First Berlin Equity Research has published a research update on urban-gro, Inc. (ISIN: US91704K2024). Analyst Ellis Acklin reiterated his BUY rating and decreased the price target from USD 7.00 to USD 6.40.

Abstract
Second quarter reporting featured a solid sequential uptick in sales and earnings. The Q2 AEBITDA loss narrowed to $-2.0m vs $-3.4m in the January-to-March period, thanks largely to overhead cost reductions. An uptick in cash and liquid assets to $8.6m (Q1: $7.3m) should also cheer investors concerned that the company might have to tap the markets to replenish cash. Management reiterated on the earnings call that UGRO is on a solid financial footing. However, the order backlog was revised downwards from $105m in Q1 to $79m after a cannabis project had to be idled when the client ran into financing issues. Despite this setback, we think the company has found a path out of the loss-making woods, and we remain Buy-rated on urban-gro. Updated 2023 FBe and a recalibrated DCF now point to a $6.4 TP (old: $7).