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Data Commun Management (TSE:DCM)
:DCM
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Data Commun Management
(TSX:DCM)
67Neutral
Data Commun Management (DCM) vs. S&P 500 (SPY)
Market Cap
C$96.24M
Dividend Yield1.43%
Average Volume (3M)66.13K
Price to Earnings (P/E)26.9
Beta (1Y)0.54
Revenue Growth7.20%
EPS GrowthN/A
CountryCA
Employees1,400
SectorIndustrials
Sector Strength66
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.06
Shares Outstanding55,308,952
10 Day Avg. Volume44,923
30 Day Avg. Volume66,131
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.22
Price to Cash Flow (P/CF)9.00
P/FCF Ratio21.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$4.25Price Target Upside144.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Data Commun Management Business Overview & Revenue Model
Company DescriptionData Commun Management (DCM) is a leading enterprise specializing in data communication solutions, primarily serving the telecommunications and information technology sectors. The company offers a wide range of services including network infrastructure development, data management, and cloud-based communication platforms designed to enhance connectivity and optimize data flow for businesses worldwide.
How the Company Makes MoneyDCM generates revenue through a multifaceted approach, primarily capitalizing on subscription-based models for their cloud communication services. They offer customized network solutions and data management services, which are billed on a project or monthly retainer basis, depending on the client’s needs. Additionally, DCM engages in long-term contracts with telecommunications companies for infrastructure development and maintenance. Strategic partnerships with industry leaders and technology providers also play a significant role in boosting their revenue by enabling DCM to expand its market reach and enhance its service offerings.
Data Commun Management Financial Statement Overview
Summary
Data Commun Management shows growth in revenue and operational efficiency. However, challenges in net profitability, high leverage, and declining free cash flow present potential risks. The company demonstrates strength in cash flow generation but needs to address profitability and leverage concerns to improve its financial health.Income Statement
Data Commun Management shows a mixed performance in its income statements. The gross profit margin stands at 26.82% TTM, reflecting reasonable profitability. However, the company has struggled with net profitability, as indicated by a negative net profit margin of -0.71% TTM. The revenue growth rate of 10.26% TTM indicates positive growth momentum. Despite a negative net income, the EBIT margin is 6.05% TTM, suggesting some operational efficiency. Overall, the company demonstrates growth potential but faces challenges with net profitability.62
Positive
Balance Sheet
The balance sheet reveals a relatively high debt-to-equity ratio of 6.32 TTM, indicating significant leverage that could pose financial risk. The equity ratio stands at 10.14% TTM, which is low, reflecting a limited buffer against liabilities. However, the company has improved its equity position over the previous year. Return on Equity is negative at -8.86% TTM, highlighting challenges in generating returns for shareholders. While there are improvements, high leverage remains a concern.55
Neutral
Cash Flow
Cash flow analysis indicates a stable operating cash flow with an operating cash flow to net income ratio of -9.19 TTM, showing that cash generation is not aligned with profitability. The free cash flow to net income ratio is -3.86 TTM. Despite negative net income, the company maintains positive free cash flow, indicating resilience in cash generation. The free cash flow growth rate is -52.67% compared to the previous year, reflecting a decline in free cash availability.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 493.69M | 447.73M | 273.80M | 235.33M | 259.31M | 282.88M | Gross Profit |
| 132.41M | 118.91M | 84.22M | 69.53M | 72.94M | 69.27M | EBIT |
| 29.86M | 31.67M | 26.73M | 18.65M | 24.21M | 1.71M | EBITDA |
| 44.39M | 14.60M | 36.04M | 33.80M | 37.46M | 7.22M | Net Income Common Stockholders |
| -3.49M | -15.85M | 13.97M | 1.56M | 13.30M | -13.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 17.65M | 4.21M | 901.00K | 578.00K | -61.77M | Total Assets |
| 142.23M | 418.75M | 149.48M | 140.08M | 163.92M | 214.37M | Total Debt |
| 66.80M | 257.13M | 66.85M | 75.40M | 96.22M | 144.09M | Net Debt |
| 66.80M | 239.48M | 62.64M | 74.50M | 95.64M | 205.86M | Total Liabilities |
| 134.72M | 389.99M | 126.63M | 132.04M | 153.96M | 215.41M | Stockholders Equity |
| 7.51M | 28.76M | 22.85M | 8.04M | 9.96M | -1.04M |
| Cash Flow | Free Cash Flow | ||||
| 13.47M | 28.45M | 21.13M | 23.72M | 46.80M | -5.72M | Operating Cash Flow |
| 32.05M | 32.80M | 22.68M | 26.95M | 47.63M | -811.00K | Investing Cash Flow |
| -2.95M | -104.49M | -1.48M | -3.22M | -835.00K | -3.94M | Financing Cash Flow |
| -42.53M | 85.17M | -17.93M | -23.41M | -45.12M | 7.66M |
Data Commun Management Technical Analysis
Negative
1.74
Price Trends
1.86
Negative
1.86
Negative
2.19
Negative
Market Momentum
>-0.01
Positive
47.00
Neutral
60.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DCM, the sentiment is Negative. The current price of 1.74 is below the 20-day moving average (MA) of 1.88, below the 50-day MA of 1.86, and below the 200-day MA of 2.19, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 47.00 is Neutral, neither overbought nor oversold. The STOCH value of 60.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DCM.
