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VerticalScope Holdings, Inc. (TSE:FORA)
TSX:FORA
RESEARCH TOOLSreports
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VerticalScope Holdings, Inc.
(TSX:FORA)
51Neutral
Positive Factors
Financial Performance
The company closed with a significantly improved balance sheet, reducing net debt/LTM EBITDA from 2.2x to 1.1x, with expectations to ease further to 0.4x.
Growth Prospects
The company is closing in on a $5M acquisition that would add 3.5M to overall MAUs, further enhancing growth prospects.
Negative Factors
ECommerce Performance
ECommerce revenues declined by 9% year-over-year, slightly below expectations due to lower e-Commerce average revenue per user.
Market Conditions
There has been a sharp sell-off in digital media names, which could impact the company, depending on macroeconomic conditions and ad spend.
VerticalScope Holdings, Inc. (FORA) vs. S&P 500 (SPY)
Market Cap
C$186.73M
Dividend YieldN/A
Average Volume (3M)69.59K
Price to Earnings (P/E)62.5
Beta (1Y)1.06
Revenue Growth15.19%
EPS Growth99.55%
CountryCA
Employees191
SectorCommunication Services
Sector Strength74
IndustryInternet Content & Information
Share Statistics
EPS (TTM)>-0.01
Shares Outstanding18,755,335
10 Day Avg. Volume57,680
30 Day Avg. Volume69,586
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.98
Price to Cash Flow (P/CF)4.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$16.42Price Target Upside86.17% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
VerticalScope Holdings, Inc. Business Overview & Revenue Model
Company DescriptionVerticalScope Holdings, Inc. (FORA) is a digital media company that operates online communities and websites across various interest verticals. The company specializes in building and managing platforms that connect enthusiasts and niche audiences, providing a space for discussions, content sharing, and engagement. By leveraging its expertise in digital advertising and online community management, VerticalScope serves sectors such as automotive, technology, sports, and outdoor recreation.
How the Company Makes MoneyVerticalScope Holdings, Inc. generates revenue primarily through digital advertising on its network of online communities and websites. The company monetizes its platforms by offering advertising solutions to brands and marketers looking to reach specific, engaged audiences. Key revenue streams include display advertising, sponsored content, and partnerships with advertisers seeking to leverage VerticalScope's extensive user base. Additionally, VerticalScope may earn income from subscription services or premium content offerings, although its primary focus remains on advertising revenue. Strategic partnerships with content creators and brands enhance its ability to attract and retain advertisers, contributing significantly to its earnings.
VerticalScope Holdings, Inc. Financial Statement Overview
Summary
VerticalScope Holdings, Inc. shows improvement in revenue and operational cash flow, reflecting an upward trend in financial performance. Despite these advancements, consistent net losses and high leverage pose risks to long-term profitability and financial stability. Improvements in EBITDA margins and cash flow are promising, but ongoing challenges with debt management and profitability need addressing for sustainable growth.Income Statement
The company shows a mixed performance with revenue growth evident in the last year, increasing from $60.9M in 2023 to $69.0M in 2024. However, the net income remains negative, with a reduced net loss from -$4.95M in 2023 to -$15.8K in 2024. The gross profit margin is strong at 100%, but consistent negative net profit margins indicate profitability issues. EBIT and EBITDA margins improved in 2024, showing better operational efficiency.55
Neutral
Balance Sheet
The company exhibits a relatively high debt-to-equity ratio, considering its total debt of $40.8M against a stockholders' equity of $82.7M as of 2024. The equity ratio shows improvement at around 62.5% in 2024, indicating a moderate level of financial stability. However, the negative equity in previous years and fluctuating debt levels suggest financial leverage risks.45
Neutral
Cash Flow
The cash flow statement presents a positive trajectory with free cash flow improving significantly to $22.6M in 2024 from $13.2M in 2023. The operating cash flow to net income ratio is robust, reflecting strong cash generation relative to earnings, despite the net losses. The free cash flow growth rate is notable, indicating efficient cash management and operational improvements.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 69.05M | 60.90M | 80.49M | 65.76M | 56.92M |
| Gross Profit | ||||
| 69.05M | 34.22M | 45.67M | 38.95M | 35.46M |
| EBIT | ||||
| 7.32M | -2.99M | -20.29M | -6.76M | 3.58M |
| EBITDA | ||||
| 23.68M | 18.55M | 14.71M | 440.34K | 8.54M |
| Net Income Common Stockholders | ||||
| -15.86K | -4.95M | -24.77M | -12.26M | -1.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 5.19M | 6.02M | 8.77M | 20.49M | 4.60M |
| Total Assets | ||||
| 132.41M | 152.95M | 177.56M | 217.03M | 87.68M |
| Total Debt | ||||
| 40.82M | 61.52M | 61.64M | 84.06M | 104.70M |
| Net Debt | ||||
| 35.63M | 55.51M | 52.87M | 63.56M | 100.10M |
| Total Liabilities | ||||
| 49.72M | 72.27M | 96.06M | 120.79M | 110.23M |
| Stockholders Equity | ||||
| 82.69M | 80.69M | 81.50M | 96.24M | -22.54M |
| Cash Flow | Free Cash Flow | |||
| 22.61M | 13.25M | 10.92M | -4.09M | 9.39M |
| Operating Cash Flow | ||||
| 24.77M | 15.51M | 20.64M | 19.60M | 14.10M |
| Investing Cash Flow | ||||
| -2.13M | -17.07M | -9.66M | -87.76M | -3.45M |
| Financing Cash Flow | ||||
| -23.38M | -1.13M | -22.47M | 84.40M | -11.19M |
VerticalScope Holdings, Inc. Technical Analysis
Negative
8.82
Price Trends
11.50
Negative
10.78
Negative
9.67
Negative
Market Momentum
-0.82
Positive
26.73
Positive
8.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FORA, the sentiment is Negative. The current price of 8.82 is below the 20-day moving average (MA) of 9.64, below the 50-day MA of 11.50, and below the 200-day MA of 9.67, indicating a bearish trend. The MACD of -0.82 indicates Positive momentum. The RSI at 26.73 is Positive, neither overbought nor oversold. The STOCH value of 8.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FORA.
