Sangoma Technologies (TSE:STC)
TSX:STC
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Sangoma Technologies
(TSX:STC)
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Rating:54Neutral
Price Target:
C$5.00
▼(-27.95% Downside)
Action:Reiterated
Date:05/15/26
The score is held back primarily by weak technicals (downtrend across moving averages with negative MACD) and ongoing profitability/revenue pressure in TTM results. Offsetting these, financial risk appears moderate-to-low due to positive free cash flow and improving leverage, and the latest call showed strong cash conversion and infrastructure growth—though tempered by a revenue guidance cut and limited near-term visibility.
Positive Factors
Strong cash generation & conversion
Consistent positive operating cash flow and high EBITDA-to-cash conversion provide durable internal funding for operations, R&D and strategic reallocations. Strong cash generation cushions the business through cyclical revenue dips and supports deleveraging, buybacks and targeted investments in growth areas.
Negative Factors
Commoditized applications/UCaaS pressure
A large portion of revenue comes from commoditized UCaaS and application services facing persistent price pressure, eroding monetization and limiting margin upside. Structural commoditization reduces pricing power and makes sustainable revenue growth dependent on successful migration to higher-value infrastructure solutions.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation & conversion
Consistent positive operating cash flow and high EBITDA-to-cash conversion provide durable internal funding for operations, R&D and strategic reallocations. Strong cash generation cushions the business through cyclical revenue dips and supports deleveraging, buybacks and targeted investments in growth areas.
Read all positive factors
Sangoma Technologies (STC) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$166.39M
Dividend YieldN/A
Average Volume (3M)36.66K
Price to Earnings (P/E)―
Beta (1Y)1.00
Revenue Growth-11.32%
EPS Growth6.86%
CountryCA
Employees671
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.19
Shares Outstanding33,278,790
10 Day Avg. Volume51,941
30 Day Avg. Volume36,660
Financial Highlights & Ratios
PEG Ratio1.33
Price to Book (P/B)1.11
Price to Sales (P/S)1.19
P/FCF Ratio8.58
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$7.52Price Target Upside8.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)-0.26
Revenue Forecast (FY)C$204.48M
Sangoma Technologies Business Overview & Revenue Model
Company Description
Sangoma Technologies Corporation specializes in developing, producing, distributing, and supporting a comprehensive range of voice and data connectivity solutions for software-driven communication applications globally. The company's diverse produ...
How the Company Makes Money
Sangoma makes money primarily by selling communications software and services to business customers through a mix of recurring subscriptions and product/licensing revenue. Key revenue streams include: (1) recurring subscription and service revenue...
Sangoma Technologies Earnings Call Summary
Earnings Call Date:May 13, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Sep 30, 2026
Earnings Call Sentiment Neutral
The call presented a balanced mix of positive operational and financial fundamentals and notable near-term challenges. Positives include mid-to-high‑teens infrastructure growth, strong cash generation and conversion (80% quarterly / 87% YTD), deleveraging and active capital returns. Negatives include a downward revenue guidance revision, continued commoditization and pricing pressure in the application/UCaaS portfolio, international supply-chain and geopolitical disruptions that reduced non-U.S. revenue and led to gross margin compression, and timing/lumpiness in recognizing revenue from large integrated deals. Management is reallocating investments toward higher-growth infrastructure and AI capabilities and has initiated a Board-led strategic review to unlock value, but short-term visibility remains constrained by deployment timing and macro uncertainties.Positive Updates
Infrastructure-led Growth (Data & Voice)
Data networking revenue grew ~9% year-over-year and voice networking/infrastructure grew in the high-teens (management cited ~17% and ~19% YoY in different remarks). Management emphasized infrastructure as the primary growth engine as AI-driven agent and machine traffic increases demand for trusted communications layers.
Negative Updates
Revenue Guidance Trim and Shortfall Risk
Management updated full fiscal 2026 revenue guidance downward to $204 million–$205 million, citing geopolitical/trade disruptions and pricing/monetization pressures across parts of the software/UCaaS portfolio. Consolidated Q3 revenue was $51 million.
Read all updates
Q3-2026 Updates
Positive
Negative
Infrastructure-led Growth (Data & Voice)
Data networking revenue grew ~9% year-over-year and voice networking/infrastructure grew in the high-teens (management cited ~17% and ~19% YoY in different remarks). Management emphasized infrastructure as the primary growth engine as AI-driven agent and machine traffic increases demand for trusted communications layers.
