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VerticalScope Holdings, Inc. (TSE:FORA)
:FORA
Canadian Market
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VerticalScope Holdings (FORA) AI Stock Analysis

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TSE:FORA

VerticalScope Holdings

(TSX:FORA)

Rating:55Neutral
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 (FORA) vs. iShares MSCI Canada ETF (EWC)

VerticalScope Holdings Business Overview & Revenue Model

Company DescriptionVerticalScope 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 MoneyVerticalScope 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 Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q3-2024)
|
% Change Since: -19.60%|
Next Earnings Date:Aug 12, 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.
Q3-2024 Updates
Positive Updates
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.
Negative Updates
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 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
55
Neutral
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
60
Neutral
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
65
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue69.05M60.90M80.49M65.76M56.92M
Gross Profit40.96M34.22M45.67M38.95M35.46M
EBITDA23.68M18.55M14.71M440.34K8.54M
Net Income-15.86K-4.95M-24.77M-12.26M-1.51M
Balance Sheet
Total Assets132.41M152.95M177.56M217.03M87.68M
Cash, Cash Equivalents and Short-Term Investments5.19M6.02M8.77M20.49M4.60M
Total Debt40.82M61.52M61.64M84.06M104.70M
Total Liabilities49.72M72.27M96.06M120.79M110.23M
Stockholders Equity82.69M80.69M81.50M96.24M-22.54M
Cash Flow
Free Cash Flow22.61M13.25M10.92M-4.09M9.39M
Operating Cash Flow24.77M15.51M20.64M19.60M14.10M
Investing Cash Flow-2.13M-17.07M-9.66M-87.76M-3.45M
Financing Cash Flow-23.38M-1.13M-22.47M84.40M-11.19M

VerticalScope Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price3.98
Price Trends
50DMA
4.09
Negative
100DMA
5.71
Negative
200DMA
8.01
Negative
Market Momentum
MACD
-0.06
Negative
RSI
45.30
Neutral
STOCH
50.72
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

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$42.18B-1.51-12.07%2.79%2.09%-71.01%
55
Neutral
C$85.52M62.54-1.93%11.40%-13.80%
C$144.13M
$14.58M-105.94%
$104.11M8.0882.67%
57
Neutral
C$39.20M344.440.17%59.77%
C$76.58M
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:FORA
VerticalScope Holdings
3.98
-4.47
-52.90%
TSE:PNC.A
Postmedia Ntwrk C J
1.52
0.06
4.11%
EGLXF
Enthusiast Gaming Holdings
0.09
-0.01
-10.00%
ZMDTF
Zoomd Technologies
1.04
0.93
845.45%
TSE:OAM
OverActive Media Corp
0.31
0.04
14.81%
TSE:MIM
MiMedia Holdings Inc
0.87
0.65
295.45%

VerticalScope Holdings Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
VerticalScope Announces Shareholder Meeting Results
Positive
Jun 18, 2025

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.

Executive/Board ChangesShareholder Meetings
VerticalScope Announces AGM Voting Results and Auditor Reappointment
Neutral
Jun 18, 2025

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.

Executive/Board ChangesBusiness Operations and Strategy
VerticalScope Announces Leadership Changes to Propel Growth
Positive
Jun 4, 2025

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.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
VerticalScope Reports Q1 2025 Financial Results Amidst Challenges
Negative
May 13, 2025

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.

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: Jul 24, 2025