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DIRTT Environmental Solutions (TSE:DRT)
TSX:DRT
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DIRTT Environmental Solutions (DRT) AI Stock Analysis

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TSE:DRT

DIRTT Environmental Solutions

(TSX:DRT)

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Neutral 51 (OpenAI - 4o)
Rating:51Neutral
Price Target:
C$1.00
▲(5.26% Upside)
The overall stock score of 51 reflects the company's financial challenges, including declining revenue and high leverage, which weigh heavily on the score. While technical indicators show positive momentum, the high P/E ratio suggests potential overvaluation. The earnings call highlights both challenges and growth opportunities, but the financial performance remains the most significant factor.

DIRTT Environmental Solutions (DRT) vs. iShares MSCI Canada ETF (EWC)

DIRTT Environmental Solutions Business Overview & Revenue Model

Company DescriptionDIRTT 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 MoneyDIRTT 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 Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant challenges posed by revenue decline, decreased profit margins, and increased costs due to tariffs. However, the company is optimistic about its growth prospects, given the expansion of its sales pipeline and strategic innovations. Despite the current financial setbacks, DIRTT is focusing on operational efficiency and safety, while expanding product offerings and market reach.
Q2-2025 Updates
Positive Updates
Increased Sales Pipeline
DIRTT's 12-month forward sales pipeline increased by 12% to $311 million from $278 million at the start of 2025, the first time in over two years exceeding $300 million.
Successful Project with Integrated Solutions Team
DIRTT's integrated solutions team supported a partner in securing an $11 million project and an additional $4 million opportunity with a Fortune 200 client in the semiconductor space.
Expansion and Product Innovation
DIRTT expanded into new markets with a new one-hour fire-rated wall for healthcare and life sciences and introduced office pods to meet changing workplace demands.
Operational Efficiency and Safety
Achieved a 99% on-time in-full delivery performance and maintained a strong safety record with a total recordable incident rate 62% lower than the industry average.
Negative Updates
Revenue Decline
Revenues for Q2 2025 were $38.9 million, a decrease of 6% compared to the same period of 2024, due to delayed customer orders and construction schedule pushouts.
Decreased Gross Profit Margin
Gross profit margin decreased from 37.3% to 27.8% year-over-year, impacted by tariff duties and lower revenue volumes.
Increased Tariffs and Costs
The introduction of a 50% tariff on aluminum and steel in June 2025 significantly impacted costs, with aluminum costs representing about 10% of total product revenue.
Net Loss
Net loss after tax for Q2 2025 was $6.6 million compared to a net income of $0.6 million in Q2 2024, due to decreased gross profit, foreign exchange gain, and increased operating expenses.
Negative Adjusted EBITDA
Adjusted EBITDA for Q2 2025 was a $2 million loss, down from a $3.2 million adjusted EBITDA in Q2 2024.
Decreased Cash Position
Cash decreased from $29.3 million at year-end 2024 to $23.1 million, with cash used in operations amounting to $3.9 million.
Company Guidance
During the second quarter of 2025, DIRTT Environmental Solutions faced macroeconomic challenges, including tariff-driven costs and delayed contracts, leading to a 6% decrease in revenue to $38.9 million compared to the same period in 2024. The gross profit margin fell from 37.3% to 27.8%, significantly impacted by tariffs on exports to the U.S. and lower revenue volumes. Operating expenses rose by 6% to $15.2 million, primarily due to increased litigation and compensation costs, while net loss after tax was $6.6 million, a stark contrast to the previous year's net income of $0.6 million. The adjusted EBITDA showed a $2 million loss, down from a $3.2 million gain in 2024. The company ended the quarter with $23.1 million in unrestricted cash, and its 12-month forward sales pipeline increased by 12% to $311 million. Looking ahead, DIRTT expects to mitigate tariff impacts by the fourth quarter and anticipates a return to positive adjusted EBITDA, driven by strategic growth initiatives and a strong sales pipeline.

