VerticalScope Holdings (FORA) AI Stock Analysis

• Market Cap: C$85.52M
• Dividend Yield: N/A
• Average Volume (3M): 20.44K
• Price to Earnings (P/E): 62.5
• Beta (1Y): 0.74
• Revenue Growth: 11.40%
• EPS Growth: -13.80%
• Country: CA
• Employees: 191
• Sector: Communication Services
• Sector Strength: 82
• Industry: Internet Content & Information
• EPS (TTM): -0.15
• Shares Outstanding: 18,529,820
• 10 Day Avg. Volume: 15,519
• 30 Day Avg. Volume: 20,443
• PEG Ratio: <0.01
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.34
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 0.37
• Enterprise Value/Gross Profit: 2.14
• Enterprise Value/Ebitda: 1.19
• 1Y Price Target: C$6.17
• Price Target Upside: 55.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 55 Neutral
• Price Target: C$4.50 ▲(13.07%Upside)

The overall stock score reflects a balance of positive operational efficiency and strong cash flow against challenges in profitability and revenue volatility. Technical indicators suggest potential but are clouded by a bearish trend. Positive corporate events and strategic leadership changes offer a potential path for future growth, although significant risks remain.

Positive Factors

Capital Management

Management's decision to maintain a conservative leverage ratio and engage in share buybacks indicates a focus on financial stability and shareholder value.

Mergers and Acquisitions

The company has increased M&A activity, acquiring $5.5M in community sites and Ritual Technologies for $2.6M, potentially enhancing growth prospects.

Negative Factors

Digital Advertising

A decline in digital advertising revenue, exacerbated by lower Monthly Active Users and Google's algorithm changes, poses challenges for future earnings.

Market Conditions

The downward revision of the target price from C$10 to C$6 reflects ongoing traffic challenges and anticipated topline declines in the near term.

Revenue Performance

Q1 results did not meet expectations for revenue and profitability, which may affect investor confidence.

VerticalScope Holdings Business Overview & Revenue Model

Company Description

VerticalScope Holdings Inc., a technology company, operates a cloud-based digital community platform in Canada. It provides digital advertising services, including direct advertising campaigns, custom content solutions, and programmatic advertising; and e-commerce solutions. The company also focus on hyper-specific subjects that engender strong affinity from online communities of enthusiasts, super fans, experts, pros, hobbyists, and armchair analysts. Its brands include communities for watch geeks, audio nerds, motorheads, fitness-obsessed, mountain bikers, DIYers, deal junkies, and enthusiasts. The company serves approximately 106 million monthly active users and 56 million registered community members in approximately one thousand and two hundred online communities. VerticalScope Holdings Inc. was founded in 1999 and is headquartered in Toronto, Canada.

How the Company Makes Money

VerticalScope Holdings generates revenue primarily through digital advertising and subscription services. The company monetizes its extensive network of online communities by offering targeted advertising solutions to businesses aiming to reach specific audience segments. Additionally, VerticalScope offers premium membership options for users seeking enhanced features and an ad-free experience on their platforms. The company's revenue model is further supported by strategic partnerships with advertisers and technology providers, enhancing its ability to deliver personalized and effective marketing solutions.

VerticalScope Holdings Financial Statement Overview

Summary

VerticalScope Holdings shows strong cost management and operational efficiency with improving EBIT and EBITDA margins. However, negative net income and revenue volatility are concerning. The balance sheet is stable with a solid equity ratio, though high leverage poses a risk. Cash flow generation is strong, with efficient cash management despite some volatility.

Income Statement

The income statement shows a mixed performance. Gross profit margin is solid at approximately 68.8% TTM, reflecting efficient cost management. However, the net profit margin is negative due to consistent net losses, indicating profitability challenges. Revenue growth is volatile, with a recent decline of 1.7% TTM compared to the previous year, after a prior increase of 13.4% from 2022 to 2023. EBIT and EBITDA margins have improved to 7.8% and 31.4% TTM, respectively, suggesting better operational efficiency.

Balance Sheet

The balance sheet reveals a stable equity position with an equity ratio of 62.3% TTM, indicating good financial stability. However, the debt-to-equity ratio is relatively high at 0.53 TTM, suggesting leverage is a potential risk. Return on equity is negative due to net losses, highlighting profitability issues. Overall, the company maintains a robust asset base, although liabilities remain significant.

