourcing, hiring and retention; manufacturing, production and supply chain disruptions; parts shortages and related continued significant cost and price increases in each of these areas, that are impacting the industry and Kratos. Additionally, a U.S. Government budget was not passed by October 1, 2024, the beginning of Federal Fiscal Year 2025, and as a result, Kratos and others in our industry are operating under a Continuing Resolution Authorization (CRA), which currently expires March 14, 2025, under which no new contracts and no increases in existing contracts production or funding, among other stipulations, is permitted. If the current CRA is not resolved by March 14, 2025, the industry and Kratos will have operated under CRAs, without a DoD Budget, for approximately 12 of the previous 18 months. Kratos has a number of new and existing programs and contracts which are directly being impacted by the current CRA. Kratos’ 2025 financial forecast and guidance provided today assumes that the current CRA will be resolved by March 14, 2025, and that a U.S. Federal and DoD budget which includes no unexpected funding cuts impacting our business occurs. If the current CRA goes substantially beyond the existing March 14, 2025 date, or if there are significant reductions or changes to programs, contracts or initiatives that Kratos is or expects to be involved with, we will evaluate Kratos’ 2025 and future financial forecasts at that time, based on the existing facts, circumstances and expectations and make any adjustments required.

Kratos’ 2025 financial forecast and guidance includes elevated investments for capital expenditures for property, plant and equipment, including the expansion of our manufacturing and production facilities and related inventory builds in our Rocket Systems and Hypersonic businesses, primarily related to the recent MACH-TB 2.0 contract award, the continued manufacture of two production lots of Valkyries prior to contract award, to meet anticipated customer orders and requirements, the expansion and build-out of the Company’s Microwave Products production facilities, the expansion and build-out of our small jet engine production and test cell facilities, and the build-out of additional secure facilities for our federal secured space communications business, in accordance with contract and customer requirements. Kratos’ operating cash flow guidance also assumes certain investments in our rocket systems and unmanned systems businesses.

Management will discuss the Company’s financial results, on a conference call beginning at 2:00 p.m. Pacific (5:00 p.m. Eastern) today. The call will be available at www.kratosdefense.com. Participants may register for the call using this Online Form. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN that can be used to access the call. For those who cannot access the live broadcast, a replay will be available on Kratos’ website.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology, products, system and software company addressing the defense, national security, and commercial markets.  Kratos makes true internally funded research, development, capital and other investments, to rapidly develop, produce and field solutions that address our customers’ mission critical needs and requirements.  At Kratos, affordability is a technology, and we seek to utilize proven, leading edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos’ approach designed to reduce cost, schedule and risk, enabling us to be first to market with cost effective solutions.  We believe that Kratos is known as an innovative disruptive change agent in the industry, a company that is an expert in designing products and systems up front for successful rapid, large quantity, low cost future manufacturing which is a value add competitive differentiator for our large traditional prime system integrator partners and also to our government and commercial customers.  Kratos intends to pursue program and contract opportunities as the prime or lead contractor when we believe that our probability of win (PWin) is high and any investment required by Kratos is within our capital resource comfort level. We intend to partner and team with a large, traditional system integrator when our assessment of PWin is greater or required investment is beyond Kratos’ comfort level. Kratos’ primary business areas include virtualized ground systems for satellites and space vehicles including software for command & control (C2) and telemetry, tracking and control (TT&C), jet powered unmanned aerial drone systems, hypersonic vehicles and rocket systems, propulsion systems for drones, missiles, loitering munitions, supersonic systems, space craft and launch systems, C5ISR and microwave electronic products for missile, radar, missile defense, space, satellite, counter UAS, directed energy, communication and other systems, and virtual & augmented reality training systems for the warfighter.  For more information, visit www.KratosDefense.com