DIRTT Environmental Solutions Financial Statement Overview

Summary
DIRTT Environmental Solutions shows moderate financial performance with notable strengths in operational efficiency, indicated by improved EBIT and EBITDA margins. However, inconsistent revenue growth and high leverage are concerns, despite robust cash flow performance supporting operations.
Income Statement
45
Neutral
DIRTT Environmental Solutions showed moderate improvement in financial performance. The gross profit margin for TTM stands at 36.76%, indicating efficient cost management relative to production costs. However, the net profit margin is modest at 6.33% for TTM, reflecting challenges in achieving higher profitability. Revenue growth has been inconsistent, with a recent decrease of 4.19% from 2023 to 2024 and a slight increase of 0.26% from 2024 to TTM, suggesting fluctuating demand or market conditions. EBIT and EBITDA margins have improved to 2.35% and 12.27% respectively for TTM, showing operational improvements.
Balance Sheet
40
Negative
The balance sheet reveals a mixed financial stability picture. The debt-to-equity ratio is high at 1.31 for TTM, signaling potential leverage risks and reliance on debt financing. However, equity has improved, with a positive return on equity (ROE) of 28.22% for TTM, indicating effective utilization of shareholder funds. The equity ratio stands at 35.03%, reflecting a moderate level of equity financing relative to total assets, which could be strengthened further to enhance financial stability.
Cash Flow
35
Negative
Cash flow analysis shows positive trends, with a strong free cash flow growth rate of 138.12% from 2023 to 2024, and an operating cash flow to net income ratio of 1.18 for TTM, indicating effective cash generation relative to earnings. The free cash flow to net income ratio is 0.89 for TTM, highlighting solid conversion of profit into cash, which supports operational and strategic initiatives.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue172.48M174.31M181.93M172.16M147.59M171.51M
Gross Profit59.71M64.38M59.54M28.16M23.46M53.28M
EBITDA13.60M25.79M-391.00K-37.77M-45.42M3.78M
Net Income3.87M14.77M-14.58M-54.96M-53.67M-11.30M
Balance Sheet
Total Assets109.50M118.22M124.32M143.65M199.44M183.14M
Cash, Cash Equivalents and Short-Term Investments23.10M29.29M24.74M10.82M60.31M45.85M
Total Debt52.17M52.32M89.75M98.86M104.12M47.22M
Total Liabilities75.01M75.63M117.22M125.66M131.67M66.61M
Stockholders Equity34.49M42.59M7.10M17.99M67.77M116.53M
Cash Flow
Free Cash Flow4.09M4.16M11.79M-48.33M-45.33M-7.63M
Operating Cash Flow7.51M7.34M14.82M-44.26M-31.21M12.48M
Investing Cash Flow-3.04M-1.90M7.66M-4.02M-14.14M-19.39M
Financing Cash Flow-20.64M-415.00K-11.61M-874.00K62.45M5.72M

DIRTT Environmental Solutions Technical Analysis

Technical Analysis Sentiment
Positive
Last Price0.95
Price Trends
50DMA
0.80
Positive
100DMA
0.81
Positive
200DMA
0.92
Positive
Market Momentum
MACD
0.04
Negative
RSI
63.41
Neutral
STOCH
77.12
Neutral
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 0.95 is above the 20-day moving average (MA) of 0.87, above the 50-day MA of 0.80, and above the 200-day MA of 0.92, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 63.41 is Neutral, neither overbought nor oversold. The STOCH value of 77.12 is Neutral, 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

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
C$1.64B16.4125.25%2.73%8.49%14.10%
$2.37B31.0621.65%1.02%11.48%38.41%
C$1.80B70.800.92%2.36%20.53%74.96%
$10.79B15.437.44%2.01%2.89%-14.66%
$163.68M55.8411.65%-2.68%
C$49.97M-33.63-3.10%6.65%-185.11%
C$2.43M2.22
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:DRT
DIRTT Environmental Solutions
0.95
0.05
5.56%
TSE:BDGI
Badger Infrastructure Solutions
72.81
37.47
106.01%
TSE:ARE
Aecon Group Inc.
30.92
3.32
12.03%
TSE:AEP
Atlas Engineered Products Ltd
0.74
-0.43
-36.75%
TSE:BDT
Bird Construction
30.21
0.08
0.27%
TSE:MSP
Minaean SP Construction
0.02
0.00
0.00%

DIRTT Environmental Solutions Corporate Events

Financial Disclosures
DIRTT to Release Q3 2025 Financial Results
Neutral
Oct 28, 2025

DIRTT Environmental Solutions announced it will release its third quarter 2025 financial results on November 5, 2025, after market close. The company will host a conference call and webcast on November 6, 2025, to discuss the results, led by CEO Benjamin Urban and CFO Fareeha Khan. This announcement is part of DIRTT’s ongoing efforts to engage with stakeholders and provide transparency about its financial performance.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$1.00 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

