DIRTT Environmental Solutions (DRT) AI Stock Analysis

• Market Cap: C$178.42M
• Dividend Yield: N/A
• Average Volume (3M): 52.26K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.71
• Revenue Growth: -2.73%
• EPS Growth: -155.71%
• Country: CA
• Employees: 842
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.03
• Shares Outstanding: 191,852,870
• 10 Day Avg. Volume: 74,932
• 30 Day Avg. Volume: 52,256
• PEG Ratio: 0.04
• Price to Book (P/B): 4.44
• Price to Sales (P/S): 0.74
• P/FCF Ratio: -47.73
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.04
• Revenue Forecast (FY): C$188.40M

• Rating: 48 Neutral
• Price Target: C$0.92 ▲(3.48% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is held back primarily by weak financial performance (return to losses, negative free cash flow, and elevated/increasing leverage). Technicals are a partial offset with the stock trading above key moving averages and mildly positive momentum, but valuation remains constrained due to a negative P/E and no dividend yield data.

Positive Factors

Modular, reconfigurable interior model

DIRTT’s core prefabricated and reconfigurable interior systems reduce onsite labour, schedules and waste versus built-in-place construction. This model supports repeatable manufacturing, faster project throughput and lower installation complexity — durable advantages in renovation-driven markets and sustainability-focused tenders.

Proprietary software-enabled configuration (ICE)

A proprietary configuration/design workflow materially ties engineering, manufacturing and installation, lowering specification friction and error. Software-driven fabrication creates switching costs, streamlines project delivery, and supports scalable margin improvement when adoption across channels deepens — a structural commercial moat.

Proven ability to generate cash historically

Prior years of positive operating and free cash flow demonstrate the business can convert modular project revenue into internal liquidity when execution and margins align. That operational cash-generation capacity indicates manufacturing and working-capital processes can scale profitably under the right conditions.

Negative Factors

Elevated and rising leverage

Leverage more than doubled year-over-year, tightening financial flexibility. Higher debt loads increase interest and refinancing risk, limit capacity to invest in product R&D or capacity expansion, and raise the likelihood of dilutive or costly financing if operating performance does not stabilize over the medium term.

Negative free cash flow in 2025

The shift to negative free cash flow erodes the company’s ability to fund working capital and capex internally. Persistent negative FCF alongside elevated debt increases reliance on external capital, heightens refinancing risk, and constrains strategic flexibility during cyclical downturns in construction activity.

Profitability volatility and margin compression

A sharp gross margin decline and a swing from profit to loss indicate pricing pressure or rising input/installation costs and weak operating leverage. This earnings volatility undermines predictable cash flow and makes long-term planning and reinvestment harder, increasing operational and execution risk.

DIRTT Environmental Solutions Business Overview & Revenue Model

Company Description

DIRTT Environmental Solutions Ltd. designs, manufactures, and installs prefabricated interior solutions for use in commercial spaces across various industries and businesses in the United States, Canada, internationally. Its ICE software interior construction software provides end-to-end integration, design, order engineering, manufacturing, and installation services. The company's interior construction solutions include prefabricated, customized interior modular walls, ceilings, and floors; decorative and functional millwork; power infrastructure; network infrastructure; and pre-installed medical gas piping systems. It offers interior construction solutions through a network of independent distribution partners. It serves commercial, healthcare, education, hospitality, and other industries, as well as medical gas piping systems for healthcare. DIRTT Environmental Solutions Ltd. was incorporated in 2003 and is headquartered in Calgary, Canada.

How the Company Makes Money

DIRTT generates revenue primarily through the sale of its modular construction products and systems to commercial clients. The company operates a business-to-business model where it partners with architects, designers, and contractors to integrate its products into larger construction projects. Key revenue streams include direct sales of modular wall systems, as well as recurring revenue from services related to installation, maintenance, and upgrades of its products. Additionally, DIRTT has established strategic partnerships with various construction firms and technology providers, enhancing its market reach and enabling collaborative projects that can lead to increased sales. The company's focus on sustainability and efficiency also positions it well to capitalize on the growing demand for environmentally friendly building solutions.

DIRTT Environmental Solutions Financial Statement Overview

Summary

Financial results are volatile and recently deteriorated: 2025 returned to a sizable net loss with negative operating profit and notable gross margin compression versus 2024. Leverage is elevated and increased (debt-to-equity ~2.19x in 2025), while cash generation weakened sharply with negative free cash flow, reducing financial flexibility.

Income Statement

Revenue has been relatively flat over the cycle (2025: +3.0% after a small decline in 2024), but profitability is volatile and recently deteriorated. After a profitable 2024 (about 8.5% net margin), 2025 returned to a sizable net loss (about -8.6% net margin) and negative operating profit, indicating execution/price-cost pressure and limited earnings durability. Gross margin also compressed meaningfully (about 37% in 2024 to ~29% in 2025), reinforcing weaker operating leverage.

Balance Sheet

Leverage is elevated and has increased again recently: debt-to-equity moved from ~1.23x (2024) to ~2.19x (2025), while returns to shareholders swung from strong positive (2024) to materially negative (2025) as losses returned. The balance sheet did improve versus the extreme stress seen in 2023 (very high leverage then), but the current debt load relative to equity and the lack of consistent profitability remain key risks.

