Evertz Technologies (ET) AI Stock Analysis

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Evertz Technologies

(TSX:ET)

Rating:79Outperform

Price Target:―

Evertz Technologies' strong financial performance, characterized by low debt and robust cash flows, underpins the stock's appeal. Positive earnings call sentiment and strong sales growth in key markets bolster confidence. However, the stock faces challenges such as declining international revenue and technical indicators showing potential resistance. The reasonable valuation and attractive dividend yield provide further support.

Positive Factors

Market Position

Evertz is benefiting from a strong competitive position in the broadcast technology market, which is expected to drive earnings and dividend growth.

Sales Performance

NA sales reversed declining trend this quarter, growing 28% year-over-year.

Valuation

Evertz's stock valuation is considered attractive due to its dividend yield and a growing mix of software/cloud services.

Negative Factors

International Performance

International segment continued to struggle, posting a 46% year-over-year decline this quarter.

Production Costs

The potential impact of tariffs on Evertz's production costs might affect gross margins.

Revenue Expectations

Evertz's Q4/25 revenue is expected to be below consensus estimates, with February shipments pointing to a lower figure.

Evertz Technologies (ET) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$916.58M

Dividend Yield6.55%

Average Volume (3M)18.05K

Price to Earnings (P/E)15.2

Beta (1Y)0.60

Revenue Growth-4.64%

EPS Growth-19.57%

CountryCA

Employees1,591

SectorTechnology

Sector Strength83

IndustryCommunication Equipment

Share Statistics

EPS (TTM)0.27

Shares Outstanding75,750,240

10 Day Avg. Volume14,050

30 Day Avg. Volume18,051

Financial Highlights & Ratios

PEG Ratio3.73

Price to Book (P/B)3.24

Price to Sales (P/S)0.00

P/FCF Ratio9.55

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$14.00

Price Target Upside16.09% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Evertz Technologies Business Overview & Revenue Model

Company DescriptionEvertz Technologies (ET) is a leading global provider of video and audio infrastructure solutions for the television, telecommunications, and new-media industries. The company specializes in designing and manufacturing a broad range of cutting-edge products, including video routers, signal processors, and automation systems, which facilitate the production and distribution of high-quality content across various platforms. Evertz serves major broadcasters, cable and satellite companies, and content creators worldwide, offering innovative solutions that enhance workflow efficiencies and improve the viewing experience.

How the Company Makes MoneyEvertz Technologies generates revenue primarily through the sale of its advanced hardware and software solutions tailored for the media and entertainment industry. The company's key revenue streams include the sale of broadcasting equipment, such as video routers and signal processors, and software solutions, including automation and media asset management systems. Additionally, Evertz offers support and maintenance services, which provide a steady stream of recurring income. Significant partnerships with major broadcasters and media companies around the world further bolster Evertz's market presence and contribute to its earnings. The company's focus on innovation and the development of new technologies also plays a crucial role in maintaining its competitive edge and driving revenue growth.

Evertz Technologies Earnings Call Summary

Earnings Call Date:Mar 05, 2025

(Q3-2025)

% Change Since: 7.01%|

Next Earnings Date:Jun 25, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong sales growth, particularly in the U.S. and Canada, and an increase in software services revenue. However, challenges such as the decline in international revenue, potential impacts of U.S. tariffs, and increased expenses were noted. Despite these challenges, the overall sentiment is positive due to record sales and a robust order backlog.

Q3-2025 Updates

Positive Updates

Record Quarterly Sales

Evertz reported record-high quarterly sales of $136.9 million, marking a 9% sequential increase and a 1% year-over-year increase.

Strong U.S. and Canada Revenue Growth

Revenue from the U.S. and Canada increased by 23% quarter-over-quarter, totaling $99.1 million, and by 11% year-over-year for the nine months ended January 31, 2025.

Growth in Software Services

Recurring software services and other software revenues increased by 6.3% year-over-year, totaling $55 million in the quarter.

Robust Order Backlog

Evertz's purchase order backlog was in excess of $269 million in February 2025, with shipments during the month totaling $39 million.

Dividend Declaration

Evertz's board declared a regular quarterly dividend of $0.20 per share, payable on or about March 20.

Negative Updates

Decline in International Revenue

International revenue decreased by 31% quarter-over-quarter, from $54.8 million last year to $37.8 million this year, and by 29.5% year-over-year for the nine months ended January 31, 2025.

Impact of U.S. Tariffs

Evertz is anticipating some negative impact on margins due to U.S. tariffs and is working on expanding manufacturing capabilities in the U.S. to mitigate this risk.

Decrease in Gross Margin

Gross margin for the quarter decreased slightly to 57.8% from 58.9% in the same quarter last year, driven by product mix.

Increased R&D and S&A Expenses

Research and development expenses increased to $36.6 million, up $2.6 million from last year, and selling and administrative expenses increased by $900,000, representing 14% of revenue.

Company Guidance

In the Evertz Technologies Q3 2025 conference call, key metrics were highlighted by Brian Campbell and Doug Moore. Sales for the third quarter totaled $136.9 million, marking a 9% sequential increase and a 1% year-over-year rise. Revenue from the U.S. and Canada region was $99.1 million, up 23% sequentially. Recurring software services revenue increased by 6.3% year-over-year, amounting to $55 million. The gross margin stood at $79.1 million or 57.8%, while R&D investment reached $36.6 million. Net earnings were reported at $21.1 million, and diluted EPS was $0.27. The backlog exceeded $269 million, with February shipments at $39 million. Evertz maintained a working capital of $207.9 million and cash reserves of $96.3 million as of January 31, 2025. The board declared a quarterly dividend of $0.20 per share, payable around March 20.

