Ontrak Inc.'s (OTRK:NASDAQ) fourth quarter of 2023 revenue was affected by client loss, but this impact shouldn't last long, reported Roth MKM analyst Dr. Jonathan Aschoff in an April 17 research note.
The report stated that Ontrak currently has US$10.1 million in cash, which includes money from a warrant exercise, debt raise, and estimated cash burn in the first quarter of 2023.
In the fourth quarter of 2023, the company's revenue was US$3.5 million, which was a 5% decrease compared to the previous quarter. For the first quarter of 2024, Ontrak expects revenue to be between US$2.5 million and US$2.9 million. This lower guidance is due to the loss of a client in Q1 2024 that made up 34% of the company's revenue in 2023, Aschoff noted.
However, Aschoff wrote that the company expects revenue to grow in the future due to "the increasing effective outreach pool (currently at 5,094)
and the fact that large new Florida client Community Care Plan received a substantial Medicaid award."
With this, Aschoff reiterated his Buy rating on the stock and gave Ontrak a US$4 target price.
Ascoff said, "We arrive at this valuation by projecting future U.S. revenue from Ontrak's commercial stage platform."
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Disclosures for Roth MKM, Ontrak Inc., April 17, 2024
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures: Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Ontrak, Inc.. ROTH and/or its employees, officers, directors and owners own options, rights or warrants to purchase shares of Ontrak, Inc. stock. Shares of Ontrak, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities. Roth or its affiliates beneficially own(s) 1% or more of an equity security of Ontrak, Inc..
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC
