VerticalScope Holdings (FORA) AI Stock Analysis

• Market Cap: C$89.46M
• Dividend Yield: N/A
• Average Volume (3M): 106.56K
• Price to Earnings (P/E): 62.5
• Beta (1Y): 0.89
• Revenue Growth: 11.40%
• EPS Growth: -13.80%
• Country: CA
• Employees: 191
• Sector: Communication Services
• Sector Strength: 86
• Industry: Internet Content & Information
• EPS (TTM): -0.15
• Shares Outstanding: 18,755,335
• 10 Day Avg. Volume: 54,791
• 30 Day Avg. Volume: 106,562
• PEG Ratio: 92.23
• Price to Book (P/B): 1.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.42
• 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: C$9.14
• Price Target Upside: 124.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 51 Neutral
• Price Target: C$4.00 ▼( -1.72% Downside)

VerticalScope Holdings, Inc. scores a 51, indicating moderate performance with notable challenges. The company's strengths in revenue and cash flow improvements are overshadowed by persistent profitability issues and high leverage. Bearish technical indicators and a negative P/E ratio add to market skepticism. While corporate events provide some optimism, addressing financial stability and enhancing profitability are crucial for improving the stock's attractiveness.

Positive Factors

Shareholder Returns

Management indicated it remains open to tuck-in M&A opportunities and will continue to return capital to shareholders via share buybacks.

Strategic Initiatives

The company has turned up M&A activity with $5.5M in acquisitions in Q1, comprising 23 community sites, and acquired Ritual Technologies for $2.6M in early Q2.

Valuation

FORA trades at a notably cheaper valuation than its peers, with a high free cash flow yield that could serve to re-rate the stock strongly if the outlook stabilizes.

Negative Factors

Financial Performance

Adjusted EBITDA came in at $3.6M, falling short of the $4.5M estimate, mainly due to higher compensation and consulting costs.

Revenue Challenges

Revenues came in at $13.6M, down 7.9% year-over-year, below the $14.0M estimate, due to a decline in MAUs.

Search Algorithm Impact

Google’s search algorithm update in March hurt organic traffic to Fora communities, which led to a 7.8% year-over-year decline in Monthly Active Users (MAUs) to 103.9M.

VerticalScope Holdings Business Overview & Revenue Model

Company Description

VerticalScope Holdings, Inc. is a prominent Canadian digital media company that specializes in managing and operating online communities and forums. The company focuses on niche markets and enthusiast segments, offering an extensive network of websites that cater to various interests including automotive, powersports, outdoor, home, and health sectors. VerticalScope leverages its expertise in community management to provide users with rich content, tailored experiences, and robust platforms for discussion and information sharing.

How the Company Makes Money

VerticalScope Holdings, Inc. primarily generates revenue through digital advertising and subscription services. The company monetizes its vast network of online communities by offering targeted advertising solutions to businesses seeking to reach specific enthusiast audiences. This includes display ads, sponsored content, and programmatic advertising. In addition to advertising, VerticalScope offers premium membership subscriptions for users seeking enhanced features and an ad-free experience on its platforms. The company's revenue model is further supported by strategic partnerships and collaborations with various brands and advertisers that align with the interests of its niche audience segments.

VerticalScope Holdings 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.

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.

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.

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 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 4.07 is below the 20-day moving average (MA) of 4.63, below the 50-day MA of 6.48, and below the 200-day MA of 9.05, indicating a bearish trend. The MACD of -0.60 indicates Negative momentum. The RSI at 35.14 is Neutral, neither overbought nor oversold. The STOCH value of 13.84 is Positive, 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
ZOMD	78 Outperform	$82.31M	6.69	82.67%	―	105.03%	―
Sector *	60 Neutral	$14.21B	6.47	-3.76%	3.69%	2.48%	-35.46%
FORA	51 Neutral	C$89.46M	62.54	-1.93%	―	11.40%	-13.80%
OAM	51 Neutral	C$35.25M	―	-1.45%	―	71.98%	87.24%
EGLX	45 Neutral	$10.35M	―	-105.94%	―	-61.29%	12.95%

VerticalScope Holdings Corporate Events

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.

VerticalScope to Release Q1 2025 Financial Results

VerticalScope Holdings Inc. announced that it will release its first quarter 2025 financial results on May 13, 2025, after market close. The company will also host a conference call and webcast on May 14, 2025, to discuss these results. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic direction, potentially impacting its market positioning and investor confidence.

VerticalScope CEO Increases Stake with $1M Share Purchase

VerticalScope Holdings Inc. announced that its Founder, Chair, and CEO, Rob Laidlaw, has increased his investment in the company by purchasing an additional 205,649 subordinate voting shares for approximately CAD $1 million. This move reflects Laidlaw’s confidence in the company’s resilience and long-term strategy, despite current economic uncertainties. The acquisition further solidifies his control over the company, with Laidlaw and his family owning 100% of the multiple voting shares and approximately 3.2% of the subordinate voting shares.

VerticalScope Revises 2025 Outlook Amid Market Challenges

VerticalScope Holdings Inc. has issued a business update reflecting some challenges in early 2025, including decreased video advertising revenue due to changes in ad classification and a decline in monthly active users following Google’s algorithm update. Despite these headwinds, the company remains optimistic about its long-term strategy, with plans to invest in AI-driven product development and continue its acquisition strategy. VerticalScope anticipates an adjusted EBITDA of $21-24 million for 2025 and maintains a strong balance sheet with low leverage, positioning itself well for future growth.

VerticalScope Reports Strong Q4 2024 Financial Results Amidst Strategic Growth

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.