Analyst Says Drone Co. Is Positioned for Continued Growth
Research Report

1. Unusual Machines Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. 
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Unusual Machines Inc. 
3.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.

Disclosures for Think Equity, Unusual Machines Inc., December 9, 2024

Analyst Certification The analyst, Ashok Kumar, responsible for the preparation of this research report attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers; and (2) that no part of the research analyst’s compensation was, is, or will be directly related to the specific recommendations or views in this research report. Financial Interests The analyst, Ashok Kumar, has no financial interest in the debt or equity securities of the subject company of this report. Further, no member of his household has any financial interest in the securities of the subject company. Neither the analyst, nor any member of his household, is an officer, director, or advisory board member of the issuer(s) or has another significant affiliation with the issuer(s) that is the subject of this research report. The analyst has not received compensation from the subject company. The CEO of ThinkEquity, LLC., owns shares in the company. At the time of this research report, the analyst does not know, or have reason to know, of any other material conflict of interest. Company Specific Disclosures ThinkEquity, LLC is a member of FINRA and SIPC. ThinkEquity, LLC or an affiliate has a client relationship with and has received compensation from this subject company Unusual Machines, Inc. in the last 12 months.

ThinkEquity, LLC ThinkEquity, LLC is a member of FINRA and SIPC. ThinkEquity expects to receive or intends to seek investment banking business from the subject company in the next three months. ThinkEquity does not make a market in the securities of the subject company of this report at the time of publication. ThinkEquity does not hold a beneficial ownership of more than 1% or more of any class of common equity securities of the subject company. This report is for information purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any security. While the information contained in this report has been obtained from sources believed to be reliable, we have not independently verified the information and we do not represent or guarantee that the report is accurate or complete and it should not be relied upon as such. Any references or citations to, or excerpts from, third-party information or data sources (including, but not limited to, Bloomberg and Capital IQ) do not and are not intended to provide financial or investment advice and are not to be relied upon by anyone as providing financial or investment advice. Based on public information available to us, prices and opinions expressed in this report reflect judgments as of the date hereof and are subject to change without notice. The securities covered by or mentioned in this report involve substantial risk and should generally be purchased only by investors able to accept such risk. This research report and the securities mentioned herein, some of which may not be registered under the Securities Act of 1933, are intended only for Qualified Institutional Buyers (QIBs), as defined under Rule 144A. Any opinions expressed assume that this type of investment is suitable for the investor. Ratings Definitions ThinkEquity rating definitions are expressed as the total return relative to the expected performance of S&P 500 over a 12-month period. BUY (B) - Total return expected to exceed S&P 500 by at least 10% HOLD (H) - Total return expected to be in-line with S&P 500 SELL (S) - Total return expected to underperform S&P 500 by at least 10% Current Ratings Distribution This Equity Ratings Distribution reflects the percentage distribution for rated equity securities for the twelve month period June 30, 2019 through June 30, 2020. Within the twelve month period ended June 30, 2020, ThinkEquity, LLC has provided investment banking services to 54% of companies with equity rated a Buy, 0% of companies with equity rated a Hold and 0% of companies with equity rated a Sell. As of June 30, 2020, ThinkEquity, LLC had twentythree stocks under coverage: Buy 23 (100%), Hold 0 (0%), Sell 0 (0%).

In a December 9, 2024 research note, ThinkEquity analyst Dr. Ashok Kumar maintained a Buy rating onUnusual Machines Inc. (UMAC:NYSEAMERICAN) while raising the price target to US$10.00 from US$4.00. He cited the company's strategic evolution in defense-focused drone manufacturing and successful capital restructuring initiatives.

Unusual Machines recently announced the appointment of Donald Trump Jr. to its advisory board. 

Kumar wrote, "Trump Jr., a prominent business leader and investor, brings a wealth of experience and a high public profile to the company. While some investors have expressed concerns about potential controversy surrounding this appointment, others believe it could increase the company's visibility and open doors to new opportunities."

For Q3 2024, the company reported significant progress. According to the report, "Unusual Machines generated US$1.53 million in revenue in Q3 2024, representing a 9% quarter-over-quarter increase . . .  Gross margin for the quarter was 26%."

On operational performance, Kumar stated that "Despite strong revenue growth, the company reported a Q3 operating loss of US$1.4 million and a net loss of US$2.1 million, or US$0.30 per share." The report noted that the results did involve non-recurring expenses, which "were related to IPO costs, stock compensation, and professional fees associated with debt conversion and accounting adjustments.

Kumar also showed optimism for Unusual Machine's defense sector initiatives, writing that UMAC's U.S.-made Brave 7 flight controller had received approval from the Defense Innovation Unit of the U.S. Department of Defense.

Regarding capital structure, "Unusual Machines ended Q3 2024 with US$1.7 million in cash. The company raised an additional US$1.733 million in net proceeds from a private placement in October. Management emphasizes its focus on managing cash flow and maintaining a healthy cash position."

Kumar pointed out several key risks, including the competitiveness of the drone space, which is filled with major players like DJI and Parrot. The analyst wrote, "A significant portion of Unusual Machines' future revenue is dependent on securing contracts with the U.S. DoD and other government agencies."

However, Kumar ended the report by saying, "The company anticipates a strong Q4 2024, driven by holiday retail sales and enterprise component shipments. With a bolstered cash position and new products in the pipeline, the company is positioned for continued growth. Through onshoring, product innovation, and strategic partnerships, the company aims to solidify its leadership in the drone and components market." 

The share price at the time of the report of US$8.71 is a 14.8% increase to ThinkEquity's US$10.00 target price.