Undervalued Growth Potential Backed by Strong Royalties and Margin Upside: Maintaining Buy Rating on Re-Rating Expectations

Noel Atkinson, an analyst from Clarus, reiterated the Buy rating on Enwave Corp. The associated price target remains the same with C$0.80.

Noel Atkinson has given his Buy rating due to a combination of factors including a notably strong royalty performance in FQ1, where royalty income rose meaningfully year over year and surpassed his expectations, helping overall revenue closely match forecasts despite softer large-system sales. Margin performance was also materially better than projected, supported by a favourable mix and efficiency gains from speculative systems under construction, leading to an adjusted EBITDA loss that was smaller than his prior estimate.

In addition, Atkinson raised his forward-looking adjusted EBITDA forecast for FY26, reflecting both the solid start to the year and improved margin assumptions, while management remains focused on disciplined cost control and a growing pipeline of large-scale machine orders and royalties. Using a sum-of-the-parts approach that implies a multiple of roughly four times anticipated FY27 revenue, he believes the shares are undervalued relative to the company’s growth prospects and expects a valuation re-rating as equipment sales and recurring royalty streams expand.