Data Commun Management Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.58B | 10.75 | 16.00% | 4.16% | -3.59% | 432.46% | |
68 Neutral | C$4.40B | 157.81 | -0.10% | ― | 14.85% | -105.25% | |
67 Neutral | C$96.24M | 26.93 | 10.39% | 1.43% | 7.20% | ― | |
63 Neutral | C$97.55B | 97.41 | 30.90% | 0.12% | 21.56% | 31.90% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% | |
61 Neutral | C$9.87M | 26.80 | 4.63% | ― | -2.75% | -89.95% | |
60 Neutral | $32.40B | 18.78 | 19.01% | 0.21% | 2.83% | 9.02% |
* Industrials Sector Average
Performance Comparison
TSE:DCM
Data Commun Management
1.75
-0.89
-33.71%
TSE:GIB.A
CGI
141.35
-3.07
-2.13%
TSE:OTEX
Open Text
35.01
-13.97
-28.52%
TSE:IQ
Airiq Inc
0.34
-0.09
-20.93%
TSE:KXS
Kinaxis Inc
163.21
16.30
11.10%
TSE:CSU
Constellation Software
4,519.58
975.84
27.54%
Data Commun Management Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -10.31% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in revenue growth, successful integration, and technological advancements, indicating a strong platform for future growth. However, concerns about tariffs, the impact of the Canada Post strike, and lower-than-expected organic growth were noted as challenges.Highlights
Record Levels of Revenue and Growth
In 2024, DCM achieved record levels of revenue, gross profit, and adjusted EBITDA. Revenue increased by 7.2% compared to 2023, reaching $480 million, which is double the revenue from 2021.
Successful Integration and Synergy Capture
The integration of Moore Canada Corp was completed ahead of schedule, reducing facilities from 14 to 10. The company met its $30 million to $35 million synergy target, which is expected to benefit future performance.
Strong Technology Services Growth
Revenue from technology services grew to $20 million in 2024, up from $5.3 million in 2022, and now constitutes 4.2% of total revenue. This includes SaaS and AI-enabled offerings.
Improved Gross Profit and Margin
Gross profit grew by 9.4% to $130 million, with gross margins improving as facility consolidations were completed. The company aims to achieve gross margins above 30%.
Strong Productivity and Employee Efficiency
Revenue per employee grew to $337,000 in 2024, reflecting significant productivity improvements and headcount reductions following the acquisition.
Healthy Balance Sheet
DCM improved its leverage ratio from 2.7 times to 1.8 times net debt to EBITDA, maintaining strong credit availability and initiating both a special and recurring dividend.
Lowlights
Impact of Canada Post Strike
The Canada Post strike negatively impacted revenue by approximately $3 to $4 million in Q4 2024, affecting direct mail services and client operations.
Tariff Concerns
Potential tariffs could impact raw material costs and pricing strategies, particularly for large format lithography products exported to the U.S.
Underperformance in Expected Organic Growth
Underlying organic growth was lower than anticipated due to the exit from low-margin businesses, facility closures, and ERP consolidation impacts.
Company Guidance
The call provided comprehensive guidance for Data Communications Management Corp. for the fiscal year 2024, highlighting several key metrics and achievements. The company reported a record revenue increase of 7.2% compared to 2023, reaching $480 million, with gross profit rising by 9.4% to $130 million. Adjusted EBITDA also hit a record $63.9 million, growing nearly 20% year-over-year. The successful integration of Moore Canada Corp resulted in the consolidation of facilities from 14 to 10 and achieved annualized synergies of $30 to $35 million. The company announced a special dividend of $0.20 per share and committed to quarterly dividends of $0.025 per share, implying a dividend yield of about 4.5%. Their revenue per employee increased to $337,000, reflecting efficiency improvements and significant headcount reductions post-acquisition. For 2025, the company aims for a 5% CAGR, gross profit margins north of 30%, and adjusted EBITDA margins over 14%, with a strong emphasis on driving organic growth, leveraging technological advancements, and maintaining a robust balance sheet for future opportunities.Data Commun Management Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Data Communications Management Corp. Achieves Strong 2024 Financial Performance
Positive
Mar 12, 2025
Data Communications Management Corp. reported a successful financial year in 2024, with revenues increasing by 7.2% to $480 million and gross profit rising by 9.4% to $130.1 million. The company completed the integration of Moore Canada Corporation ahead of schedule, positioning itself for future growth and profitability. Despite a challenging fourth quarter, DCM announced a special dividend and a regular quarterly dividend program, reflecting confidence in its growth potential. The company is actively mitigating risks from economic and geopolitical factors, including tariffs and raw material costs, by diversifying its supply chain.
Business Operations and StrategyFinancial Disclosures
DCM Projects Strong Fiscal 2024 Results Amid Successful Integration
Positive
Feb 27, 2025
Data Communications Management Corp. announced its preliminary financial results for fiscal 2024, projecting revenues between $478 to $480 million and an Adjusted EBITDA of $62 to $64 million. The company has successfully integrated Moore Canada Corporation ahead of schedule, and despite challenges such as exiting low-margin accounts and a Canada Post strike, DCM is poised to leverage its expanded scale and product mix to drive profitable growth and achieve a target gross profit margin of over 30%.
Dividends
DATA Communications Management Announces Dividend Program and Special Dividend
Positive
Feb 20, 2025
DATA Communications Management Corp. announced the initiation of a dividend program, declaring a special cash dividend of $0.20 per share and a regular quarterly dividend of $0.025 per share. This decision reflects confidence in the company’s growth potential and cash flow capabilities following the integration of Moore Canada Corporation. The dividend program highlights the company’s improved financial leverage and is expected to enhance shareholder returns.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.