Dragonfly Energy (DFLI) Stock Jumps as Battery Maker Crushes Earnings Expectations

TLDR

• Dragonfly Energy reported Q3 earnings per share of ($0.20), beating analyst estimates of ($0.71) by $0.51.
• The stock jumped 4.9% to $0.81 on Friday with trading volume more than double the daily average at 43.7 million shares.
• OEM sales surged 44% year-over-year to $10.7 million, driving overall net sales growth of 25.5% to $16 million.
• The company completed three public offerings raising $90 million and restructured debt to improve financial flexibility.
• Q4 guidance projects net sales of $13 million, representing 7% growth compared to the same period last year.

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Dragonfly Energy shares climbed Friday after the lithium-ion battery maker reported third-quarter results that crushed analyst expectations. The stock closed at $0.81, up 4.9% on heavy volume.

Dragonfly Energy Holdings Corp., DFLI

The company posted a loss of $0.20 per share for the quarter. Wall Street had expected a much steeper loss of $0.71 per share. The $0.51 beat marked a substantial surprise for investors who had braced for worse results.

Revenue came in at $15.97 million. That matched analyst estimates exactly. Trading volume hit 43.7 million shares, more than twice the typical daily average of 19 million.

Dragonfly’s market cap now sits at $68.71 million. The stock has traded between $0.15 and $4.77 over the past 52 weeks.

OEM sales led the charge for the quarter. These sales to manufacturers jumped 44% compared to last year, reaching $10.7 million. RV makers are increasingly installing Dragonfly’s batteries as standard equipment in their vehicles.

Direct-to-consumer sales dipped slightly to $5 million, down 2.2% from the prior year. The company attributed this decline to ongoing economic headwinds affecting retail customers.

Licensing fees provided another bright spot. This revenue stream increased nearly 50% during the quarter.

Margins Show Clear Improvement

Gross profit rose 65% year-over-year to $4.7 million. The company’s gross margin expanded from 22.6% to 29.7%, a gain of 710 basis points.

Higher sales volume and a better product mix drove the margin expansion. Cost-cutting initiatives also contributed to the improved profitability metrics.

Adjusted EBITDA came in at negative $2.1 million. While still a loss, this represented a major improvement from the negative $5.5 million reported in the same quarter last year.

The company’s net loss widened to $11.1 million from $6.8 million a year earlier. Dragonfly attributed the larger loss to investments in scaling operations and research programs.

Operating expenses declined to $8.5 million from $8.9 million in the prior-year period. Lower research and development spending helped trim costs.

Fresh Capital Bolsters Balance Sheet

Dragonfly completed three public stock offerings this year. These transactions brought in approximately $90 million in gross proceeds.

The company also restructured its outstanding debt. These moves reduced the debt burden and increased available cash.

CEO Dr. Denis Phares said the capital raises created a stronger foundation for growth. The improved financial position gives Dragonfly more flexibility to pursue expansion opportunities.

Analysts remain cautiously optimistic about the stock. The consensus rating stands at “Moderate Buy” with a price target of $1.50.

One analyst rates the stock a strong buy. Another gives it a buy rating. A third has assigned a hold rating, while one analyst maintains a sell rating.

For the fourth quarter, Dragonfly expects net sales of roughly $13 million. That would represent 7% growth compared to Q4 of last year. The company forecasts adjusted EBITDA of negative $3.3 million for the period.

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