VerticalScope Holdings, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | C$610.36M | ― | -6.14% | 3.47% | 9.94% | -147.16% | |
60 Neutral | C$211.97M | ― | -2.60% | ― | -2.76% | 77.19% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% | |
51 Neutral | C$186.73M | 62.54 | -0.02% | ― | 15.19% | 99.55% | |
45 Neutral | C$21.00M | ― | -119.27% | ― | 1.15% | 25.39% |
* Communication Services Sector Average
Performance Comparison
TSE:FORA
VerticalScope Holdings, Inc.
8.60
1.61
23.03%
TSE:STC
Sangoma Technologies
6.11
-0.44
-6.72%
TSE:RAY.A
Stingray Digit SV
8.64
1.02
13.39%
TSE:TGO
TeraGo Inc.
0.98
-0.54
-35.53%
VerticalScope Holdings, Inc. Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -19.08% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue and MAU growth, impressive programmatic advertising gains, and a strengthened financial position. However, there were challenges in e-commerce revenue, a slight decline in adjusted EBITDA margin, and no new LLM deals were signed. The positive aspects, particularly in advertising growth and financial health, outweigh the negatives.Highlights
Revenue and MAU Growth
Revenue grew by 15%, and MAUs reached a record 122 million, up 21% over last year.
Programmatic Advertising Growth
Programmatic advertising increased by 36% and now constitutes 71% of the advertising revenue.
Strengthened Financial Position
Debt reduced to less than $40 million, with a leverage ratio of 1.3x. Free cash flow increased by 7% to $6.4 million.
Expanding M&A Pipeline
The company is close to making a second tuck-in acquisition, with an improving deal-making environment anticipated for 2025.
Positive Momentum in Advertising
Advertising revenue was $15.6 million, up 22%, with strong programmatic performance and improving direct advertising trends.
Lowlights
Flat E-commerce Revenue
E-commerce revenue was flat compared to Q2 and down 20% year-over-year, representing only 12% of total revenue.
Decline in Adjusted EBITDA Margin
Adjusted EBITDA margin declined from 44% to 42%, due to higher performance-based incentives and technology investments.
No New LLM Deals
The company did not sign any LLM deals in the quarter, with the process expected to continue into 2025.
Company Guidance
In the third quarter of 2024, VerticalScope Holdings reported a 15% growth in revenue, driven by a significant 36% increase in programmatic advertising, which now accounts for 71% of their ad revenue. The company served a record 122 million monthly active users (MAUs), up 21% from the previous year. Adjusted EBITDA rose by 9% to $7.4 million, while free cash flow increased by 7% to $6.4 million, with a conversion rate of 86%. The digital advertising sector grew by 22%, with direct advertising showing momentum for Q4. VerticalScope's debt was reduced to less than $40 million, reflecting a 1.3x leverage, and they have secured a new credit facility for future acquisitions. The company is optimistic about sustained MAU growth and is exploring new technologies, including AI and blockchain, to enhance user engagement and authenticity. Looking ahead, they expect double-digit revenue growth in the advertising segment for Q4 and continued M&A activity to drive growth in 2025.VerticalScope Holdings, Inc. Corporate Events
Business Operations and StrategyFinancial Disclosures
VerticalScope Reports Strong Q4 2024 Financial Results Amidst Strategic Growth
Positive
Mar 12, 2025
VerticalScope Holdings Inc. reported strong financial results for Q4 2024, with revenue increasing by 11% to $19.9 million, and Adjusted EBITDA rising by 22% to $10.1 million. The company achieved a record 114 million monthly active users, reflecting a 6% year-over-year growth. Despite a net loss due to increased share-based compensation and interest expenses, VerticalScope’s robust financial performance was driven by significant growth in digital advertising and strategic acquisitions, positioning it for future expansion.
Business Operations and StrategyFinancial Disclosures
VerticalScope to Release Q4 and Full Year 2024 Financial Results in March
Neutral
Feb 10, 2025
VerticalScope Holdings Inc. is set to release its fourth quarter and full year 2024 financial results on March 12, 2025, after the market closes. The company will discuss these results in a conference call and webcast scheduled for March 13, 2025. This announcement could have implications for the company’s market position and stakeholder interests, reflecting its ongoing performance and strategic direction within the digital platform industry.
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.