Cash Flow

Cash generation weakened sharply in 2025, with operating cash flow roughly breakeven-to-negative and free cash flow negative, a major step down from positive operating and free cash flow in 2023–2024. This reversal suggests working-capital or profitability headwinds and reduces financial flexibility, particularly given the company’s leverage. While 2023 showed strong cash generation despite losses, the latest year’s negative free cash flow increases refinancing and funding risk if the trend persists.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	171.81M	174.31M	181.93M	172.16M	147.59M
Gross Profit	50.48M	64.38M	59.54M	28.16M	23.46M
EBITDA	5.69M	25.79M	-391.00K	-37.77M	-45.42M
Net Income	-14.70M	14.77M	-14.58M	-54.96M	-53.67M
Balance Sheet
Total Assets	102.32M	118.22M	124.32M	143.65M	199.44M
Cash, Cash Equivalents and Short-Term Investments	20.54M	29.29M	24.74M	10.82M	60.31M
Total Debt	62.48M	52.32M	89.75M	98.86M	104.12M
Total Liabilities	73.83M	75.63M	117.22M	125.66M	131.67M
Stockholders Equity	28.48M	42.59M	7.10M	17.99M	67.77M
Cash Flow
Free Cash Flow	-2.65M	4.16M	11.79M	-48.33M	-45.33M
Operating Cash Flow	-195.36K	7.34M	14.82M	-44.26M	-31.21M
Investing Cash Flow	-3.79M	-1.90M	7.66M	-4.02M	-14.14M
Financing Cash Flow	-5.07M	-415.00K	-11.61M	-874.00K	62.45M

DIRTT Environmental Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DRT, the sentiment is Positive. The current price of 0.89 is above the 20-day moving average (MA) of 0.85, above the 50-day MA of 0.88, and above the 200-day MA of 0.87, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 60.92 is Neutral, neither overbought nor oversold. The STOCH value of 87.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:DRT.

DIRTT Environmental Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATRL	73 Outperform	C$15.94B	5.72	56.38%	0.09%	13.97%	715.65%
BDT	69 Neutral	C$1.80B	13.18	21.68%	2.88%	6.26%	0.52%
STN	66 Neutral	C$14.72B	30.82	15.59%	0.67%	11.73%	41.17%
ARE	65 Neutral	C$2.39B	9.42	0.92%	2.38%	25.68%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AEP	53 Neutral	C$47.77M	7.34	-1.07%	―	9.30%	-151.79%
DRT	48 Neutral	C$178.42M	-8.61	-18.77%	―	-2.73%	-155.71%

DIRTT Environmental Solutions Corporate Events

DIRTT Posts Higher Q4 Revenue but Swings to Loss as Transformation and Refinancing Accelerate

DIRTT Environmental Solutions reported fourth-quarter 2025 revenue of $50.9 million, up 4% year over year, with gross margin improving to 36.6%, but it swung to a net loss of $3.7 million from a prior-year profit despite stronger adjusted EBITDA of $6.2 million. Liquidity declined to $32.1 million, and the company is actively managing its balance sheet and cost base through refinancing, an early lease termination with related impairment, and repayment of convertible debentures.

The company advanced a broad transformation and governance agenda, adding an executive chairman, a chief transformation officer, and a new chief technology officer while renewing its share buyback program and securing up to C$15 million in financing from the Business Development Bank of Canada alongside amendments to its RBC credit facility. DIRTT also continued to defend its intellectual and competitive position through ongoing litigation against Falkbuilt and strengthened shareholder alignment via a new support and standstill agreement with its largest investor, moves that collectively aim to bolster its strategic position amid operational and financial headwinds.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$0.84 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

DIRTT Sets Date for Q4 2025 Results and Investor Call

DIRTT Environmental Solutions said it will release its fourth quarter 2025 financial results on February 25, 2026, after markets close, followed by a webcast and conference call on February 26 hosted by CEO Benjamin Urban and CFO Fareeha Khan. The planned results announcement and analyst Q&A underscore ongoing investor engagement around DIRTT’s performance and strategy in the industrialized construction and modular interiors market, with replay access available via the company’s investor website.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$0.84 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

DIRTT Reshapes Governance as 726 Entities Take 15% Stake and Board Seat

DIRTT Environmental Solutions has entered into a new support and standstill agreement with its largest shareholder, 22NW Fund, and the 726 Entities, coinciding with the 726 Entities’ acquisition of a 15% stake in the company from WWT Opportunity #1 LLC. As part of the agreement, DIRTT appointed Jeremy Gold of the Briger Family Office to its board as the nominee of the 726 Entities, reinforcing investor influence and governance as the company pursues its transformation strategy.

Under the revised governance arrangements, both 22NW and the 726 Entities gain the right to nominate one director each at DIRTT’s 2026 annual general meeting, contingent on maintaining specified ownership thresholds, while committing to voting support for management’s slate and observing standstill restrictions, including limits on additional share purchases and take-over bids. The deal replaces WWT’s prior nomination rights, reshaping DIRTT’s shareholder alignment and board composition, and formalizes early warning disclosures reflecting the shift in major shareholdings following the transfer of nearly 29 million shares to the 726 Entities.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$0.84 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

DIRTT Sees Year-End Surge in Commercial Activity as Projects Shift to Execution

DIRTT Environmental Solutions reported strong commercial activity in December 2025 as clients moved projects from planning to execution, particularly across healthcare, public sector, and workplace environments. The company’s performance is aligning with broader market improvements, including a rise in construction planning indicators and shorter planning timelines, and is highlighted by a major project exceeding $7 million with U-Haul and engagements with prominent clients such as Google Toronto and the Texas Department of Public Safety, underscoring growing demand for DIRTT’s flexible, fast-to-deploy interior construction solutions and enhancing its near-term project visibility.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$0.84 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

DIRTT Reports Strong Year-End Momentum with Major Project Wins

DIRTT Environmental Solutions reported strong year-end commercial momentum with over $15 million in orders from clients like Visa, ExxonMobil, and LinkedIn, indicating robust demand in the industrialized construction sector. The company’s continued project wins and increased planning activity across the industry suggest a stable environment for interior construction, with DIRTT focusing on enhancing client support throughout project lifecycles.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$0.85 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.