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Supremex Inc. (TSE:SXP)
TSX:SXP
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Supremex (SXP) AI Stock Analysis

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TSE:SXP

Supremex

(TSX:SXP)

Rating:58Neutral
Price Target:
C$4.50
▲(1.58% Upside)
Supremex's overall stock score is primarily influenced by its financial performance challenges, including declining revenue and profitability. Technical analysis shows positive momentum, providing some support to the stock. The valuation is concerning due to a negative P/E ratio, though the dividend yield is attractive. The earnings call provides a cautiously optimistic outlook, highlighting strategic actions and a strengthened financial position.

Supremex (SXP) vs. iShares MSCI Canada ETF (EWC)

Supremex Business Overview & Revenue Model

Company DescriptionSupremex Inc. manufactures and markets envelopes, and paper packaging solutions and specialty products to corporations, resellers, government entities, SMEs, and solutions providers in Canada, and the Northeastern and Midwestern United States. The company offers a range of stock and custom envelopes in various styles, shapes, and colors; corrugated boxes, and folding carton and e-Commerce fulfillment packaging solutions; polyethylene bags for courier applications and bubble mailers. It serves various industries, including food, pharmaceuticals, cosmetics, and personal care products. The company was founded in 1977 and is based in LaSalle, Canada.
How the Company Makes MoneySupremex makes money through the production and sale of its paper-based products, with envelopes and packaging solutions being the primary revenue streams. The company generates revenue by manufacturing these products in large volumes and selling them to businesses across different sectors, including retail, financial services, and e-commerce. Supremex also benefits from long-term contracts and partnerships with key clients, allowing for consistent revenue generation. Additionally, the company's emphasis on sustainability and innovation helps attract environmentally conscious customers and opens up new market opportunities.

Supremex Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in the Packaging segment and a strengthened financial position through strategic transactions and M&A activities. However, challenges in the Envelope segment and a foreign exchange loss negatively impacted financial performance. Despite these challenges, the company's strategic actions and solid financial footing suggest a cautiously optimistic outlook.
Q2-2025 Updates
Positive Updates
Packaging Segment Growth
The Packaging segment saw double-digit revenue growth with strong performance in folding carton and e-commerce activities. Adjusted EBITDA was up 7.5% from the same period last year.
Financial Position Strengthened
Supremex Inc. significantly strengthened its balance sheet by extinguishing virtually all debt through sale-leaseback transactions on two properties. A special dividend of $0.50 per share was declared.
Successful M&A Activity
Supremex completed two acquisitions: Enveloppe Laurentide, adding approximately $10 million in sales, and Trans-Graphique, with annual revenues of approximately $5 million.
Negative Updates
Envelope Segment Decline
Revenue from the Envelope segment decreased to $43.8 million from $49.5 million last year, reflecting an 8.7% decrease in average selling prices and a 3.1% decrease in volume.
Foreign Exchange Loss Impact
A foreign exchange loss impacted profitability by $1.4 million, creating a negative swing of $1.5 million versus the comparative quarter last year.
Net Cash Flow Reduction
Net cash flow from operating activities was $0.3 million compared to $10.2 million last year due to working capital requirements and lower profitability.
Company Guidance
During the Supremex Inc. Second Quarter 2025 Earnings Conference Call, management provided guidance and updates on various metrics. The company reported a total revenue of $66 million, with the Envelope segment contributing $43.8 million and showing a 3.1% volume decrease. The Packaging & Specialty Products segment achieved a revenue of $22.2 million, reflecting an 11.6% year-over-year increase. Adjusted EBITDA for the quarter was $5.8 million, or 8.8% of sales, down from $9 million, or 13% of sales, the previous year. The company faced a $1.4 million foreign exchange loss, impacting profitability. Despite these challenges, Supremex declared a special dividend of $0.50 per share and announced two small acquisitions aimed at enhancing operational efficiency. Management expressed confidence in the company's solid financial position, with a strong balance sheet and a net debt to adjusted EBITDA ratio of 1.1x. The Board also renewed a stock buyback program and declared a regular quarterly dividend of $0.05 per share.

