Vecima Networks (VCM) AI Stock Analysis

• Market Cap: C$251.66M
• Dividend Yield: 2.13%
• Average Volume (3M): 2.28K
• Price to Earnings (P/E): 68.0
• Beta (1Y): 0.22
• Revenue Growth: 9.13%
• EPS Growth: -77.24%
• Country: CA
• Employees: 590
• Sector: Technology
• Sector Strength: 98
• Industry: Communication Equipment
• EPS (TTM): 0.02
• Shares Outstanding: 24,314,594
• 10 Day Avg. Volume: 2,018
• 30 Day Avg. Volume: 2,276
• PEG Ratio: N/A
• 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$11.50
• Price Target Upside: 11.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: C$11.50 ▲(11.11% Upside)

Vecima Networks' strong financial performance, robust cash flow, and recent strategic wins are significant positives. However, high valuation metrics and bearish technical indicators temper enthusiasm. The company's strategic advancements and dividend policy offer future growth potential and shareholder value.

Vecima Networks Business Overview & Revenue Model

Company Description

Vecima Networks Inc. provides technology solutions that empower network service providers and content providers to connect people and enterprises to information and entertainment worldwide. It offers products for the cable and broadcast industries, which provides video and broadband access to service providers, content creators, and broadcasters. The company operates through three segments: Video and Broadband Solutions, Content Delivery and Storage, and Telematics. The Video and Broadband Solutions segment offers platforms and modules that process data from the cable network and deliver in formats suitable to be consumed on televisions and Internet devices. Its principal products include Terrace and TerraceQAM, which are designed to meet the needs of the business services verticals, such as multi-unit dwellings, hotels, motels, and resorts; and Entra distributed access platform that addresses the network migration to a distributed access architecture. The Content Delivery and Storage segment offers solutions and software for industries and customers that focus on ingesting, producing, storing, delivering, and streaming video content for live linear, video on demand, network digital video recorder, and time-shifted TV services under the MediaScaleX and ContentAgent brands. The Telematics segment provides information and analytics for the fleet managers to manage their mobile and fixed assets under the Contigo, Nero Global Tracking, and FleetLynx brands. The company was founded in 1988 and is headquartered in Victoria, Canada. Vecima Networks Inc. is a subsidiary of 684739 B.C. Ltd.

How the Company Makes Money

Vecima Networks generates revenue primarily through the sale of its hardware and software products to telecommunications providers, cable operators, and media companies. The company's key revenue streams include the sale of broadband access products like DOCSIS cable modems and Wi-Fi gateways, as well as content delivery solutions such as video streaming and caching platforms. Additionally, Vecima earns income from its telematics solutions, which offer fleet management and vehicle tracking services. Significant partnerships with major telecommunications and media companies, along with a focus on innovation and expansion into emerging markets, contribute to Vecima's earnings.

Vecima Networks Financial Statement Overview

Summary

Vecima Networks shows strong revenue growth and robust cash generation capabilities. However, profitability margins are under pressure, and returns on equity are low. Maintaining a solid balance sheet with low leverage is a positive, but a strategic focus on enhancing profitability could improve overall financial health.

Income Statement

Vecima Networks shows a strong revenue growth trajectory with a significant increase in total revenue from 2020 to TTM 2025. Gross profit margin for TTM is robust at 43.11%, indicating efficient cost management. However, Net Profit Margin for TTM is low at 1.21%, suggesting challenges in converting revenue to profit. EBIT and EBITDA margins have decreased over the past year, possibly indicating rising operational costs or pricing pressures.

Balance Sheet

The balance sheet reflects a stable financial position with a reasonable Debt-to-Equity ratio of 0.30 for TTM, demonstrating conservative leverage practices. Return on Equity is low at 1.59% for TTM, indicating limited returns on shareholder investments. The equity ratio stands at a healthy 63.38%, suggesting financial stability and low risk in terms of asset financing.

