Covalon Technologies Ltd (TSE:COV)
:COV
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Covalon Technologies
(COV)
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Rating:62Neutral
Price Target:
C$2.00
▲(14.29% Upside)
Action:ReiteratedDate:02/27/26
The score is primarily supported by improved profitability versus 2022–2023 and strong TTM cash generation alongside low leverage. It is held back by the recent TTM margin and revenue step-down and a high P/E (~51), while technicals are mixed (shorter-term strength but still below the 200-day trend with slightly negative MACD).
Positive Factors
Strong trailing cash generation
Sustained positive TTM operating and free cash flow provides durable internal funding for R&D, working capital and distribution expansion. Strong FCF relative to earnings supports reinvestment and resilience versus one-time shocks, improving long-term self‑funding capacity.
Negative Factors
TTM revenue decline and margin compression
A declining run-rate and compressed operating margins reduce durable profitability and limit reinvestment capacity. If the TTM step-down persists, it raises execution risk for sustaining product adoption and could force either cost cuts that impair growth or higher investment that pressures cash flow.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong trailing cash generation
Sustained positive TTM operating and free cash flow provides durable internal funding for R&D, working capital and distribution expansion. Strong FCF relative to earnings supports reinvestment and resilience versus one-time shocks, improving long-term self‑funding capacity.
Read all positive factors
Covalon Technologies (COV) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$49.71M
Dividend YieldN/A
Average Volume (3M)17.17K
Price to Earnings (P/E)95.7
Beta (1Y)0.19
Revenue Growth5.29%
EPS Growth-29.02%
CountryCA
Employees105
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)0.00
Shares Outstanding27,618,076
10 Day Avg. Volume12,083
30 Day Avg. Volume17,167
Financial Highlights & Ratios
PEG Ratio-0.88
Price to Book (P/B)1.87
Price to Sales (P/S)1.75
P/FCF Ratio34.99
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.12
Revenue Forecast (FY)C$38.40M
Covalon Technologies Business Overview & Revenue Model
Company Description
Covalon Technologies Ltd. researches, develops, manufactures, commercializes, and licenses medical technologies and products in the United States, Canada, Europe, the Middle East, Asia, Latin America, and internationally. The company has 3 proprie...
How the Company Makes Money
Covalon makes money primarily by selling its medical consumable products to healthcare providers and through distribution partners. Its revenue model is largely product-based and recurring in nature because many of its items (e.g., dressings, anti...
Covalon Technologies Earnings Call Summary
Earnings Call Date:Aug 21, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jun 01, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong sequential revenue growth, successful international expansion, and a robust cash position, indicating positive forward momentum. However, year-over-year revenue decline and decreased adjusted EBITDA present concerns, although these may be offset by promising innovations and clinical study results.Positive Updates
Sequential Revenue Growth
Revenue at $8.4 million was up more than 10% sequentially between Q3 and Q2, led by more than 40% sequential quarterly growth in the U.S. advanced wound care sales channel.
Negative Updates
Decline in Year-Over-Year Revenue
Q3 revenue came in 9% below last year's Q3, which was their highest revenue quarter of 2024.
Read all updates
Q3-2025 Updates
Positive
Negative
Sequential Revenue Growth
Revenue at $8.4 million was up more than 10% sequentially between Q3 and Q2, led by more than 40% sequential quarterly growth in the U.S. advanced wound care sales channel.
