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NTG Clarity Networks Inc (TSE:NCI)
:NCI
Canadian Market

NTG Clarity Networks (NCI) AI Stock Analysis

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NTG Clarity Networks

(NCI)

Rating:81Outperform
Price Target:
C$3.00
▲(31.58%Upside)
NTG Clarity Networks scores highly due to strong technical indicators and positive corporate events which reinforce its growth trajectory. Financial performance is solid but offset by high leverage. The valuation remains attractive, suggesting potential for appreciation.
Positive Factors
Customer Retention
High customer satisfaction is evident with a 90% customer retention rate and 54% of clients returning with larger service contracts.
Financial Performance
NTG Clarity Networks reported a strong 68% topline growth and a significant revenue beat.
Market Expansion
NTG Clarity Networks sees significant growth potential in the Saudi market due to its deep relationships in the region and growing profile.
Negative Factors
Operating Expenses
The company's adjusted EBITDA was lower than expected due to increased selling, marketing, and general expenses.
Target Price Adjustment
The target price was slightly reduced due to the timing of corporate taxes and working capital movements.

NTG Clarity Networks (NCI) vs. iShares MSCI Canada ETF (EWC)

NTG Clarity Networks Business Overview & Revenue Model

Company DescriptionNTG Clarity Networks (NCI) is a global provider of telecommunications engineering, information technology, networking, and related software solutions. The company serves various sectors, including telecommunications, utilities, and government, offering a range of products and services designed to improve network efficiency and reduce operational costs. NTG Clarity Networks specializes in providing innovative solutions for network management, software development, and systems integration to help clients achieve their digital transformation goals.
How the Company Makes MoneyNTG Clarity Networks makes money through a diversified revenue model that includes the sale of proprietary software solutions, professional services, and managed services. The company's key revenue streams come from licensing its software products, which are designed to optimize network operations and enhance service delivery for telecommunications providers. Additionally, NTG Clarity Networks generates income by offering consulting and implementation services to assist clients in deploying and managing complex network systems. Managed services and support contracts also provide a steady source of recurring revenue. Significant partnerships with major telecom operators and technology providers further contribute to the company's earnings by expanding its market reach and facilitating joint solution development.

NTG Clarity Networks Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q3-2024)
|
% Change Since: -17.09%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The call highlights significant financial growth and strategic achievements, including record revenue and net income, while acknowledging increased operating expenses and receivables due to expansion efforts. The overall sentiment is optimistic, driven by strong market positioning and future growth prospects in Saudi Arabia.
Q3-2024 Updates
Positive Updates
Record Revenue Growth
Q3 2024 marked the eighth consecutive quarter of record-setting revenue, with top-line revenue up 109% year-over-year to $14.7 million. Year-to-date revenue increased 100% to $38.9 million.
Significant Net Income Increase
Net income for Q3 rose 303% to $2.1 million, and year-to-date net income increased 272% to $6.9 million.
Largest Contract Win
Secured a $53 million 3-year contract, contributing to a total backlog of $83.5 million as of September 30, 2024.
Improved Financial Metrics
Adjusted EBITDA for Q3 increased 140% to $3.2 million, with an adjusted EBITDA margin of 22%, up from 19% the previous year.
Strong Cash Position
Ended Q3 with $5.4 million in cash, the highest in the company's history, due to positive operational cash flow and a successful LIFE Offering.
Negative Updates
Increase in Operating Expenses
Operating expenses rose to 18% of revenue due to investments in new office space, employee hiring, and training to support growth.
Receivables Increase
Receivables increased by 150% due to rapid top-line growth, although the company reported strong collections post-Q3.
Company Guidance
During the third quarter 2024 earnings call for NTG Clarity Networks Inc., several key financial metrics and guidance updates were highlighted. The company reported its eighth consecutive quarter of record-setting revenue, with a 109% increase to $14.7 million compared to the previous year, and a year-to-date revenue increase of 100% to $38.9 million. Net income also reached new heights, rising 303% to $2.1 million for the quarter and 272% year-to-date to $6.9 million. Additionally, NTG Clarity introduced adjusted EBITDA as a new metric, which grew by 140% to $3.2 million, resulting in a 22% adjusted EBITDA margin. A major highlight was a $53 million, three-year contract, contributing to a backlog of $83.5 million in work on hand. The company reaffirmed its full-year guidance of $55 million in revenue and a 14% net income margin for 2024, reflecting a recent increase from previous estimates. Despite the impressive growth, NTG Clarity emphasized continued investments in staffing and infrastructure to sustain its trajectory, particularly in the fast-growing Saudi Arabian market where 97% of its revenue is concentrated.

