Tate Sullivan’s Buy rating for Cheetah Net Supply Chain Service, Inc. Class A is predicated on a number of promising financial indicators following the company’s acquisition of Edward Transit Express. The acquisition is expected to contribute to revenue growth, with estimates for 2024 and 2025 revenues being adjusted upward. Furthermore, the integration of Edward Transit Express is anticipated to yield cost savings for Cheetah, as the company can now internalize logistics services that were previously outsourced, leading to an improved gross profit margin forecast for the upcoming years.
Additionally, the capital raised through the company’s initial public offering has been utilized to reduce debt and support operations, positioning Cheetah for potential future expansions. Sullivan’s analysis suggests that the improved financial outlook, coupled with the strategic acquisition, will lead to an expansion of Cheetah’s revenue and earnings per share, justifying the Buy rating and the $5.00 price target that significantly exceeds the current trading multiples. The expectation of multiple expansion is rooted in the belief that Cheetah will continue to grow its logistics services and realize an increase in return on equity.
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Cheetah Net Supply Chain Service, Inc. Class A (CTNT) Company Description:
Cheetah Net Supply Chain Service Inc. is a supplier of parallel-import vehicles in the United States to be sold in the People¿s Republic of China (PRC) market. The Company and its wholly owned subsidiaries are primarily engaged in the parallel-import vehicle dealership business. In the PRC, parallel-import vehicles refer to those purchased by dealers directly from overseas markets and imported for sale through channels other than brand manufacturers¿ official distribution systems. The Company purchases automobiles, primarily luxury brands such as Mercedes, BMW, Porsche, Lexus, and Bentley, from the U.S. market and resells them…