Velan Inc. SV (TSE:VLN)
TSX:VLN
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Velan Inc. SV
(TSX:VLN)
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Rating:47Neutral
Price Target:
C$14.50
▼(-21.71% Downside)
Action:ReiteratedDate:01/17/26
The score is held down primarily by weak financial performance (declining revenue, negative operating profitability, and severe TTM cash burn) and a bearish technical setup (below key moving averages with negative momentum). Offsetting factors include constructive earnings-call datapoints (bookings/backlog strength and improved reported earnings) and some valuation support from the dividend yield, though payout and earnings quality risks remain.
Positive Factors
Bookings and backlog growth
A sizable, growing backlog and strong bookings create a durable revenue pipeline over the next 12 months, reducing near-term top-line volatility. High book-to-bill momentum supports capacity utilization and planning, improving the probability of steadier revenue conversion despite cyclical end markets.
Negative Factors
Very weak cash generation (TTM)
Persistently negative operating and free cash flow in the trailing twelve months indicates poor cash conversion and heightens funding risk. This undermines internal investment capacity, dividend reliability, and increases the likelihood of external financing, diluting long‑term financial flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Bookings and backlog growth
A sizable, growing backlog and strong bookings create a durable revenue pipeline over the next 12 months, reducing near-term top-line volatility. High book-to-bill momentum supports capacity utilization and planning, improving the probability of steadier revenue conversion despite cyclical end markets.
Read all positive factors
Velan Inc. SV (VLN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$336.73M
Dividend Yield3.06%
Average Volume (3M)7.26K
Price to Earnings (P/E)23.3
Beta (1Y)0.76
Revenue Growth-18.71%
EPS Growth-845.27%
CountryCA
Employees1,617
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.19
Shares Outstanding6,019,000
10 Day Avg. Volume9,119
30 Day Avg. Volume7,261
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)0.45
Price to Sales (P/S)0.24
P/FCF Ratio-16.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Velan Inc. SV Business Overview & Revenue Model
Company Description
Velan Inc. designs, manufactures, and markets industrial valves worldwide. It offers cryogenic valves comprising cast steel cryogenic, small forged cryogenic, cryogenic triple-offset, memoryseal ball, and cryogenic control valves; gate, globe, and...
How the Company Makes Money
Velan Inc. generates revenue through the sale of its valve products and related services. The company's primary revenue streams include direct sales of valves to end-users in various industries, aftermarket services that include maintenance, repai...
Velan Inc. SV Earnings Call Summary
Earnings Call Date:Jan 14, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Neutral
Balanced/Neutral. The quarter shows meaningful operational momentum — notably a 32% YoY increase in bookings, an 8% rise in backlog and a multi-million-dollar OPG contract — and reported net income returned to positive. However, profitability on an adjusted basis declined significantly (adjusted EBITDA down ~33.6%, adjusted net income down ~52.9%), working capital and operating cash flows were strained (cash used increased materially), and the company will absorb substantial transaction-related costs and temporarily suspend dividends. The strategic sale to Birch Hill offers access to capital and potential acceleration of the strategic plan but introduces near-term costs and shareholder valuation questions. Taken together, positives and negatives are broadly balanced.Positive Updates
Order Book and Bookings Growth
Order backlog reached $296.8 million at quarter end, up 8% from the beginning of the year. Bookings for Q3 were $77.9 million, a year-over-year increase of 32%, driven by higher bookings in North America (nuclear and oil & gas), Italy and China.
Negative Updates
Decline in Adjusted EBITDA and Adjusted Net Income
Adjusted EBITDA decreased from $14.3 million a year ago to $9.5 million in Q3 2026 (a decline of ~33.6%). Adjusted net income fell from $8.5 million to $4.0 million (a decline of ~52.9%), reflecting lower gross profit and unfavorable other expenses (currency unrealized variations).
Read all updates
Q3-2026 Updates
Positive
Negative
Order Book and Bookings Growth
Order backlog reached $296.8 million at quarter end, up 8% from the beginning of the year. Bookings for Q3 were $77.9 million, a year-over-year increase of 32%, driven by higher bookings in North America (nuclear and oil & gas), Italy and China.