NTG Clarity Networks Financial Statement Overview

Summary
NTG Clarity Networks exhibits strong financial performance with significant revenue and profit growth, robust margins, and improved equity position. However, a high debt-to-equity ratio remains a concern that needs addressing for long-term stability.
Income Statement
85
Very Positive
NTG Clarity Networks has demonstrated significant revenue growth, with a strong gross profit margin of 37.1% and an impressive net profit margin of 17.5% in the latest annual report. The EBIT and EBITDA margins are also robust at 22.0% and 21.5%, respectively, indicating strong operational efficiency. Consistent revenue and profit growth over the years suggest a successful growth trajectory.
Balance Sheet
60
Neutral
The balance sheet shows improvement with positive stockholders' equity for the first time in recent years, reflecting better financial health. However, the debt-to-equity ratio remains high at 0.54, indicating reliance on debt. The equity ratio stands at 44.5%, suggesting moderate financial stability. While progress is evident, the company still faces potential risks due to leverage.
Cash Flow
70
Positive
Cash flow analysis reveals a positive free cash flow growth rate and a healthy operating cash flow to net income ratio of 2.6. The company has managed to improve its free cash flow position, enhancing liquidity. However, the free cash flow to net income ratio suggests room for improvement in translating profits into cash flow.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
56.13M27.73M17.65M11.90M7.91M
Gross Profit
20.85M8.80M6.72M6.59M2.23M
EBIT
12.34M2.60M2.25M2.60M-1.16M
EBITDA
12.07M2.67M2.00M1.81M-1.32M
Net Income Common Stockholders
9.81M1.71M1.25M1.37M-1.63M
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.95M358.09K725.02K158.87K145.22K
Total Assets
28.29M12.39M8.17M6.49M3.17M
Total Debt
6.75M8.80M7.96M7.87M8.45M
Net Debt
1.80M8.45M7.23M7.71M8.30M
Total Liabilities
15.69M15.63M14.94M14.41M15.71M
Stockholders Equity
12.60M-3.24M-6.78M-7.92M-12.54M
Cash FlowFree Cash Flow
1.61M1.17M1.06M253.14K952.73K
Operating Cash Flow
2.57M1.86M2.49M1.80M1.83M
Investing Cash Flow
-825.49K-2.50M-1.43M-1.55M-880.31K
Financing Cash Flow
2.84M275.06K-496.65K-239.50K-838.57K

NTG Clarity Networks Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price2.28
Price Trends
50DMA
2.02
Positive
100DMA
1.94
Positive
200DMA
1.66
Positive
Market Momentum
MACD
0.12
Positive
RSI
47.98
Neutral
STOCH
8.26
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NCI, the sentiment is Neutral. The current price of 2.28 is below the 20-day moving average (MA) of 2.47, above the 50-day MA of 2.02, and above the 200-day MA of 1.66, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 47.98 is Neutral, neither overbought nor oversold. The STOCH value of 8.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:NCI.

NTG Clarity Networks Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSNCI
81
Outperform
C$101.32M9.76135.14%92.08%100.09%
TSQIS
70
Outperform
C$64.04M43.505.09%-0.92%-23.37%
TSURL
67
Neutral
C$84.40M94.06-4.32%10.71%
62
Neutral
$11.80B10.31-7.45%2.91%7.43%-7.78%
57
Neutral
C$41.57M-244.21%51.52%50.73%
TSIMP
55
Neutral
C$146.24M39.5859.35%253.50%
53
Neutral
C$102.66M-99.03%29.22%18.54%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:NCI
NTG Clarity Networks
2.28
1.44
171.43%
TSE:IMP
Intermap Technology
2.45
1.95
390.00%
TSE:QIS
Quorum Information Technologies
0.85
0.08
10.39%
TSE:URL
NameSilo Technologies Corp
0.95
0.69
265.38%
TSE:XTRA
Xtract One
0.44
-0.18
-29.03%
TSE:MHUB
Minehub Technologies
0.47
0.22
88.00%

NTG Clarity Networks Corporate Events

Business Operations and StrategyFinancial Disclosures
NTG Clarity Networks Achieves Record Q1 Revenue and Raises 2025 Guidance
Positive
May 28, 2025

NTG Clarity Networks reported a record revenue increase of 68% year-over-year in Q1 2025, driven by significant growth in offshore services and NTGapps. Despite a slight decline in net income due to strategic investments and tax provisions, the company raised its full-year revenue guidance to $78 million, reflecting confidence in continued growth. NTG is leveraging its offshore platform to deepen customer relationships and expand its client base through referrals, aiming to solidify its role in clients’ digital strategies.

