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Vecima Networks (TSE:VCM)
:VCM
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Vecima Networks
(TSX:VCM)
65Neutral
Vecima Networks (VCM) vs. S&P 500 (SPY)
Market Cap
C$238.28M
Dividend Yield2.24%
Average Volume (3M)5.30K
Price to Earnings (P/E)28.6
Beta (1Y)0.22
Revenue Growth15.70%
EPS Growth-44.25%
CountryCA
Employees590
SectorTechnology
Sector Strength44
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.34
Shares Outstanding24,314,594
10 Day Avg. Volume4,467
30 Day Avg. Volume5,305
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.81
Price to Cash Flow (P/CF)4.30
P/FCF Ratio4.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$18.00Price Target Upside83.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Vecima Networks Business Overview & Revenue Model
Company DescriptionVecima Networks Inc. (VCM) is a technology company that specializes in developing advanced broadband networks, content delivery, and storage solutions. The company operates primarily in the telecommunications and media sectors, offering a range of products and services including broadband access products, video and broadband solutions, and telematics. Vecima's solutions enable service providers to deliver high-speed internet and video services to their customers efficiently.
How the Company Makes MoneyVecima Networks generates revenue through the sale of its broadband and video solutions to telecommunication service providers, cable operators, and other enterprises. Key revenue streams include the licensing of its software, sale of hardware products, and provision of professional services related to the deployment and maintenance of its solutions. The company also earns from strategic partnerships and collaborations with major industry players, which help in expanding its market reach and enhancing its product offerings. Additionally, Vecima benefits from recurring revenues through long-term contracts and service agreements with its clients.
Vecima Networks Financial Statement Overview
Summary
Vecima Networks demonstrates robust financial health with strong revenue growth and operational efficiency. The income statement shows a healthy gross profit margin at 41.8% and a net profit margin of 2.6%. The balance sheet is solid with a manageable debt-to-equity ratio of 0.24 and an equity ratio of 63.6%. Cash flow management has improved, although return on equity could be enhanced.Income Statement
Vecima Networks shows a strong revenue growth trajectory with a notable increase from the previous year. The TTM Gross Profit Margin is healthy at 41.8%, and the Net Profit Margin stands at 2.6%, indicating profitability despite competitive pressures in the hardware industry. The company also maintains a decent EBITDA Margin of 13.2%, reflecting operational efficiency.78
Positive
Balance Sheet
The balance sheet reflects a solid equity position with an Equity Ratio of 63.6%, which signifies financial stability. The Debt-to-Equity Ratio is manageable at 0.24, indicating conservative leverage. However, the Return on Equity (ROE) is relatively low at 3.6%, suggesting limited returns on equity capital.72
Positive
Cash Flow
Vecima Networks has shown an improvement in Free Cash Flow, with positive Free Cash Flow in the TTM period. However, the Operating Cash Flow to Net Income Ratio is 5.67, indicating strong cash generation relative to net earnings. The Free Cash Flow to Net Income Ratio is 1.85, reflecting efficient cash management.65
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 320.74M | 291.05M | 303.44M | 186.81M | 124.18M | 96.42M | Gross Profit |
| 134.25M | 136.66M | 141.97M | 89.96M | 56.64M | 52.30M | EBIT |
| 24.71M | 29.59M | 33.29M | 9.44M | -1.17M | 223.00K | EBITDA |
| 42.28M | 49.81M | 55.89M | 29.05M | 10.77M | 18.98M | Net Income Common Stockholders |
| 8.32M | 19.39M | 27.21M | 8.69M | -331.00K | 1.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.36M | 2.14M | 2.28M | 12.90M | 28.91M | 34.52M | Total Assets |
| 365.93M | 387.82M | 331.69M | 262.61M | 214.73M | 210.30M | Total Debt |
| 54.74M | 69.56M | 36.90M | 16.90M | 5.72M | 6.31M | Net Debt |
| 52.38M | 67.43M | 34.62M | 4.00M | -23.18M | -11.04M | Total Liabilities |
| 133.27M | 152.86M | 114.03M | 82.88M | 39.81M | 30.54M | Stockholders Equity |
| 232.66M | 234.96M | 217.65M | 179.73M | 174.92M | 179.76M |
| Cash Flow | Free Cash Flow | ||||
| 15.35M | -27.34M | -37.36M | -19.94M | 1.44M | -3.53M | Operating Cash Flow |
| 47.13M | 2.71M | -11.01M | 3.33M | 20.05M | 9.83M | Investing Cash Flow |
| -31.80M | -26.19M | -26.35M | -23.27M | -5.00M | -5.96M | Financing Cash Flow |
| -14.63M | 23.62M | 26.84M | 4.99M | -4.61M | -5.97M |
Vecima Networks Technical Analysis
Negative
9.80
Price Trends
11.70
Negative
14.07
Negative
17.35
Negative
Market Momentum
-0.44
Positive
25.01
Positive
25.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VCM, the sentiment is Negative. The current price of 9.8 is below the 20-day moving average (MA) of 10.64, below the 50-day MA of 11.70, and below the 200-day MA of 17.35, indicating a bearish trend. The MACD of -0.44 indicates Positive momentum. The RSI at 25.01 is Positive, neither overbought nor oversold. The STOCH value of 25.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:VCM.