Cash Flow

Cash flow analysis reveals a positive trajectory with substantial improvement in operating cash flow, resulting in a strong Free Cash Flow for TTM of $38.89 million. The Operating Cash Flow to Net Income ratio is high, showcasing effective cash generation relative to profit. The company has turned around its cash flow position from negative free cash flow in previous years.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	291.05M	303.44M	186.81M	124.18M	96.42M
Gross Profit	136.66M	141.97M	89.96M	56.64M	52.30M
EBITDA	49.81M	55.89M	29.05M	10.77M	18.98M
Net Income	19.39M	27.21M	8.69M	-331.00K	1.81M
Balance Sheet
Total Assets	387.82M	331.69M	262.61M	214.73M	210.30M
Cash, Cash Equivalents and Short-Term Investments	2.14M	2.28M	12.90M	28.91M	34.52M
Total Debt	69.56M	36.90M	16.90M	5.72M	6.31M
Total Liabilities	152.86M	114.03M	82.88M	39.81M	30.54M
Stockholders Equity	234.96M	217.65M	179.73M	174.92M	179.76M
Cash Flow
Free Cash Flow	-27.34M	-37.36M	-19.94M	1.44M	-3.53M
Operating Cash Flow	2.71M	-11.01M	3.33M	20.05M	9.83M
Investing Cash Flow	-26.19M	-26.35M	-23.27M	-5.00M	-5.96M
Financing Cash Flow	23.62M	26.84M	4.99M	-4.61M	-5.97M

Vecima Networks Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 10.35 is below the 20-day moving average (MA) of 10.62, above the 50-day MA of 10.15, and below the 200-day MA of 12.41, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 48.83 is Neutral, neither overbought nor oversold. The STOCH value of 13.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:VCM.

Vecima Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ET	78 Outperform	C$908.96M	15.42	22.35%	7.87%	-2.52%	-15.21%
VCM	68 Neutral	C$251.66M	68.05	1.61%	2.13%	9.13%	-77.24%
Sector *	61 Neutral	$35.87B	6.13	-9.30%	2.06%	7.63%	-6.38%
BYL	53 Neutral	C$44.71M	―	275.12%	―	―	―
QTRH	49 Neutral	$153.09M	―	-11.53%	―	4.23%	47.22%
TSAT	48 Neutral	$428.32M	8.35	-14.04%	―	-24.21%	-440.28%
CMI	46 Neutral	C$38.03M	24.42	-5.22%	5.56%	-51.54%	-164.01%

Vecima Networks Corporate Events

Vecima Networks Strengthens Market Position with Strategic Wins and Product Advancements

Vecima Networks reported a revenue of $64.0 million for Q3 Fiscal 2025, with a gross margin of 47.7% and an adjusted EBITDA of $9.4 million, showing improvement despite industry timing challenges. The company secured a multi-year agreement with Cox Communications for its Entra vCMTS solution, positioning itself as a key player in the cloud-based vCMTS market, which is expected to grow significantly. Vecima’s strategic advancements and product deployments, such as the EN9000 and EN8400 nodes, are set to drive future growth as operators upgrade their systems.

The most recent analyst rating on (TSE:VCM) stock is a Buy with a C$27.00 price target. To see the full list of analyst forecasts on Vecima Networks stock, see the TSE:VCM Stock Forecast page.

Vecima Networks Announces Quarterly Dividend

Vecima Networks Inc. has announced a quarterly dividend of $0.055 per common share, payable on June 23, 2025, to shareholders recorded by May 30, 2025. This decision aligns with the company’s existing dividend policy and underscores its commitment to delivering value to shareholders. The dividend is designated as an ‘eligible dividend’ for Canadian tax purposes, with future dividends subject to board approval.

The most recent analyst rating on (TSE:VCM) stock is a Buy with a C$27.00 price target. To see the full list of analyst forecasts on Vecima Networks stock, see the TSE:VCM Stock Forecast page.