Roth MKM analyst Scott W. Searle upgraded Inseego Corp. (NASDAQ:INSG) from Neutral to Buy, raising the price forecast from $13 to $15.

Searle highlights the company's successful balance sheet recapitalization and reducing net debt. The analyst also notes strong growth in core products, up 25%, and emphasizes the experienced management team.

Looking ahead, Searle sees new products, evolving sales channels, and potential acquisitions to boost the company's outlook for 2025 and 2026.

In the third quarter, the company's results and fourth-quarter guidance were affected by the sale of its Telematics business, which is now classified as discontinued. This made comparisons tricky, showing only 5% growth, compared to around 25% organic growth, the analyst writes. The sale of Telematics is expected to reduce annual EBITDA by $8-10 million.

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However, core product growth is strong, with hotspots returning to growth (20% in 2024 and 45% in 2H24).

Searle sees new products and better carrier partnerships to drive continued growth in Mobile Solutions (hotspots) through 2025 and 2026, with projected growth rates of 8% and 20%+ respectively.

The analyst noted that the company is expected to drive continued growth through more focused product development and strategic go-to-market approaches.

Searle adds that with an improved balance sheet, inorganic growth opportunities, such as mergers and acquisitions, are also becoming a more viable option.

For FY24, the analyst projects earnings of 2 cents per share, followed by 38 cents per share in FY25 and 70 cents per share in FY26.

Price Action: INSG shares are trading higher by 11.9% to $12.12 at last check Thursday.

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