Vecima Networks Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $13.72B | 22.74 | 23.36% | ― | 23.03% | 81.01% | |
65 Neutral | C$238.28M | 28.65 | 3.67% | 2.24% | 15.70% | -44.25% | |
57 Neutral | $20.97B | 10.32 | -14.01% | 2.49% | 4.46% | -23.38% | |
56 Neutral | C$191.53M | 11.87 | 59.45% | ― | -2.68% | ― | |
50 Neutral | $3.21B | ― | -13.55% | ― | -26.72% | 77.64% |
* Technology Sector Average
Performance Comparison
TSE:VCM
Vecima Networks
9.60
-10.55
-52.36%
TSE:BB
BlackBerry
5.35
1.53
40.05%
TSE:CLS
Celestica
113.08
49.44
77.69%
TSE:DRT
DIRTT Environmental Solutions
1.01
0.33
48.53%
Vecima Networks Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -13.43% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in sales and strategic acquisitions, particularly in the Video and Broadband Solutions segment, which drove a substantial increase in operating income and cash flow. However, challenges in the Content Delivery and Storage segment and a shift in product mix affecting gross margins were notable lowlights. The overall sentiment is cautiously optimistic, with expectations of a stronger second half of the year.Highlights
Record-Breaking Sales Growth
Sales in Q1 of $81.9 million represented the second highest quarterly sales in Vecima's history, up 33% year-over-year.
Entra DAA Portfolio Success
Entra sales have grown over 13-fold from $5.2 million four years ago to $68.3 million this quarter.
VBS Segment Revenue Growth
The Video and Broadband Solutions segment contributed sales of $72.9 million, a 65% year-over-year increase.
Telematics Segment Growth
Telematics segment sales increased 5% year-over-year, with over 72,000 assets monitored for over 200 customers.
Improved Operating Income
Operating income increased 69% year-over-year to $4.5 million, reflecting higher VBS sales.
Strong Cash Flow
Cash flow provided by operations increased to $24.4 million from $8.4 million year-over-year.
Strategic Acquisition of Falcon V Systems
Acquisition of Falcon V Systems brought in new technologies like Principal Core and Test Suite Solution, enhancing Vecima’s product offerings.
Lowlights
Content Delivery and Storage Segment Decline
CDS segment sales decreased 54% year-over-year and 35% quarter-over-quarter due to delays in customer IPTV deployment projects.
Lower Gross Margins
Gross margin decreased to 41.7% from 48.8% last year, primarily due to product mix changes and reduced high-margin CDS sales.
Commercial Video Sales Decrease
Commercial video sales decreased 15% year-over-year and 23% quarter-over-quarter as customers transition to next-gen technologies.
BEAD Program Delays
Slower than expected start of the USD 42.5 billion BEAD program, impacting potential revenue from fiber access products.
Company Guidance
In the earnings call for Vecima Networks' Q1 fiscal year 2025, the company reported significant growth metrics and strategic developments. Revenue for the quarter reached $81.9 million, marking the second-highest quarterly revenue in the company's history and reflecting a 33% year-over-year increase. The Video and Broadband Solutions (VBS) segment was a key contributor, with sales growing 65% year-over-year to $72.9 million, driven by the Entra Distributed Access Architecture (DAA) sales, which rose 76% year-over-year. Gross profit increased by 14% to $34.2 million, although the gross margin declined to 41.7% from 48.8% due to product mix shifts. Operating income surged 69% to $4.5 million, and net income improved to $2.1 million, or $0.09 per share, compared to $1.7 million or $0.07 per share the previous year. Adjusted EBITDA saw a 43% increase to $11.6 million. The company also highlighted the acquisition of Falcon V Systems, which is expected to enhance its network convergence capabilities and provide new revenue opportunities. Despite some delays in projects within the Content Delivery and Storage (CDS) segment, Vecima anticipates a stronger second half of the fiscal year, driven by continued DAA deployments and new product introductions, including the vCMTS platform and developments in DOCSIS 4.0 technology.Vecima Networks Corporate Events
Business Operations and StrategyFinancial Disclosures
Vecima Networks Sees Revenue Growth Amidst Operational Challenges
Neutral
Feb 13, 2025
Vecima Networks reported a 15% increase in Q2 fiscal 2025 revenue to $71.2 million, driven by a 29% growth in Entra sales. However, the company faced challenges due to a temporary shift in product mix, timing adjustments in customer upgrades, foreign exchange volatility, and one-time restructuring costs, resulting in a net loss. Despite these setbacks, Vecima achieved significant milestones, positioning itself for future growth in its key business segments.
DividendsBusiness Operations and Strategy
Vecima Networks Declares Quarterly Dividend
Positive
Feb 12, 2025
Vecima Networks Inc. has announced a quarterly dividend of $0.055 per common share, payable on March 24, 2025, in line with its established dividend policy. This decision reflects Vecima’s ongoing commitment to delivering value to its shareholders, reinforcing its stable financial standing and strategic market positioning in the broadband and video streaming industry.
Business Operations and StrategyFinancial Disclosures
Vecima Networks Reports Preliminary Q2 Fiscal 2025 Results Amid Operational Challenges
Neutral
Feb 7, 2025
Vecima Networks announced preliminary second-quarter fiscal 2025 results, highlighting challenges due to customer timing adjustments, foreign exchange volatility, and a temporary shift in product mix leading to a lower gross margin. Despite these challenges, Vecima achieved significant milestones positioning the company for future growth, including workforce restructuring expected to save $17.5 million annually. The company remains confident in its growth prospects amid demand volatility and potential U.S.-Canada trade actions, continuing to lead in the high-growth DAA and IPTV markets with a strong track record and a growing portfolio of next-generation solutions.
Financial Disclosures
Vecima Networks Announces Q2 Fiscal 2025 Results Conference Call
Neutral
Jan 30, 2025
Vecima Networks announced it will host a conference call and live webcast on February 13, 2025, to discuss its financial and operational results for the periods ending December 31, 2024. This event will provide insights into the company’s recent performance and offer an opportunity for analysts and institutional investors to engage with Vecima’s management through a Q&A session. The announcement underlines Vecima’s transparency and engagement with its stakeholders, reflecting its commitment to maintaining a strong industry position and providing valuable information to its investors.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.