Business Operations and Strategy
DIRTT Secures $7 Million in New Projects Amid Market Growth
Positive
Oct 9, 2025

DIRTT Environmental Solutions has secured over $7 million in new projects, indicating a strong commercial pipeline with contracts across healthcare, workplace, and aviation sectors. Notable projects include The Hospitals of Providence in El Paso and The Ohio State University Wexner Medical Center, showcasing DIRTT’s success in scalable healthcare programs. The company’s forward pipeline has grown, reflecting sustained demand for its adaptable construction solutions, while favorable market trends suggest continued expansion in construction planning.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$1.00 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

Business Operations and Strategy
DIRTT Environmental Solutions to Engage Investors at Upcoming Conferences
Neutral
Sep 18, 2025

DIRTT Environmental Solutions announced its participation in two upcoming investor conferences: the Smallcap Discoveries Conference in Vancouver and the Planet MicroCap Showcase in Toronto. This participation reflects DIRTT’s ongoing efforts to engage with investors and stakeholders, potentially enhancing its visibility and positioning in the industrialized construction industry.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$1.00 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

Business Operations and Strategy
DIRTT Environmental Solutions Announces Major Project Wins and Pipeline Growth
Positive
Sep 16, 2025

DIRTT Environmental Solutions has announced significant project wins and an increased forward pipeline, highlighting continued commercial momentum across various sectors. The company secured a $3.5 million contract with Google for its Caribbean campus in Sunnyvale, California, and expanded its relationship with Allina Health for a $16 million project in Minneapolis, MN. These developments, along with a 5.7% increase in their 12-month forward pipeline, underscore DIRTT’s growth trajectory and market expansion in its core sectors.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$0.50 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

Stock Buyback
DIRTT Environmental Solutions Renews NCIB for Debentures
Neutral
Aug 26, 2025

On August 26, 2025, DIRTT Environmental Solutions announced that the Toronto Stock Exchange accepted its notice to renew its normal course issuer bid (NCIB) for its convertible unsecured subordinated debentures. The renewed NCIB allows DIRTT to purchase a specified principal amount of its debentures, representing 10% of the total public float, with the purchases commencing on August 28, 2025. The company plans to make these purchases based on market conditions and other factors, with all acquired debentures being immediately canceled. This move is expected to provide DIRTT with flexibility in managing its capital and responding to market conditions.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$0.50 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

DIRTT Environmental Solutions Faces Challenges Amid Growth
Aug 2, 2025

The recent earnings call for DIRTT Environmental Solutions Ltd. painted a mixed picture of the company’s current standing. While there were positive developments such as a notable increase in the sales pipeline and enhanced product offerings, these were overshadowed by significant challenges. The company faced decreased revenue, shrinking profit margins, and a net loss after tax, primarily due to tariff impacts and increased operating expenses.

DIRTT Environmental Solutions Reports Q2 2025 Results
Aug 1, 2025

DIRTT Environmental Solutions Ltd., based in Calgary, Alberta, is a leader in industrialized construction, offering adaptable interior environments for sectors such as healthcare, education, and the public sector. The company is known for its innovative approach to interior construction, providing flexibility and design freedom.

Business Operations and StrategyExecutive/Board Changes
DIRTT Environmental Solutions Appoints Adrian Zarate to Board of Directors
Positive
Jul 30, 2025

DIRTT Environmental Solutions has appointed Adrian Zarate to its Board of Directors, representing its largest shareholder, 22NW Fund, LP. This move is part of DIRTT’s ongoing efforts to strengthen its leadership and capture more market share, following a successful turnaround led by 22NW since 2022.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$2.00 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
DIRTT Environmental Solutions Faces Tariff Challenges but Remains Optimistic for Future Growth
Negative
Jul 30, 2025

DIRTT Environmental Solutions reported a decline in revenue and gross profit margin for the second quarter of 2025, largely due to increased tariffs on Canadian aluminum exports to the United States. The company experienced a net loss and decreased liquidity, but remains optimistic about future growth through product innovation and market expansion. Despite macroeconomic challenges, DIRTT is focused on revenue growth and expects to return to positive Adjusted EBITDA by the fourth quarter of 2025.

The most recent analyst rating on (TSE:DRT) stock is a Hold with a C$2.00 price target. To see the full list of analyst forecasts on DIRTT Environmental Solutions stock, see the TSE:DRT Stock Forecast page.

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.Date of analysis: Oct 25, 2025