Cash Flow

The cash flow statement indicates a strong free cash flow position with a growth rate of 8.5% TTM, reflecting solid cash generation. The operating cash flow to net income ratio is favorable at -15.2, demonstrating efficient cash operations despite net losses. The free cash flow to net income ratio is also robust, showing positive cash flow management. However, fluctuations in investing and financing cash flows suggest potential volatility in cash management strategies.

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	40.96M	34.22M	45.67M	38.95M	35.46M
EBITDA	23.68M	18.55M	14.71M	440.34K	8.54M
Net Income	-15.86K	-4.95M	-24.77M	-12.26M	-1.51M
Balance Sheet
Total Assets	132.41M	152.95M	177.56M	217.03M	87.68M
Cash, Cash Equivalents and Short-Term Investments	5.19M	6.02M	8.77M	20.49M	4.60M
Total Debt	40.82M	61.52M	61.64M	84.06M	104.70M
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 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 3.98 is below the 20-day moving average (MA) of 4.05, below the 50-day MA of 4.09, and below the 200-day MA of 8.01, indicating a bearish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 45.30 is Neutral, neither overbought nor oversold. The STOCH value of 50.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FORA.

VerticalScope Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$42.18B	-1.51	-12.07%	2.79%	2.09%	-71.01%
FORA	55 Neutral	C$85.52M	62.54	-1.93%	―	11.40%	-13.80%
PNC.A	―	C$144.13M	―		―	―	―
EGLXF	―	$14.58M	―	-105.94%	―	―	―
ZMDTF	―	$104.11M	8.08	82.67%	―	―	―
OAM	57 Neutral	C$39.20M	344.44	0.17%	―	59.77%	―
MIM	―	C$76.58M	―		―	―	―

VerticalScope Holdings Corporate Events

VerticalScope Announces Shareholder Meeting Results

VerticalScope Holdings Inc. announced the results of its annual general meeting of shareholders, where all five nominees were elected as directors, and MNP LLP was reappointed as the company’s auditor. The voting results reflect strong shareholder support for the current leadership and operational strategies, which may positively impact the company’s stability and future growth.

The most recent analyst rating on (TSE:FORA) stock is a Buy with a C$14.50 price target. To see the full list of analyst forecasts on VerticalScope Holdings stock, see the TSE:FORA Stock Forecast page.

VerticalScope Announces AGM Voting Results and Auditor Reappointment

VerticalScope Holdings Inc. announced the results of its annual general meeting of shareholders, where five directors were elected, and MNP LLP was reappointed as the company’s auditors. These decisions reflect the company’s ongoing commitment to maintaining strong governance and financial oversight, which are crucial for its continued growth and stability in the digital platform industry.

The most recent analyst rating on (TSE:FORA) stock is a Buy with a C$14.50 price target. To see the full list of analyst forecasts on VerticalScope Holdings stock, see the TSE:FORA Stock Forecast page.

VerticalScope Announces Leadership Changes to Propel Growth

VerticalScope Holdings Inc., a technology company known for its cloud-based digital platform for online enthusiast communities, has announced a strategic leadership transition to drive its next phase of growth. Chris Goodridge has been appointed as the new CEO, succeeding founder Rob Laidlaw, who will remain as Chair of the Board. Ezra Menaged, previously CEO of Hometalk, has been promoted to COO. These appointments aim to strengthen VerticalScope’s leadership as generative AI reshapes content engagement, with a focus on accelerating AI adoption, expanding direct traffic, and diversifying revenue. The company is well-positioned with its rich user-generated content and aims to enhance its community-driven platforms.

The most recent analyst rating on (TSE:FORA) stock is a Buy with a C$14.50 price target. To see the full list of analyst forecasts on VerticalScope Holdings stock, see the TSE:FORA Stock Forecast page.

VerticalScope Reports Q1 2025 Financial Results Amidst Challenges

VerticalScope Holdings Inc. reported an 8% decrease in revenue for the first quarter of 2025, attributed to challenges such as a softer macro environment, lower video advertising rates, and changes to Google’s search algorithm. Despite these setbacks, the company remains optimistic about its business model and long-term opportunities, as it adapts to evolving search experiences with AI-driven enhancements. The company also reported a 30% drop in adjusted EBITDA and a net loss increase to $2.4 million. However, VerticalScope generated strong cash flow and continued its strategic growth through acquisitions, adding 23 online communities to its platform. The company is focused on disciplined capital allocation to drive long-term shareholder value.

The most recent analyst rating on (TSE:FORA) stock is a Buy with a C$14.50 price target. To see the full list of analyst forecasts on VerticalScope Holdings stock, see the TSE:FORA Stock Forecast page.