On Wednesday, FlexShopper, Inc. (NASDAQ: FLEX) received a Buy rating and $2.50 price target from H.C. Wainwright. The company's shares surged by 8.7% on Tuesday, outpacing the market index by a significant margin. This increase came after FlexShopper announced legal proceedings against Upbound Group, Inc. and Katapult Holdings, Inc. for allegedly infringing upon its patented lease-to-own technology.
The legal complaint filed by FlexShopper claims that five of its patents related to lease-to-own technology have been violated. The company is seeking injunctive relief, monetary damages, and potential ongoing royalty fees. The choice of legal representation and the venue for the case indicate a strong position for FlexShopper in the litigation process.
While the legal action is not the main focus of H.C. Wainwright's investment thesis, a positive outcome could be a significant catalyst for the company's stock. The endorsement with a $2.50 price target reflects confidence in FlexShopper's future prospects.
FlexShopper's revenue growth has been impressive, with a 23.81% increase over the last twelve months and a 29.46% growth in the most recent quarter. However, the company is not currently profitable, and analysts do not anticipate profitability in the near future. The ongoing litigation could have a substantial impact on FlexShopper's financial performance.
Investors should keep an eye on FlexShopper's stock movement and the outcome of the legal proceedings, as they could affect the company's market position and financial health. For a more detailed analysis, InvestingPro offers additional tips to provide insights into FlexShopper's potential growth opportunities.
Analysis:
FlexShopper, Inc. is taking legal action against competitors for patent infringement, which could lead to a significant financial windfall if successful. The company's stock surged following the announcement, indicating investor confidence in the outcome of the litigation. While FlexShopper's revenue growth is impressive, the company is not currently profitable, making the legal proceedings crucial for its financial future.
Investors should closely monitor FlexShopper's stock performance and the results of the legal action to assess the company's potential for growth and profitability. The outcome of the lawsuits could have a substantial impact on FlexShopper's market position and long-term prospects.