November 7, 2008 – Analyst Notes – Global Hunter’s Justin Cable issued the comments on Akeena Solar (Nasdaq:AKNS), maintaining his NEUTRAL stance and lowering his price target to $2.50 from $5.00 and Altair Nanotechnologies (Nasdaq:ALTI), maintaining his SELL rating and lowing his price target to $1.00 from $1.50. Here are his takeaways:

Akeena

·         Q3 revenues beat by 15%
·         Net loss for quarter larger than expected
·         Gross margin was 12.7% vs. estimated 17%
·         Increase in debt
·         Increase in backlog
·         Installed 1,290kw in quarter versus 854 in prior quarter
·         Higher inventory
·         Guidance maintained by management – 30% to 40% revenue growth for FY08 and EBITDAS breakeven in second half of FY2009

Altair

·         Revenues still minimal
·         Significant losses continue
·         Cash of $33.7 million
·         Yet to see material orders

We think Cable’s assessments on both companies is right on. In fact, we would probably be more conservative, and assume a forward price to sales multiple on AKNS of 1.5x forward sales (which we estimate to be in the middle of management’s guidance at $43.4 million). This would yield an implied market cap of $65.2 million, or a $2.30 stock price. It is tough to offer up AKNS any more aggressive multiples in light of the fact that it continues to hemorrhage cash and is quarters off from profitability.

On the other hand, some other pros are willing to offer up more optimistic analysis. Earlier this week, Kaufman reiterated its BUY recommendation on AKNS, although it did reduce its price target from $12 to $6.

Important Disclosure: SCPEditor does not hold any position in AKNS or ALTI. The information and trades provided here and in the comments are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance.

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