The most recent analyst rating on (TSE:NCI) stock is a Buy with a C$3.25 price target. To see the full list of analyst forecasts on NTG Clarity Networks stock, see the TSE:NCI Stock Forecast page.

Financial Disclosures
NTG Clarity Networks to Release Q1 2025 Financial Results
Neutral
May 22, 2025

NTG Clarity Networks Inc. announced it will release its first-quarter financial results for 2025 on May 28, followed by an earnings call on May 29. This announcement is significant for stakeholders as it provides insights into the company’s financial health and operational performance, potentially impacting its market positioning and investor confidence.

The most recent analyst rating on (TSE:NCI) stock is a Buy with a C$3.25 price target. To see the full list of analyst forecasts on NTG Clarity Networks stock, see the TSE:NCI Stock Forecast page.

Business Operations and Strategy
NTG Clarity Secures $12.5 Million in New Contracts and Renewals
Positive
May 14, 2025

NTG Clarity Networks Inc. has announced new purchase orders and contract renewals valued at approximately $12.5 million CAD, indicating strong client retention and expansion capabilities. The company’s strategic focus on referral-driven sales and its NTGapps platform has resulted in significant contract renewals and new work, aligning with its 2025 revenue guidance of $75 million, and showcasing its growing influence in digital transformation services.

The most recent analyst rating on (TSE:NCI) stock is a Buy with a C$3.25 price target. To see the full list of analyst forecasts on NTG Clarity Networks stock, see the TSE:NCI Stock Forecast page.

Business Operations and Strategy
NTG Clarity Secures $11.1 Million in New Software Development Orders
Positive
Apr 30, 2025

NTG Clarity Networks has announced the receipt of three purchase orders valued at $11.1 million for software development services, marking a significant increase in service levels under a previously announced $22 million agreement. This growth reflects the company’s expanding role in digital transformation projects, particularly in alignment with Saudi Arabia’s Vision 2030, and underscores the increasing demand for NTG’s services, which is driving accelerated growth for both the company and its partners.

Business Operations and StrategyFinancial Disclosures
NTG Clarity Networks Achieves Record 2024 Financial Results, Eyes Continued Growth in 2025
Positive
Apr 15, 2025

NTG Clarity Networks Inc. reported record financial results for 2024, with revenue doubling to $56.1 million and net income increasing by 326% to $9.9 million. The company’s strong performance was driven by high customer retention, expanded services, and a growing customer base, supported by strategic investments and favorable market conditions. Looking ahead, NTG Clarity plans to continue its growth trajectory in 2025, with expected revenue of $75 million and a focus on strategic investments to support long-term growth.

Financial Disclosures
NTG Clarity Networks to Release 2024 Financial Results
Neutral
Apr 9, 2025

NTG Clarity Networks Inc. announced it will release its fourth quarter and year-end financial results for 2024 on April 15, 2025, followed by an earnings call on April 16. This announcement is significant for stakeholders as it provides insights into the company’s financial health and operational performance, potentially impacting its market positioning and investor confidence.

Business Operations and StrategyFinancial Disclosures
NTG Clarity Networks Projects Strong Growth for 2025
Positive
Mar 26, 2025

NTG Clarity Networks has announced its 2025 financial guidance, projecting revenues of approximately $75 million and an adjusted EBITDA margin between 16% and 20%. The company attributes its positive outlook to a growing backlog, strong customer demand, and expanded engagements with existing clients. NTG has also shifted its financial reporting metrics to focus on adjusted EBITDA, which better reflects its core business performance by excluding foreign exchange impacts. This strategic move aligns with NTG’s growth strategy, which is gaining traction across key customer segments and benefiting from digital transformation trends.

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.