Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 24 Sep, 24 | ET | Speculative Buy | CAD 12.0 | CAD 13.32 | CAD 14.119 | 104 days | 17.7% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Evertz Technologies Limited engages in the design, manufacture, and distribution of video and audio infrastructure solutions for the production, post-production, broadcast, and telecommunications markets in Canada, the United States, and internationally. The company offers contribution and distribution encoder, decoder, receiver, and processing products; and control panels, intelligent operations and controls, big data analytics, and network management systems, as well as orchestration, monitoring, and analytics solutions. It also provides video encoders, decoders, and multiplexing products comprising encoders/transcoders, decoders, multiplexers, monitoring and auto-changeover products, and enterprise products; optical media transport products; and audio consoles and processing products, such as mixing consoles, routing and I/O products, summing and processing products, and IP audio gateways. In addition, the company offers asset management and playout products, consisting of asset management, ingest, playout and branding, and transcoding/conforming products; live media production products; routers; flexible media edge products; and IP audio/video processing, media gateway, switch routing, timing, and software defined network orchestration products. Further, it provides multiviewers solutions comprising IP and SDI multiviewers, MVP, and accessories; Radio Frequency (RF) products; timing and synchronization products; and infrastructure and conversion products. The company serves content creators, broadcasters, specialty channels, and television service providers. Evertz Technologies Limited was founded in 1966 and is headquartered in Burlington, Canada.
Higher Cash and cash equivalents
CAD 91.0 mn on July 31, 2024 vs CAD 86.3 mn on April 30, 2024
Higher Finance Income
CAD 0.7 mn in Q1 2025 vs CAD 0.1 mn in Q1 2024
Lower Gross Margin
CAD 66.6 mn in Q1 2025 vs CAD 72.0 mn in Q1 2024
Lower Net Earnings
CAD 9.7 mn in Q1 2025 vs CAD 15.8 mn in Q1 2024
Technology risks, Dependence on Key Distributors & Suppliers, Price Variation, Interest Rates Fluctuations, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 12.0 | 10.2 | 13.32 | 14.119 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Healthy reoccurring revenue: The company's reoccurring software, services and other software revenue stood higher at CAD 55.9 million in Q1 2025, an increase of CAD 11.5 million or 26% from prior year.
Expanding Internet Protocol Television (“IPTV”) market: The Company has maintained its track record of rapid innovation; is a leader in the expanding Internet Protocol Television (“IPTV”) market and a leader in Software Defined Video Network (“SDVN”) technology. The Company is committed to maintaining its leadership position. As it is focused on research and development to ensure that its products are at the forefront of the industry.
An income play: Recently, the company declared a dividend of CAD 0.195 per share, payable on September 25, 2024 to shareholders. Moreover, at the last closing price of CAD 11.85 as on 23 September 2024, the stock offered a healthy dividend yield of 6.64%, which looks decent considering the current macros and interest rates.
Considering the expected valuation upside, decent growth in reoccurring software, services and other software revenue, decent liquidity, healthy dividend yield, shipments and backlog, current trading levels and key business risks a ‘Speculative Buy’ recommendation has been given on the stock at the last closing price of CAD 12.00, as on September 24, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Communication Equipment
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| ET Evertz Technologies Limited |
0.23 2.24% | 10.52 | 17.49 | 13.93 | 1.99 | 3.73 | 1.90 | 9.58 |
| TSAT Telesat Corp |
0.32 1.19% | 27.15 | 8.07 | - | 1.22 | 0.30 | 2.78 | 3.07 |
| VCM Vecima Networks Inc. |
0.91 9.48% | 10.51 | 23.61 | 15.77 | 1.58 | 1.93 | 1.79 | 10.46 |
| QTRH Quarterhill Inc |
-0.03 2.04% | 1.44 | - | 78.74 | 1.20 | 0.96 | 1.09 | 4.04 |
| BYL Baylin Technologies Inc |
- -% | 0.28 | - | 63.29 | 0.77 | 50.70 | 1.27 | 351.41 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from a high-risk perspective and recommendations are provided for a medium to long-term duration. Recommendations provided in this report are based on the fundamental performance of the stock in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
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