Read all positive updates
Company Guidance
Management’s guidance was essentially “business as usual” with an expected closing of the proposed Birch Hill transaction in H1 2026, dividends suspended until closing (to resume thereafter), and an expectation to deliver a strong Q4 and that cash inflows will recover once customer delivery schedules normalize; key metrics cited were Q3 sales $71.7M (‑2.4% YoY), adjusted EBITDA $9.5M (vs. $14.3M prior year), gross profit $27.2M (37.9% of sales), adjusted Q3 net income $4.0M (reported net income $3.0M, $0.14/sh), Q3 bookings $77.9M (+32% YoY), backlog $296.8M (80.4% deliverable within 12 months = $238.5M), a >CAD20M OPG order with first shipment Jan 2027 and completion by Jan 2028, cash and short‑term investments $36.7M, bank indebtedness $16.1M, long‑term debt $17.7M, roughly $86M total available liquidity, and estimated transaction-related costs of about USD 10–11M plus ~$5M of change‑of‑control items (≈$16M total, ~$4M already paid).Velan Inc. SV Financial Statement Overview
Summary
Income Statement
32
Negative
Balance Sheet
66
Positive
Cash Flow
18
Very Negative
| Breakdown | TTM | Feb 2024 | Feb 2023 | Feb 2022 | Feb 2021 | Feb 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 294.70M | 295.20M | 346.82M | 370.43M | 411.24M | 302.06M |
| Gross Profit | 89.14M | 84.92M | 93.21M | 112.47M | 134.97M | 80.54M |
| EBITDA | -5.94M | -72.80M | 5.64M | -34.65M | 50.61M | 11.83M |
| Net Income | 65.34M | -75.50M | -19.74M | -55.46M | -10.26M | 2.20M |
Balance Sheet | ||||||
| Total Assets | 343.08M | 501.97M | 479.39M | 477.86M | 508.43M | 580.83M |
| Cash, Cash Equivalents and Short-Term Investments | 36.70M | 35.23M | 41.72M | 50.55M | 62.74M | 74.97M |
| Total Debt | 35.84M | 24.88M | 41.42M | 40.91M | 44.02M | 84.05M |
| Total Liabilities | 156.51M | 403.23M | 296.13M | 277.02M | 242.92M | 280.61M |
| Stockholders Equity | 185.82M | 97.86M | 182.18M | 199.89M | 264.82M | 297.08M |
Cash Flow | ||||||
| Free Cash Flow | -184.54M | 15.85M | -4.94M | -6.07M | 9.25M | -20.00M |
| Operating Cash Flow | -178.15M | 26.52M | 4.30M | 522.00K | 17.87M | -9.10M |
| Investing Cash Flow | 172.01M | -10.28M | -14.13M | 1.76M | -26.00K | 2.90M |
| Financing Cash Flow | -14.85M | -9.81M | -4.66M | -2.62M | -23.52M | 33.10M |
Velan Inc. SV Technical Analysis
Negative
18.52
Price Trends
15.57
Positive
16.74
Negative
15.91
Negative
Market Momentum
-0.05
Positive
44.55
Neutral
51.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VLN, the sentiment is Negative. The current price of 18.52 is above the 20-day moving average (MA) of 15.87, above the 50-day MA of 15.57, and above the 200-day MA of 15.91, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 44.55 is Neutral, neither overbought nor oversold. The STOCH value of 51.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:VLN.
Velan Inc. SV Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | C$21.17M | 15.29 | 3.19% | ― | 0.38% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | C$3.88B | 30.95 | 1.09% | ― | -5.59% | -104.09% | |
53 Neutral | C$1.04B | -10.77 | -14.67% | ― | 1.18% | 62.71% | |
47 Neutral | C$336.73M | 23.33 | 41.08% | 3.06% | -18.71% | -845.27% | |
47 Neutral | C$107.48M | -4.02 | 125.90% | ― | -6.83% | 46.97% | |
43 Neutral | C$33.24M | -9.73 | -5.73% | ― | 69.04% | 80.18% |
* Industrials Sector Average
TSE:VLN
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15.60
1.39
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Velan Inc. SV Corporate Events
Business Operations and StrategyM&A Transactions
Velan’s Controlling Stake Sold to Birch Hill in C$204 Million Deal
Positive
Jan 15, 2026
Velan Inc.’s controlling shareholder, Velan Holding Co. Ltd., has agreed to sell its entire 72.1% equity stake, representing roughly 92% of voting rights, to funds managed by Birch Hill Equity Partners for C$13.10 per share, valuing the bloc...
Business Operations and StrategyFinancial Disclosures
Velan Returns to Profit as Backlog Grows and Ownership Change Looms
Positive
Jan 15, 2026
Velan Inc. reported a solid third quarter for fiscal 2026, with sales holding steady at $71.7 million and gross margins near 38%, while turning around last year’s heavy loss into a net profit of $3.0 million from continuing operations and ma...
Financial Disclosures
Velan Sets January 14 Date to Release Q3 2025 Results and Hold Analyst Call
Neutral
Dec 19, 2025
Velan Inc. will release its financial results for the third quarter ended November 30, 2025, on January 14, 2026, followed by an analyst conference call on January 15 to discuss the performance. The company is providing multiple access options for...
Business Operations and StrategyProduct-Related Announcements
Velan Inc. Secures Major Valve Order for Pickering Nuclear Station
Positive
Oct 20, 2025
Velan Inc. has secured a significant order exceeding $20 million CAD from Ontario Power Generation to supply Emergency Cooling Injection valves for the refurbishment of three reactors at the Pickering Nuclear Generation Station. This order undersc...
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.