Supremex Financial Statement Overview

Summary
Supremex faces challenges in revenue growth and profitability, as evidenced by the negative net income and declining revenue in the TTM period. However, the company has demonstrated resilience through improved gross profit margins and solid cash flow management. The balance sheet remains stable with manageable debt levels, providing a strong foundation for potential future growth.
Income Statement
62
Positive
Supremex has shown fluctuating revenue and profitability over recent years. The TTM data shows a decrease in total revenue compared to the previous year, with a negative net profit margin of -4.79%, indicating a challenging period for profitability. However, the gross profit margin improved significantly from the previous year, suggesting some operational efficiency. The EBIT and EBITDA margins have also shown improvement in the TTM period, although they remain below industry standards.
Balance Sheet
70
Positive
The company's balance sheet reflects a moderate debt-to-equity ratio of 0.71, indicating a balanced leverage situation. Stockholders' equity remains stable, with a healthy equity ratio of 48.93%, which suggests a solid foundation. However, the total assets have slightly decreased, reflecting some challenges in asset growth.
Cash Flow
75
Positive
Supremex has maintained positive free cash flow growth, with a strong free cash flow of 32.37 million CAD in the TTM period. The operating cash flow to net income ratio is favorable, indicating effective cash management despite negative net income. The free cash flow to net income ratio is particularly strong, highlighting the company's ability to generate cash even in less profitable times.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue274.62M281.04M302.19M272.47M226.43M204.60M
Gross Profit160.58M79.45M87.22M75.10M53.11M57.25M
EBITDA10.48M15.91M48.28M55.11M36.91M27.47M
Net Income-15.61M-11.74M17.33M28.44M15.75M7.49M
Balance Sheet
Total Assets228.40M236.97M263.76M260.56M206.37M186.55M
Cash, Cash Equivalents and Short-Term Investments2.06M1.79M1.07M1.93M6.36M3.04M
Total Debt41.68M87.92M89.25M88.10M67.60M75.68M
Total Liabilities115.46M122.00M139.22M136.24M108.97M107.59M
Stockholders Equity112.94M114.97M134.72M124.32M97.40M78.96M
Cash Flow
Free Cash Flow22.55M30.36M37.64M23.82M26.09M34.45M
Operating Cash Flow24.04M32.09M43.90M26.91M30.00M37.03M
Investing Cash Flow-1.37M-2.92M-35.50M-31.72M-6.61M-29.98M
Financing Cash Flow-21.94M-27.36M-9.59M-48.85K-20.02M-5.71M

Supremex Technical Analysis

Technical Analysis Sentiment
Positive
Last Price4.43
Price Trends
50DMA
4.10
Positive
100DMA
3.96
Positive
200DMA
3.83
Positive
Market Momentum
MACD
0.07
Positive
RSI
54.02
Neutral
STOCH
45.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SXP, the sentiment is Positive. The current price of 4.43 is above the 20-day moving average (MA) of 4.28, above the 50-day MA of 4.10, and above the 200-day MA of 3.83, indicating a bullish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 54.02 is Neutral, neither overbought nor oversold. The STOCH value of 45.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SXP.

Supremex Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
C$14.11B18.4615.20%1.48%7.90%19.55%
71
Outperform
C$2.56B13.2810.79%7.76%4.69%4.54%
68
Neutral
C$1.69B9.499.65%9.29%-2.58%100.21%
61
Neutral
$17.96B13.14-5.36%3.00%1.25%-13.95%
58
Neutral
C$108.80M-12.57%4.29%-3.54%-244.21%
$710.98M-0.47%4.78%
$10.33B18.4114.88%1.48%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:SXP
Supremex
4.30
0.32
8.04%
TSE:CCL.A
CCL Industries (A)
82.24
4.00
5.11%
TSE:TCL.A
Transcontinental
20.46
5.04
32.68%
TSE:WPK
Winpak
41.93
-0.05
-0.12%
CADNF
Cascades
7.14
0.61
9.34%
CCDBF
CCL Industries
59.06
1.25
2.16%

Supremex Corporate Events

M&A TransactionsStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Supremex Reports Q2 2025 Results, Declares Special Dividend, and Expands with Acquisitions
Neutral
Aug 7, 2025

Supremex Inc. announced its second quarter results for 2025, reporting a total revenue of $66.0 million, a decline from the previous year, and a net loss of $0.3 million. The company declared a special dividend of $0.50 per common share and renewed its normal course issuer bid to repurchase shares. Supremex completed two acquisitions to enhance its operations, which are expected to be immediately accretive, and executed a sale-leaseback transaction to strengthen its balance sheet. Despite challenges in the envelope segment due to reduced volume from a major U.S. customer and pricing pressures, the packaging segment showed strong growth.

The most recent analyst rating on (TSE:SXP) stock is a Buy with a C$5.75 price target. To see the full list of analyst forecasts on Supremex stock, see the TSE:SXP Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Supremex Unlocks Shareholder Value with $53 Million Sale-Leaseback Deal
Positive
Jul 10, 2025

Supremex Inc. has completed a sale-leaseback transaction of two properties, generating $53.0 million in gross proceeds. This transaction enhances the company’s financial flexibility, enabling it to focus on strategic objectives and sustain profitable growth, while optimizing shareholder returns. The properties, located in LaSalle, Quebec, and Etobicoke, Ontario, house the company’s primary envelope sales and manufacturing facilities. Supremex has entered into a 10-year lease agreement with options for renewal, ensuring continued operations at these sites.

The most recent analyst rating on (TSE:SXP) stock is a Buy with a C$5.75 price target. To see the full list of analyst forecasts on Supremex stock, see the TSE:SXP 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: Aug 20, 2025