Velan Inc. SV (VLN) AI Stock Analysis

• Market Cap: C$325.08M
• Dividend Yield: 3.06%
• Average Volume (3M): 7.26K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.93
• Revenue Growth: -18.71%
• EPS Growth: -845.27%
• Country: CA
• Employees: 1,617
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 0.19
• Shares Outstanding: 6,019,000
• 10 Day Avg. Volume: 9,119
• 30 Day Avg. Volume: 7,261
• PEG Ratio: -0.01
• Price to Book (P/B): 2.29
• Price to Sales (P/S): 0.76
• P/FCF Ratio: 14.11
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 47 Neutral
• Price Target: C$14.50 ▼(-21.71% Downside)

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.

Leadership in nuclear contracts

Winning a large, high‑spec nuclear contract validates technical certifications and supplier status in a high-barrier sector. Nuclear suppliers enjoy long project timelines, high aftermarket/service lifetime value, and repeatable qualification hurdles, supporting sustained margin and aftermarket revenue over multiple years.

Available liquidity and moderate leverage

A cash buffer and access to credit provide resilience through project timing shifts and working‑capital swings common in engineered equipment cycles. Moderate leverage and improved equity position help absorb shortfalls, fund normal operations, and support execution of strategic initiatives over the medium term.

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.

Declining revenue and weak operating profitability

A multi‑period revenue decline combined with negative operating profits signals structural challenges in demand mix or cost absorption. Sustained weak operating margins limit free cash generation and reinvestment, increasing vulnerability to industry downturns and reducing the ability to scale profitably.

Transaction costs and dividend suspension

Absorbing material transaction and change‑of‑control costs, while suspending dividends, materially reduces cash available for operations and signals near‑term capital retention. This elevates execution risk, strains stakeholder confidence, and may delay shareholder returns and strategic investments over the transaction period.

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 check valves, including pressure seal, cast steel, small forged, dual-plate check, bolted bonnet high pressure, cast stainless steel corrosion resistant, bonnetless, and knife gate valves, as well as maintenance valves for nuclear service; and quarter-turn valves, such as ball, metal-seated ball, high performance three-piece ball, general purpose ball, triple-offset, high performance cryogenic butterfly, coker ball, and cap-tight batch digester capping valves. The company also provides cast and small forged hydrofluoric acid valves; and bellows seal bolted bonnet high pressure, seal cast steel, and seal API small forged valves. In addition, it offers bimetallic and thermodynamic steam traps. The company serves nuclear power, power, oil and gas, refining, chemical, pulp and paper, marine, mining, LNG and cryogenics, and water and wastewater sectors. It primarily sells its products through independent third-party distributors and sales agents. The company was formerly known as Velan Engineering Ltd. and changed its name to Velan Inc. in February 1981. Velan Inc. was founded in 1950 and is headquartered in Montréal, Canada.

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, repair, and replacement parts, and valve automation solutions that cater to the growing demand for automated systems in industrial processes. Additionally, Velan has established partnerships with distributors and engineering firms, which help to expand its market reach and increase sales. The company also benefits from long-term contracts with major industrial clients, providing a stable revenue base.

Velan Inc. SV Financial Statement Overview

Summary

Overall fundamentals are pressured: revenue has been trending down and recent operating profitability is negative (weak cost absorption). The balance sheet looks reasonably levered, but earnings quality is questionable given volatile results and a major red flag in TTM cash conversion with very large negative operating and free cash flow.

Income Statement

Revenue has trended down over time, including a sharp contraction in TTM (Trailing-Twelve-Months) versus the last annual period. Gross margin has been relatively steady in the high‑20% range, but profitability below gross profit has been weak: recent periods show negative operating profit and negative EBITDA margins, signaling poor cost absorption and/or elevated operating charges. Net results are volatile—annual periods show sizable losses, while TTM (Trailing-Twelve-Months) shows positive net income but with an extremely thin net margin, suggesting the profit is likely driven by non-operating or one-time items rather than core operations.

Balance Sheet

Leverage appears moderate, with debt-to-equity consistently in a manageable range and total debt not outsized versus equity. Equity has also improved versus the most recent annual report, supporting balance-sheet resilience. The main concern is quality of returns: return on equity has been negative in multiple annual periods and then spikes sharply positive in TTM (Trailing-Twelve-Months), reinforcing that earnings are unstable and may not reflect steady operating performance.