Evertz Technologies Financial Statement Overview

Summary

Evertz Technologies demonstrates a resilient financial standing with strong profitability and efficiency, especially in its operational management and cash conversion. The income statement shows mixed performance with efficient cost management but a contraction in sales. The balance sheet reflects a strong position with low debt and effective equity utilization. Cash flows are healthy, indicating strong cash generation despite revenue concerns.

Income Statement

Positive

The income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is strong at around 58.4%, indicating efficient cost management. However, the TTM net profit margin is relatively lower at 12.1%, suggesting that while gross profits are high, operational and other expenses are impacting the bottom line. The revenue growth rate from the previous annual period to TTM is negative, indicating a contraction in sales, which is a concern. Despite this, EBIT and EBITDA margins remain healthy, suggesting strong operational efficiency.

Balance Sheet

Very Positive

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.08, indicating low financial leverage and risk. The return on equity (ROE) for TTM is approximately 22.3%, demonstrating effective use of shareholders' equity to generate profit. The equity ratio is robust at 57.1%, indicating a strong capital structure with a significant portion of assets financed by equity rather than debt.

Cash Flow

Very Positive

The cash flow statement is strong, with a healthy operating cash flow to net income ratio of 1.65, indicating that the company effectively converts its earnings into cash. The free cash flow to net income ratio is also robust at 1.52. Although the free cash flow growth rate is negative, due to a decrease compared to the previous year, the company maintains solid cash generation capabilities.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
496.59M	514.62M	454.58M	441.02M	342.89M	436.59M
	Gross Profit
290.06M	293.97M	268.26M	255.31M	199.42M	248.38M
	EBIT
50.09M	85.53M	93.66M	94.74M	72.85M	89.07M
	EBITDA
97.36M	110.99M	100.28M	107.10M	62.65M	102.48M
	Net Income Common Stockholders
60.15M	70.17M	64.03M	71.75M	41.76M	68.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
61.73M	86.33M	12.47M	33.90M	108.77M	75.03M
	Total Assets
451.17M	484.72M	436.65M	420.98M	451.79M	443.67M
	Total Debt
21.24M	23.22M	28.82M	26.85M	25.37M	30.10M
	Net Debt
-40.49M	-63.11M	16.35M	-7.05M	-83.40M	-44.92M
	Total Liabilities
185.62M	218.04M	190.57M	187.33M	156.89M	146.25M
	Stockholders Equity
262.48M	263.27M	243.10M	230.94M	292.73M	295.01M
Cash Flow		Free Cash Flow
91.42M	135.12M	47.24M	63.20M	91.42M	99.24M
	Operating Cash Flow
99.51M	144.67M	53.81M	68.67M	101.00M	109.29M
	Investing Cash Flow
-7.90M	-2.26M	-17.12M	-4.96M	-18.64M	-5.74M
	Financing Cash Flow
-67.47M	-70.21M	-58.02M	-137.52M	-49.38M	-132.66M

Evertz Technologies Technical Analysis

Technical Analysis Sentiment

Positive

Last Price12.06

Price Trends

50DMA

11.09

Positive

100DMA

11.43

Positive

200DMA

11.67

Positive

Market Momentum

MACD

0.25

Positive

RSI

65.14

Neutral

STOCH

55.42

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ET, the sentiment is Positive. The current price of 12.06 is above the 20-day moving average (MA) of 11.89, above the 50-day MA of 11.09, and above the 200-day MA of 11.67, indicating a bullish trend. The MACD of 0.25 indicates Positive momentum. The RSI at 65.14 is Neutral, neither overbought nor oversold. The STOCH value of 55.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ET.

Evertz Technologies Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ET	79 Outperform	C$916.58M	15.25	22.71%	6.55%	-4.64%	-19.57%
BEW	75 Outperform	C$68.14M	114.93	7.04%	―	41.67%	-23.86%
VCM	68 Neutral	C$252.63M	67.46	1.61%	2.14%	9.13%	-77.24%
Sector *	62 Neutral	$11.72B	10.43	-7.10%	2.91%	7.41%	-7.94%
QTRH	49 Neutral	C$161.55M	―	-11.53%	―	4.23%	47.22%
TSAT	49 Neutral	C$325.15M	8.35	-12.49%	―	-20.40%	-161.60%
CMI	46 Neutral	C$45.21M	24.42	-4.55%	4.67%	-41.82%	-149.06%

* Technology Sector Average

Performance Comparison

TSE:ET

Evertz Technologies

12.05

-1.93

-13.81%

TSE:QTRH

Quarterhill

1.40

-0.36

-20.45%

TSE:CMI

C-Com Satellite Systems

0.97

-0.22

-18.49%

TSE:BEW

BeWhere Holdings

0.78

0.37

90.24%

TSE:VCM

Vecima Networks

10.04

-11.15

-52.62%

TSE:TSAT

Telesat Corp

22.03

9.65

77.95%

Evertz Technologies Corporate Events

Business Operations and StrategyFinancial Disclosures

Evertz Technologies Achieves Record Revenue in Q3 2025

Positive

Mar 5, 2025

Evertz Technologies reported a record quarterly revenue of $136.9 million for the third quarter ending January 31, 2025, marking a 9% increase from the previous quarter. The company saw significant growth in its reoccurring software and services revenue, which rose by 6% from the prior year, alongside an 8% increase in earnings from operations. This financial performance underscores Evertz’s strong market positioning and operational efficiency, particularly in the United States and Canada, despite a decline in international revenues.

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.