Notice Regarding Forward–Looking Statements
This news release contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, express or implied statements concerning the Company’s expectations regarding its future financial performance, including the Company’s expectations for its first quarter and full year 2025 revenues, 2026 revenue growth rates and expected contributors to 2026 projected revenue growth, organic revenue growth rates, R&D, operating income (loss), depreciation, amortization, stock based compensation expense, and Adjusted EBITDA, and full year 2025 operating cash flow, capital expenditures and other investments, and free cash flow, the Company’s future growth trajectory and ability to achieve improved revenue mix and profit in certain of its business segments and the expected timing of such improved revenue mix and profit, including the Company’s ability to achieve sustained year over year increasing revenues, profitability and cash flow, the Company’s expectation of ramp on projects and that investments in its business, including Company funded R&D expenses and ongoing development efforts, will result in an increase in the Company’s market share and total addressable market and position the Company for significant future organic growth, profitability, cash flow and an increase in shareholder value, the Company’s bid and proposal pipeline and backlog, including the Company’s ability to timely execute on its backlog, demand for its products and services, including the Company’s alignment with today’s National Security requirements and the positioning of its C5ISR and other businesses, planned 2025 investments, including in the tactical drone and satellite areas, and the related potential for additional growth in 2025 and beyond, ability to successfully compete and expected new customer awards, including the magnitude and timing of funding and the future opportunity associated with such awards, including in the target and tactical drone and satellite communication areas, performance of key contracts and programs, including the timing of production and demonstration related to certain of the Company’s contracts and control (TT&C) product offerings, the impact of the Company’s restructuring efforts and cost reduction measures, including its ability to improve profitability and cash flow in certain business units as a result of these actions and to achieve financial leverage on fixed administrative costs, the ability of the Company’s advanced purchases of inventory to mitigate supply chain disruptions and the timing of converting these investments to cash through the sales process, benefits to be realized from the Company’s net operating loss carry forwards, the availability and timing of government funding for the Company’s offerings, including the strength of the future funding environment, the short-term delays that may occur as a result of Continuing Resolutions or delays in U.S. Department of Defense (DoD) budget approvals, timing of LRIP and full rate production related to the Company’s unmanned aerial target system offerings, as well as the level of recurring revenues expected to be generated by these programs once they achieve full rate production, market and industry developments, and any unforeseen risks associated with any public health crisis, supply chain disruptions, availability of an experienced skilled workforce, inflation and increased costs, risks related to potential cybersecurity events or disruptions of our information technology systems, and delays in our financial projections, industry, business and operations, including projected growth. Such statements are only predictions, and the Company’s actual results may differ materially from the results expressed or implied by these statements. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Factors that may cause the Company’s results to differ include, but are not limited to: risks to our business and financial results related to the reductions and other spending constraints imposed on the U.S. Government and our other customers, including as a result of sequestration and extended continuing resolutions, the Federal budget deficit and Federal government shut-downs; risks of adverse regulatory action or litigation; risks associated with debt leverage; risks that our cost-cutting initiatives will not provide the anticipated benefits; risks that changes, cutbacks or delays in spending by the DoD may occur, which could cause delays or cancellations of key government contracts; risks of delays to or the cancellation of our projects as a result of protest actions submitted by our competitors; risks that changes may occur in Federal government (or other applicable) procurement laws, regulations, policies and budgets; risks of the availability of government funding for the Company’s products and services due to performance, cost growth, or other factors, changes in government and customer priorities and requirements (including cost-cutting initiatives, the potential deferral of awards, terminations or reduction of expenditures to respond to the priorities of Congress and the Administration, or budgetary cuts resulting from Congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011, as amended); risks that the unmanned aerial systems and unmanned ground sensor markets do not experience significant growth; risks that products we have developed or will develop will become programs of record; risks that we cannot expand our customer base or that our products do not achieve broad acceptance which could impact our ability to achieve our anticipated level of growth; risks of increases in the Federal government initiatives related to in-sourcing; risks related to security breaches, including cyber security attacks and threats or other significant disruptions of our information systems, facilities and infrastructures; risks related to our compliance with applicable contracting and procurement laws, regulations and standards; risks related to the new DoD Cybersecurity Maturity Model Certification; risks relating to the ongoing conflict in Ukraine and the Israeli-Palestinian military conflict; risks to our business in Israel; risks related to contract performance; risks related to failure of our products or services; risks associated with our subcontractors’ or suppliers’ failure to perform their contractual obligations, including the appearance of counterfeit or corrupt parts in our products; changes in the competitive environment (including as a result of bid protests); failure to successfully integrate acquired operations and compete in the marketplace, which could reduce revenues and profit margins; risks that potential future goodwill impairments will adversely affect our operating results; risks that anticipated tax benefits will not be realized in accordance with our expectations; risks that a change in ownership of our stock could cause further limitation to the future utilization of our net operating losses; risks that we may be required to record valuation allowances on our net operating losses which could adversely impact our profitability and financial condition; risks that the current economic environment will adversely impact our business, including with respect to our ability to recruit and retain sufficient numbers of qualified personnel to execute on our programs and contracts, as well as expected contract awards and risks related to increasing interest rates and risks related to the interest rate swap contract to hedge Term SOFR associated with the Company’s Term Loan A; currently unforeseen risks associated with any public health crisis, and risks related to natural disasters or severe weather. These and other risk factors are more fully discussed in the Company’s Annual Report on Form 10-K for the period ended December 29, 2024, and in our other filings made with the Securities and Exchange Commission.

