Sangoma Technologies (STC) AI Stock Analysis

• Market Cap: C$229.99M
• Dividend Yield: N/A
• Average Volume (3M): 36.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.14
• Revenue Growth: -4.34%
• EPS Growth: 31.52%
• Country: CA
• Employees: 671
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.10
• Shares Outstanding: 33,139,164
• 10 Day Avg. Volume: 51,941
• 30 Day Avg. Volume: 36,660
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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$12.00
• Price Target Upside: 72.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: C$7.50 ▲(8.07% Upside)

Sangoma Technologies' overall stock score is driven by a strong earnings call that highlights growth in recurring revenue and strategic opportunities, despite challenges in core revenue and cash flow. The technical analysis indicates stable momentum, while the financial performance and valuation scores reflect ongoing profitability and revenue growth challenges.

Positive Factors

Debt Reduction

Reducing debt ahead of schedule enhances financial stability and flexibility, allowing Sangoma to allocate resources towards growth initiatives and strategic investments.

Customer Satisfaction

Improved customer satisfaction and NPS scores indicate strong customer loyalty and service quality, which can lead to higher retention rates and long-term revenue stability.

Cash Flow Generation

Strong cash flow generation provides Sangoma with the ability to reinvest in its business, fund new projects, and weather economic fluctuations, supporting long-term growth.

Negative Factors

Revenue Decline

Inconsistent revenue trends and declines can hinder Sangoma's ability to sustain growth and profitability, impacting its competitive position and market share over time.

Profitability Challenges

Ongoing profitability challenges, as indicated by negative net profit margins, may limit Sangoma's ability to invest in growth opportunities and improve shareholder value.

Third-party Hardware Resale Volatility

Volatility in the third-party hardware resale business can lead to unpredictable revenue streams and affect Sangoma's overall financial performance, necessitating strategic adjustments.

Sangoma Technologies Business Overview & Revenue Model

Company Description

Sangoma Technologies Corporation (STC) is a leading provider of telecommunications and unified communication solutions, specializing in software and hardware that enhance communication capabilities for businesses. The company operates primarily in the sectors of VoIP (Voice over Internet Protocol) communications, telecommunications infrastructure, and cloud services. STC's core products include voice and video communication software, telephony hardware, and cloud-based services that facilitate seamless communication and collaboration across various platforms.

How the Company Makes Money

Sangoma Technologies generates revenue through multiple streams, primarily by offering subscription-based cloud services, hardware sales, and licensing fees for its software solutions. The company earns income from recurring revenue models, where customers pay for ongoing access to its cloud-based communication services. Additionally, STC sells telephony hardware, such as gateways and session border controllers, which provide the physical infrastructure necessary for VoIP communications. Significant partnerships with service providers and distributors also contribute to its revenue, as these collaborations expand the reach of its products and services. Furthermore, the company benefits from providing value-added services and technical support, which enhance customer loyalty and drive additional revenue.

Sangoma Technologies Financial Statement Overview

Summary

Sangoma Technologies faces challenges with declining revenue and profitability, impacting its income statement negatively. The balance sheet is stable with manageable debt levels, but the company struggles to generate positive returns on equity. Cash flow remains a concern due to declining free cash flow growth, although operating cash flows are relatively robust. Overall, the company needs to address revenue growth and profitability to improve its financial health.

Income Statement

Sangoma Technologies shows a declining revenue trend with a negative revenue growth rate of -43.9% in the TTM. The gross profit margin remains relatively strong at 68.6%, but the company struggles with profitability, evidenced by a negative net profit margin of -2.9% and a negative EBIT margin. The EBITDA margin is positive at 18.1%, indicating some operational efficiency despite overall losses.

Balance Sheet

The company's balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.24, which is manageable. However, the return on equity is negative at -2.7%, indicating inefficiencies in generating returns for shareholders. The equity ratio stands at 68.9%, suggesting a solid equity base relative to total assets.

Cash Flow

Cash flow analysis shows a significant decline in free cash flow growth at -59.6% in the TTM. The operating cash flow to net income ratio is 0.83, indicating that operating cash flows are relatively strong compared to net income. The free cash flow to net income ratio is 0.79, suggesting that the company is generating cash flow despite net losses.

Breakdown	TTM	Dec 2025	Dec 2023	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	235.41M	236.69M	252.53M	247.28M	224.35M	131.38M
Gross Profit	161.50M	161.75M	172.79M	172.82M	156.89M	96.05M
EBITDA	41.61M	42.95M	19.95M	42.29M	-77.43M	29.77M
Net Income	-7.07M	-5.01M	-29.03M	-8.66M	-110.78M	227.51K
Balance Sheet
Total Assets	373.68M	346.55M	442.75M	400.64M	498.53M	540.12M
Cash, Cash Equivalents and Short-Term Investments	17.07M	13.49M	11.16M	16.23M	12.70M	22.09M
Total Debt	70.32M	56.11M	115.16M	89.11M	122.61M	89.17M
Total Liabilities	116.38M	92.35M	176.63M	140.91M	204.72M	164.12M
Stockholders Equity	257.31M	254.19M	266.12M	259.73M	293.81M	375.99M
Cash Flow
Free Cash Flow	37.71M	32.95M	15.22M	33.33M	15.95M	12.87M
Operating Cash Flow	46.36M	41.79M	26.49M	44.25M	21.06M	15.70M
Investing Cash Flow	-8.65M	-8.84M	-11.27M	-10.91M	-55.82M	-109.89M
Financing Cash Flow	-36.54M	-35.68M	-16.77M	-28.26M	25.37M	96.41M

Sangoma Technologies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 below the 20-day moving average (MA) of 7.35, below the 50-day MA of 7.18, and below the 200-day MA of 7.49, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 35.72 is Neutral, neither overbought nor oversold. The STOCH value of 20.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:STC.

Sangoma Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TOI	61 Neutral	C$10.25B	4,101.97	-0.05%	―	25.22%	-97.97%
STC	56 Neutral	C$229.99M	-30.56	-2.18%	―	-4.34%	31.52%
BB	55 Neutral	C$3.48B	-182.73	2.66%	―	-13.61%	89.73%
DND	55 Neutral	C$274.06M	-1.72	―	1.84%	2.47%	19.37%
TIXT	55 Neutral	―	―	-20.44%	―	5.06%	-638.59%
CVO	54 Neutral	C$658.62M	-21.95	-18.09%	―	12.20%	-8.46%

Sangoma Technologies Corporate Events

Sangoma Technologies Announces Meeting Results

Sangoma Technologies Corporation announced that all seven nominees were elected as directors at their annual general and special meeting. Additionally, key resolutions, including the appointment of KPMG LLP as auditors and the approval of the Employee Share Purchase Plan, were passed with overwhelming support. These results demonstrate strong shareholder confidence in the company’s leadership and strategic initiatives.