Read all positive updates
Company Guidance
Sangoma updated fiscal '26 guidance to $204–205 million of revenue with adjusted EBITDA margin of 15–16%; for Q3 the company reported $51.0M of revenue, $7.5M of adjusted EBITDA (15% of revenue) and a 71% gross margin (down from 74% in Q2). Operationally, Q3 generated $6.0M of net cash from operations (an ~80% conversion of adjusted EBITDA; 87% YTD), free cash flow of $3.6M ($0.11 per diluted share), quarter-end cash of $15.2M and total debt of $32.5M after ~$15.5M of term debt repaid in the first nine months; the company repurchased ~196k shares in Q3 (~271k YTD). Revenue mix remains ~60% applications (low single‑digit decline YTD), ~30% data and voice networking (mid‑teens growth: data ~9% YoY, voice/advanced SIP ~17–19% YoY), MSP ~9% YoY, churn improved to ~0.79%, and management noted international revenue headwinds (down ≈$0.3M Q/Q, $0.66M YoY). The board has launched a structured strategic review while the company reallocates investments (about $2M annualized savings reallocated) toward infrastructure and AI-enabled growth; large integrated deals are typically 3–5 years and deploy over ~6–8 months, which affects near‑term revenue timing.Sangoma Technologies Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
68
Positive
Cash Flow
73
Positive
| Breakdown | TTM | Jun 2025 | Jun 2023 | Jun 2022 | Jun 2021 | Sep 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 219.84M | 236.69M | 247.28M | 224.35M | 167.34M | 131.42M |
| Gross Profit | 145.41M | 161.75M | 172.82M | 156.89M | 96.05M | 72.39M |
| EBITDA | 38.13M | 42.95M | 42.29M | -77.43M | 29.77M | 20.12M |
| Net Income | -8.05M | -5.01M | -8.66M | -110.78M | 227.51K | 2.11M |
Balance Sheet | ||||||
| Total Assets | 317.65M | 346.55M | 400.64M | 498.53M | 540.12M | 128.67M |
| Cash, Cash Equivalents and Short-Term Investments | 15.21M | 13.49M | 16.23M | 12.70M | 22.09M | 19.95M |
| Total Debt | 39.74M | 56.11M | 89.11M | 122.61M | 89.17M | 49.14M |
| Total Liabilities | 69.07M | 92.35M | 140.91M | 204.72M | 164.12M | 73.91M |
| Stockholders Equity | 248.58M | 254.19M | 259.73M | 293.81M | 375.99M | 74.78M |
Cash Flow | ||||||
| Free Cash Flow | 32.59M | 32.95M | 33.33M | 15.95M | 12.87M | 6.82M |
| Operating Cash Flow | 39.83M | 41.79M | 44.25M | 21.06M | 15.70M | 8.72M |
| Investing Cash Flow | -8.72M | -8.84M | -10.91M | -55.82M | -109.89M | -30.67M |
| Financing Cash Flow | -30.95M | -35.68M | -28.26M | 25.37M | 96.41M | 33.08M |
Sangoma Technologies Technical Analysis
Negative
6.94
Price Trends
5.45
Negative
5.89
Negative
6.58
Negative
Market Momentum
-0.16
Negative
38.95
Neutral
15.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:STC, the sentiment is Negative. The current price of 6.94 is above the 20-day moving average (MA) of 5.17, above the 50-day MA of 5.45, and above the 200-day MA of 6.58, indicating a bearish trend. The MACD of -0.16 indicates Negative momentum. The RSI at 38.95 is Neutral, neither overbought nor oversold. The STOCH value of 15.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:STC.
Sangoma Technologies Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | C$24.36M | 13.44 | ― | ― | ― | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | C$161.41M | 159.41 | 1.08% | ― | 17.53% | -52.23% | |
54 Neutral | C$166.39M | -14.76 | -3.18% | ― | -11.32% | 6.86% | |
46 Neutral | C$265.66M | -27.63 | -26.68% | ― | -23.84% | 35.00% | |
45 Neutral | C$56.44M | -11.37 | 247.94% | ― | -43.68% | -329.28% | |
44 Neutral | C$158.59M | -6.73 | -9.67% | 1.80% | -12.23% | 84.72% |
* Technology Sector Average
TSE:STC
Sangoma Technologies
4.90
-3.10
-38.75%
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3.79
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Dye & Durham
2.28
-7.90
-77.60%
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Haivision Systems
5.88
1.10
23.01%
TSE:EONX
Eonx Technologies
0.61
0.36
144.00%
TSE:ICS
Integrated Cyber Solutions, Inc.
0.65
0.41
170.83%
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.