Note Regarding Use of Non-GAAP Financial Measures and Other Performance Metrics
This news release contains non-GAAP financial measures, including organic revenue growth rates, Adjusted EPS (computed using income from continuing operations before income taxes, excluding income (loss) from discontinued operations, excluding income (loss) attributable to non-controlling interest, excluding depreciation, amortization of intangible assets, amortization of capitalized contract and development costs, stock-based compensation expense, acquisition and restructuring related items and other, which includes, but is not limited to, legal related items, non-recoverable rates and costs, and foreign transaction gains and losses, less the estimated impact to income taxes) and Adjusted EBITDA (which includes net income (loss) attributable to noncontrolling interest and excludes, among other things, losses and gains from discontinued operations, acquisition and restructuring related items, stock compensation expense, foreign transaction gains and losses, and the associated margin rates). Additional non-GAAP financial measures include Free Cash Flow from Operations computed as Cash Flow from Operations less Capital Expenditures plus proceeds from sale of assets and Adjusted EBITDA related to our KUS and KGS businesses. Kratos believes this information is useful to investors because it provides a basis for measuring the Company’s available capital resources, the actual and forecasted operating performance of the Company’s business and the Company’s cash flow, excluding non-recurring items and non-cash items that would normally be included in the most directly comparable measures calculated and presented in accordance with GAAP. The Company’s management uses these non-GAAP financial measures, along with the most directly comparable GAAP financial measures, in evaluating the Company’s actual and forecasted operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and investors should carefully evaluate the Company’s financial results calculated in accordance with GAAP and reconciliations to those financial results. In addition, non-GAAP financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. As appropriate, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the Company’s financial results prepared in accordance with GAAP are included in this news release.

Another Performance Metric the Company believes is a key performance indicator in our industry is our Book to Bill Ratio as it provides investors with a measure of the amount of bookings or contract awards as compared to the amount of revenues that have been recorded during the period and provides an indicator of how much of the Company’s backlog is being burned or utilized in a certain period. The Book to Bill Ratio is computed as the number of bookings or contract awards in the period divided by the revenues recorded for the same period. The Company believes that the rolling or last twelve months’ Book to Bill Ratio is meaningful since the timing of quarter-to-quarter bookings can vary.

Press Contact:
Claire Burghoff
claire.burghoff@kratosdefense.com 

Investor Information:
877-934-4687
investor@kratosdefense.com

View Full Release Here.

Key Points: – Treasury yields declined slightly as investors analyzed economic data and Trump’s proposed tariffs. – Jobless claims came in higher than expected, signaling a potential softening in the labor market. – Fed officials emphasized the need for further inflation progress before considering rate cuts.

U.S. Treasury yields edged lower on Thursday as investors assessed fresh economic data and the potential impact of U.S. President Donald Trump’s proposed tariffs. The 10-year Treasury yield declined more than 2 basis points to 4.507%, while the 2-year Treasury yield dropped 2.3 basis points to 4.253%. Yields move inversely to bond prices, meaning demand for Treasuries increased slightly as investors sought stability amid economic uncertainty.

One of the key economic reports influencing the bond market was the latest weekly initial jobless claims data, which showed 219,000 new claims for unemployment benefits in the week ending Feb. 15. This was slightly above the 215,000 claims economists had expected, signaling a modest cooling in the labor market. Investors also awaited the release of the Philadelphia Fed Manufacturing Index, an important measure of regional economic activity that could provide further insight into the strength of the U.S. economy.

At the same time, Federal Reserve officials were scheduled to speak throughout the day, offering additional perspectives on monetary policy. Among them, Fed Bank of Chicago President Austan Goolsbee and Fed Governor Adriana Kugler were expected to discuss economic conditions and the outlook for inflation. The market remained focused on any indications of future interest rate changes, particularly given the Federal Reserve’s cautious stance on inflation.

Another factor weighing on investor sentiment was Trump’s latest tariff proposal, which called for a 25% duty on key imports, including automobiles, pharmaceuticals, and semiconductors. The former president stated that these tariffs could increase significantly over time and potentially take effect as early as April 2. Investors closely monitored these developments, as trade policies can have broad economic implications, affecting corporate profitability, inflationary pressures, and overall market stability.

Meanwhile, the Federal Reserve’s recently released meeting minutes suggested that policymakers remain concerned about inflation risks. Officials emphasized that they would need to see sustained progress on inflation before considering additional interest rate cuts. They also noted that potential shifts in trade and immigration policies could create further economic uncertainty.

Bond markets reacted cautiously to these developments, with Treasury yields experiencing a slight decline as investors weighed the implications for future monetary policy. Lower yields often indicate increased investor demand for safe-haven assets, particularly when concerns about economic growth or inflation emerge.

As the economic landscape continues to evolve, market participants will closely watch upcoming data releases and Federal Reserve commentary for further indications of policy direction. The trajectory of interest rates remains a key focus, with investors balancing optimism about economic resilience against concerns over inflation and potential trade disruptions.