In a report released yesterday, Noel Atkinson from Clarus reiterated a Buy rating on Data Commun Management, with a price target of C$3.00.
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Noel Atkinson has given his Buy rating due to a combination of factors including Data Commun Management’s financial performance and future prospects. Despite a challenging macroeconomic environment, the company reported a revenue of $105.4 million for Q3, which exceeded expectations and marked the best year-over-year performance in the last six quarters. Although gross margins were lower than forecasted due to product mix and capacity utilization issues, this was balanced by controlled SG&A expenses, resulting in an adjusted EBITDA that met projections.
Noel Atkinson also notes the company’s efforts in reducing net debt, which now stands at $80.6 million, and its ability to generate free cash flow of $8.7 million in Q3. Looking ahead, while Q4 is expected to remain challenging due to ongoing labor issues and trade uncertainties, there is potential for stabilization in North American trade policy and government spending that could benefit the company in 2026. Additionally, the nearly 8% dividend yield is seen as providing support to the share price, reinforcing the Buy rating with a price target of $3.00.
DCM’s price has also changed moderately for the past six months – from C$1.950 to C$1.370, which is a -29.74% drop .