Cash Flow

Cash generation is the key weakness. While some annual periods show positive operating and free cash flow, the pattern is inconsistent, and TTM (Trailing-Twelve-Months) shows very large negative operating cash flow and free cash flow. That level of cash burn materially increases funding risk and raises questions about working-capital swings and the sustainability of reported earnings, especially given the disconnect between positive net income (TTM) and deeply negative cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	294.70M	295.20M	346.82M	370.43M	411.24M	371.63M
Gross Profit	89.14M	84.92M	93.21M	112.47M	134.97M	88.13M
EBITDA	-5.94M	-72.80M	5.64M	-34.65M	50.61M	7.53M
Net Income	65.34M	-75.50M	-19.74M	-55.46M	-10.26M	-16.60M
Balance Sheet
Total Assets	343.08M	501.97M	479.39M	477.86M	508.43M	538.50M
Cash, Cash Equivalents and Short-Term Investments	36.70M	35.23M	41.72M	50.55M	62.74M	75.95M
Total Debt	35.84M	24.88M	41.42M	40.91M	44.02M	80.34M
Total Liabilities	156.51M	403.23M	296.13M	277.02M	242.92M	253.63M
Stockholders Equity	185.82M	97.86M	182.18M	199.89M	264.82M	281.18M
Cash Flow
Free Cash Flow	-184.54M	15.85M	-4.94M	-6.07M	9.25M	-2.44M
Operating Cash Flow	-178.15M	26.52M	4.30M	522.00K	17.87M	9.64M
Investing Cash Flow	172.01M	-10.28M	-14.13M	1.76M	-26.00K	-11.68M
Financing Cash Flow	-14.85M	-9.81M	-4.66M	-2.62M	-23.52M	-6.30M

Velan Inc. SV Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 16.69, above the 50-day MA of 17.58, and above the 200-day MA of 15.82, indicating a bearish trend. The MACD of -0.99 indicates Positive momentum. The RSI at 31.91 is Neutral, neither overbought nor oversold. The STOCH value of 40.02 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATS	66 Neutral	C$3.79B	-718.00	-0.27%	―	-5.59%	-104.09%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
REKO	52 Neutral	C$22.76M	17.22	3.19%	―	0.38%	―
VLN	47 Neutral	C$325.08M	-7.54	-27.70%	3.06%	-18.71%	-845.27%
BLDP	47 Neutral	$959.36M	-5.71	-18.07%	―	1.18%	62.71%
ENW	46 Neutral	C$39.77M	-77.91	-14.33%	―	69.04%	80.18%
PYR	46 Neutral	C$49.60M	-5.00	―	―	-6.83%	46.97%

Velan Inc. SV Corporate Events

Velan’s Controlling Stake Sold to Birch Hill in C$204 Million Deal

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 block at approximately C$204 million. The transaction, structured via a pre-closing share reorganization and executed under a private agreement exemption to takeover bid rules, is expected to close in the first half of 2026 pending regulatory approvals, and does not require Velan shareholder or financing conditions. Birch Hill plans to maintain Velan’s head office and substantial operations in Quebec while leveraging its capital and operational expertise to support Velan’s next phase of domestic and international growth. A special committee of independent directors, advised by external legal and financial experts, oversaw a strategic review and concluded that cooperating with Birch Hill to facilitate the deal is in the company’s best interests, underscoring expectations that the new ownership structure will enhance Velan’s competitiveness and long-term value creation for stakeholders.

The most recent analyst rating on (TSE:VLN) stock is a Hold with a C$19.00 price target. To see the full list of analyst forecasts on Velan Inc. SV stock, see the TSE:VLN Stock Forecast page.

Velan Returns to Profit as Backlog Grows and Ownership Change Looms

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 maintaining a net cash position of $20.2 million with about $86 million in available liquidity. Strong bookings of $77.9 million lifted the order backlog to $296.8 million, aided by a major nuclear contract in Canada, and management said the proposed transfer of the Velan family’s majority stake to Birch Hill Equity Partners should support faster execution of its growth strategy, even as higher work-in-process inventory temporarily increases working capital needs.

The most recent analyst rating on (TSE:VLN) stock is a Hold with a C$19.00 price target. To see the full list of analyst forecasts on Velan Inc. SV stock, see the TSE:VLN Stock Forecast page.

Velan Sets January 14 Date to Release Q3 2025 Results and Hold Analyst Call

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 investors and analysts, including phone dial-in, instant phone registration, and a webcast with replay availability, underscoring its ongoing efforts to maintain transparent communications with the financial community and other stakeholders.

The most recent analyst rating on (TSE:VLN) stock is a Hold with a C$16.50 price target. To see the full list of analyst forecasts on Velan Inc. SV stock, see the TSE:VLN Stock Forecast page.

Velan Inc. Secures Major Valve Order for Pickering Nuclear Station

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 underscores Velan’s longstanding commitment to safety and reliability in the nuclear industry, reinforcing its position as a trusted supplier and supporting global efforts to expand clean energy capacity.

The most recent analyst rating on (TSE:VLN) stock is a Hold with a C$16.50 price target. To see the full list of analyst forecasts on Velan Inc. SV stock, see the TSE:VLN Stock Forecast page.