A Look at Dragonfly Energy (DFLI) Valuation After New Rail Partnership and Lithium Battery Standard Adoption

Dragonfly Energy Holdings (DFLI) just paired a fresh distribution deal with National Railway Supply and a new AREMA lithium battery standard, together opening a clearer on ramp into North American rail infrastructure spending.

See our latest analysis for Dragonfly Energy Holdings.

The new rail partnership lands after Dragonfly Energy launched its Battle Born Power Station Series and deepened its marine OEM ties with World Cat. Yet the latest $0.8711 share price sits against a year to date share price return of negative 72.86 percent and a three year total shareholder return of negative 99.26 percent, which hints that the recent 90 day share price momentum of 217.34 percent may be more about shifting risk appetite than a fully reset long term outlook.

If this kind of turnaround story has your attention, it could be worth scanning fast growing stocks with high insider ownership to see what other fast moving, high conviction names are emerging on investors radar.

So with revenue still growing but heavy losses and dilution risk hanging over the story, is Dragonfly Energy a beaten down innovator trading below its potential, or are markets already pricing in every bit of future growth?

Most Popular Narrative: 53.5% Undervalued

With Dragonfly Energy Holdings last closing at $0.87 against a narrative fair value of $1.88, the most followed view implies substantial upside if execution delivers.

The analysts have a consensus price target of $1.0 for Dragonfly Energy Holdings based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $142.6 million, earnings will come to $14.5 million, and it would be trading on a PE ratio of 7.3x, assuming you use a discount rate of 12.3%.

Read the complete narrative.

Curious how a loss making battery maker gets a valuation implying profitable scale and a modest earnings multiple, not a hype premium, in just a few years? The full narrative unpacks the revenue ramp, margin shift, and capital structure assumptions that have to line up almost perfectly to justify that fair value projection.

Result: Fair Value of $1.88 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained weakness in RV and trucking demand or delays in commercializing dry electrode technology could easily derail those upbeat profitability expectations.

Find out about the key risks to this Dragonfly Energy Holdings narrative.

Build Your Own Dragonfly Energy Holdings Narrative

If you are skeptical of this outlook or prefer digging into the numbers yourself, you can build a custom view in minutes: Do it your way.

A great starting point for your Dragonfly Energy Holdings research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Before you move on, lock in your next opportunity using the Simply Wall Street Screener so you are not chasing crowded stories after they run.

• Capture potential multi-baggers early by scanning these 3609 penny stocks with strong financials for smaller names with financial strength that the market has not fully appreciated yet.
• Position yourself where innovation meets earnings power through these 30 healthcare AI stocks, targeting companies applying AI to healthcare problems with real-world revenue traction.
• Secure your portfolio’s income engine by focusing on these 12 dividend stocks with yields > 3%, highlighting businesses with yields above 3 percent that still pass fundamental quality checks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com