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Lake Street's Jaeson Schmidt raised their price target on Virtra (NASDAQ: VTSI) by 23.1% from $13 to $16 on 2024/05/15. The analyst maintained their Strong Buy rating on the stock.

Schmidt's update followed an assessment of Virtra's 2024/05/14-dated Q1 2024 earnings report and participation in the earnings call.

Although "disappointed by the softer results," the analyst argued that the company's story and growth possibilities remain unchanged. 

Schmidt sees the post-earnings selloff as an excellent opportunity to buy Virtra shares because, in the long run, they think the company can grow its sales by double digits.

Earnings Report

For Q1 2024, Virtra reported:

• EPS of $0.11, which missed the consensus estimate of $0.12 and, by 59.3%, Q1 2023’s $0.27.
• Revenue of $8.09M, which missed the consensus estimate of $8.56M and, by 19%, Q1 2023’s $10M.
• EBITDA of $1.9M, down 52.5% Y/Y.

Management did not provide financial guidance in its press release or earnings call.

CEO John Givens commented:  “Q1 2024, while showing a dip in revenue, marked another period of strategic execution as we continue to build on the transformative groundwork laid over the past two years. 

“The anticipated revenue fluctuation was primarily due to the cyclical nature of budget allocations, often skewed towards year-end, coupled with the impact of the U.S. government’s continuing resolution, and the completion of a large portion of our capital backlog in 2023. 

“We remain optimistic that the integration of new sales strategies and team members will begin to influence our financial results as the year progresses, especially as these initiatives mature and the U.S. government budget resolutions advance, catalyzing purchasing decisions.

“Our operational enhancements, including our consolidation into a single state-of-the-art production facility and implementing an upgraded ERP system, have been pivotal in elevating our operational excellence. 

“These improvements have enabled more efficient production, higher quality outputs, and quicker delivery times, thereby enhancing customer satisfaction. 

“Additionally, the Microsoft IVAS contract has propelled our research and development efforts in the military market, advancing our technology and providing insights that aid in deeper market penetration both domestically and abroad. 

“As our strategic initiatives continue to take root throughout 2024, we are well-positioned to capitalize on the opportunities presented by our upcoming technology introductions and growing content library.”