Vecima Networks (VCM) AI Stock Analysis

• Market Cap: C$235.61M
• Dividend Yield: 2.47%
• Average Volume (3M): 4.00K
• Price to Earnings (P/E): 26.0
• Beta (1Y): 0.30
• Revenue Growth: 15.70%
• EPS Growth: -44.25%
• Country: CA
• Employees: 590
• Sector: Technology
• Sector Strength: 57
• Industry: Communication Equipment
• EPS (TTM): 0.34
• Shares Outstanding: 24,314,594
• 10 Day Avg. Volume: 2,263
• 30 Day Avg. Volume: 3,995
• PEG Ratio: N/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 Ratio: 4.30
• 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$18.00
• Price Target Upside: 85.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Vecima Networks scores moderately due to its robust financial performance and improved cash flow management. However, technical indicators suggest bearish momentum, and the valuation appears high. The dividend announcement supports shareholder value but does not significantly alter the overall score.

Vecima Networks Business Overview & Revenue Model

Company Description

Vecima Networks (VCM) is a technology company that specializes in providing advanced broadband access, content delivery, and telematics solutions. The company operates in sectors including telecommunications, media, and transportation, offering products and services such as video delivery software, broadband access equipment, and fleet management solutions. Vecima's core products cater to the needs of network service providers and enterprises, enabling them to deliver high-quality video, internet, and telematics services to their customers.

How the Company Makes Money

Vecima Networks generates revenue primarily through the sale of its technology solutions and services. The company earns money by providing broadband access products, which include hardware and software solutions for cable and telecommunications providers to enhance their network capabilities. Additionally, Vecima's content delivery and storage solutions are a significant revenue stream, serving media companies and service providers that require efficient video and data distribution. The telematics division contributes to earnings by offering fleet and asset management solutions to businesses, improving operational efficiencies. Vecima also benefits from strategic partnerships and long-term contracts with major network operators and enterprises, which provide a steady income stream through recurring sales and service agreements.

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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 9.69
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VCM, the sentiment is Neutral. The current price of 9.69 is above the 20-day moving average (MA) of 9.45, below the 50-day MA of 10.27, and below the 200-day MA of 16.32, indicating a neutral trend. The MACD of -0.36 indicates Negative momentum. The RSI at 49.12 is Neutral, neither overbought nor oversold. The STOCH value of 28.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:VCM.

Vecima Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLS	72 Outperform	$14.77B	25.52	25.87%	―	24.94%	42.45%
VCM	64 Neutral	C$235.61M	25.99	3.67%	2.47%	15.70%	-44.25%
Sector *	59 Neutral	$10.74B	10.21	-6.69%	3.04%	7.44%	-10.92%
DRT	54 Neutral	C$191.53M	11.87	59.45%	―	-2.68%	―
BB	50 Neutral	$2.62B	―	-7.59%	―	-31.15%	30.02%

Vecima Networks Corporate Events

Vecima Networks Sees Revenue Growth Amidst Operational Challenges

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.

Vecima Networks Declares Quarterly Dividend

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.

Vecima Networks Reports Preliminary Q2 Fiscal 2025 Results Amid Operational Challenges

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.

Vecima Networks Announces Q2 Fiscal 2025 Results Conference Call

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.