Freedom Broker cuts MNTN stock price target on weak results

Freedom Broker has reduced its price target for MNTN Inc (OTC:MNTN) stock to $9.00 from $16.50, while keeping the Buy rating intact. The company's shares are currently trading at $4.98, a significant 50% decrease over the last week and 67% drop over the past year. Despite being priced at a Fair Value of $12.80, MNTN appears undervalued according to InvestingPro analysis, making it a potential opportunity among the most undervalued stocks.

MNTN's weak third-quarter 2026 results, with revenue and Adjusted EBITDA falling short of Freedom Broker's estimates, prompted the downgrade. Changes to the sales compensation structure led to the departure of around 40% of experienced sellers, hindering new customer acquisitions. Existing customers, however, continued to spend more. Management lowered its 2026 guidance and anticipates sales disruptions will persist into the fourth quarter of 2026.

The new leadership team has rectified the compensation structure and is rebuilding the sales organization, although new hires require time to acclimate, and increased spending will impact profitability. Freedom Broker has revised its revenue and Adjusted EBITDA projections for 2026 and 2027, accounting for a smaller revenue base and a gradual recovery in customer acquisition.

The company's strong cash position, with more cash than debt on its balance sheet, and a high current ratio of 7.1, indicate robust liquidity. MNTN also holds a financial health score of 3.41 and analysts foresee profitability this year.

Investors can delve deeper into MNTN's prospects through the firm's Pro Research Report, one of 1,400+ available on InvestingPro, which condenses intricate data into straightforward, actionable insights. The firm lowered its price target due to reduced estimates and valuation multiples but retained the Buy rating, considering the substantial upside implied by the current share price.

Recently, MNTN reported third-quarter revenue at $80.3 million, a 15% increase year-over-year, yet the figure fell short of the guidance range of $86 million to $89 million. Adjusted EBITDA was $19.9 million, missing internal targets, and GAAP earnings were $0.10 per share. Management revised fourth-quarter revenue guidance to $75 million to $78 million, suggesting a potential 12% year-over-year decline.

Subsequently, Evercore ISI downgraded MNTN to In Line from Outperform and decreased its price target to $7, while Raymond James set the stock to Market Perform due to sales upheaval and reduced fourth-quarter guidance. Citizens also lowered its rating to Market Perform, citing management changes and sales execution issues, with Tony Weisman named as the new CEO shortly before the earnings call.