Read all positive updates
Company Guidance
During Covalon's Q3 Fiscal 2025 conference call, CEO Brent Ashton provided optimistic guidance, emphasizing key financial and operational metrics. The company reported $8.4 million in revenue for Q3, marking a sequential increase of over 10% from Q2, driven by more than 40% growth in its U.S. advanced wound care sales. Despite a year-over-year revenue decline of 9% for Q3, the company achieved an adjusted EBITDA of nearly $1 million, reflecting a 50% increase from the previous quarter. Ashton highlighted a robust 13% growth in trailing 12-month revenue and a 27% compounded annual growth rate over three years, illustrating Covalon's market success. Additionally, the company maintained a strong cash position of over $18 million, up almost $9 million from the previous year. Operationally, Covalon achieved 100% retention of its top 50 U.S. hospital customers and added 15 new hospital accounts in Q3, with a total of 65 new accounts for the year. Ashton also shared promising updates on the company's innovation pipeline and international market expansion, including new product registrations and distribution agreements.Covalon Technologies Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Sep 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 31.54M | 32.82M | 31.17M | 26.60M | 18.15M | 19.56M |
| Gross Profit | 16.28M | 17.47M | 18.93M | 14.36M | 7.49M | 9.70M |
| EBITDA | 1.44M | 3.01M | 3.14M | -3.56M | -8.11M | 1.54M |
| Net Income | 977.42K | 2.06M | 2.67M | -4.46M | -9.66M | 23.48M |
Balance Sheet | ||||||
| Total Assets | 32.80M | 36.12M | 31.81M | 24.90M | 30.38M | 40.58M |
| Cash, Cash Equivalents and Short-Term Investments | 17.88M | 17.37M | 16.75M | 8.79M | 14.06M | 22.95M |
| Total Debt | 2.07M | 2.25M | 901.67K | 1.56M | 2.17M | 2.59M |
| Total Liabilities | 6.41M | 5.40M | 4.30M | 6.11M | 6.15M | 7.21M |
| Stockholders Equity | 26.39M | 30.73M | 27.50M | 18.79M | 24.23M | 33.37M |
Cash Flow | ||||||
| Free Cash Flow | 6.68M | 1.65M | 3.06M | -4.50M | -9.08M | 443.71K |
| Operating Cash Flow | 7.92M | 2.29M | 3.47M | -3.18M | -7.99M | 621.37K |
| Investing Cash Flow | -1.37M | -847.02K | -281.63K | -81.02K | -843.02K | -278.53K |
| Financing Cash Flow | -4.74M | -529.35K | 4.97M | -2.16M | -2.19M | -8.25M |
Covalon Technologies Technical Analysis
Positive
1.75
Price Trends
1.72
Positive
1.78
Positive
1.99
Negative
Market Momentum
0.01
Negative
53.94
Neutral
82.35
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:COV, the sentiment is Positive. The current price of 1.75 is below the 20-day moving average (MA) of 1.77, above the 50-day MA of 1.72, and below the 200-day MA of 1.99, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 53.94 is Neutral, neither overbought nor oversold. The STOCH value of 82.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:COV.
Covalon Technologies Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | C$49.71M | 95.68 | 3.31% | ― | 5.29% | -29.02% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
47 Neutral | C$53.90M | -5.76 | ― | ― | ― | 54.38% | |
45 Neutral | C$32.13M | -6.55 | ― | ― | ― | 72.92% | |
42 Neutral | C$43.30M | -4.40 | -103.51% | ― | ― | 54.74% | |
42 Neutral | C$45.61M | -17.16 | ― | ― | -41.70% | -35.42% |
* Healthcare Sector Average
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Covalon Technologies Corporate Events
Business Operations and StrategyRegulatory Filings and ComplianceShareholder Meetings
Covalon Sets Virtual-Only Annual Shareholder Meeting for March 25, 2026
Neutral
Mar 18, 2026
Covalon Technologies plans to hold its annual meeting of shareholders on March 25, 2026, at 2:00 p.m. Eastern Time in a virtual-only format accessible via live webcast. The event will feature a presentation by CEO Brent Ashton followed by a questi...
Business Operations and StrategyShareholder Meetings
Covalon Sets Virtual-Only Annual Shareholder Meeting for March 25, 2026
Neutral
Mar 18, 2026
Covalon Technologies will hold its annual shareholder meeting on March 25, 2026, at 2:00 p.m. Eastern Time in a virtual-only format, allowing shareholders to attend and vote online via live webcast. The event will feature a presentation from CEO B...
Business Operations and StrategyFinancial Disclosures
Covalon Posts Near Break-Even Q1 as Clinical Wins and U.S. Contracts Bolster 2026 Outlook
Positive
Feb 25, 2026
Covalon reported essentially break-even results for its fiscal 2026 first quarter, as revenue declined to $6.9 million from $8.1 million a year earlier and net income fell to $0.1 million, reflecting variability in order timing but supported by a ...
Business Operations and Strategy
Covalon Partners with AVA and Dr. Nancy Moureau on IV Infection Prevention Webinar
Positive
Feb 19, 2026
Covalon Technologies is partnering with the Association for Vascular Access and noted vascular access expert Dr. Nancy Moureau on a continuing education webinar addressing IV line contamination and its role in catheter-associated bloodstream infec...
Financial Disclosures
Covalon Sets February 25 Call to Review Q1 Fiscal 2026 Results
Neutral
Feb 19, 2026
Covalon Technologies said it will release its first-quarter fiscal 2026 results before markets open on February 25, 2026, and will host a conference call and webcast at 8:30 a.m. ET the same day to discuss the financial performance. The company wi...
Financial Disclosures
Covalon Sets Date and Call for Q1 Fiscal 2026 Results
Neutral
Feb 19, 2026
Covalon Technologies plans to release its first-quarter fiscal 2026 results on February 25, 2026, before the market opens and will host a conference call and webcast the same morning to discuss the figures and take questions from participants. The...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.