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Westaim Corp (TSE:WED)
:WED
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Westaim (WED) AI Stock Analysis

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TSE:WED

Westaim

(WED)

Rating:61Neutral
Price Target:
Westaim's overall stock score reflects a combination of strong strategic initiatives and concerning financial performance. Although the company has a robust balance sheet, recent financial results show revenue declines and net losses, impacting its valuation negatively. However, significant corporate events and partnerships provide a positive outlook, suggesting potential for growth and improved market positioning in the asset management industry.

Westaim (WED) vs. iShares MSCI Canada ETF (EWC)

Westaim Business Overview & Revenue Model

Company DescriptionThe Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.
How the Company Makes MoneyWestaim makes money by investing in financial services companies with the potential for significant growth and profitability. The company generates revenue primarily through capital appreciation and dividends from its portfolio companies. Westaim's key revenue streams include returns on investments in insurance and asset management sectors. The company may also generate income through management fees or performance-based incentives from its investments. Strategic partnerships and acquisitions are significant factors contributing to Westaim's earnings, as they enable the company to enhance its investment portfolio and increase its value over time.

Westaim Financial Statement Overview

Summary
Westaim's financial performance shows a mixed picture. While the balance sheet is strong with no debt and high equity, the income statement reflects a significant revenue drop and net loss, signaling challenges. Cash flow is concerning due to negative operating cash flows, highlighting inefficiencies in cash generation.
Income Statement
60
Neutral
The income statement reveals a significant decline in total revenue from 2023 to 2024, dropping from $211.27 million to $39.23 million. Gross profit margin is solid when revenue is positive, but net profits have turned negative in 2024 with a net loss of $16.18 million, indicating challenges in achieving profitability. Previous years showed strong EBIT and EBITDA margins; however, the recent downturn could signal underlying business or market issues.
Balance Sheet
75
Positive
The balance sheet is robust, with a strong equity position and zero total debt in 2024, leading to a healthy equity ratio. Stockholders' equity remains high relative to total assets, underscoring financial stability. However, the drop in stockholders' equity from 2023 to 2024 suggests asset management challenges. The absence of debt indicates low financial leverage risk.
Cash Flow
50
Neutral
Cash flow metrics are concerning, with negative operating and free cash flows in 2024. The operating cash flow to net income ratio indicates inefficiencies in cash generation relative to income. The significant increase in investing cash flow in 2024 may have been a temporary boost but is not sustainable for operational liquidity.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue39.23M211.27M25.67M31.70M-27.47M
Gross Profit39.23M209.76M25.67M31.70M-27.47M
EBITDA-19.36M187.80M19.38M26.36M-32.00M
Net Income-16.18M183.98M17.96M28.21M-34.40M
Balance Sheet
Total Assets523.22M551.82M413.29M401.66M377.35M
Cash, Cash Equivalents and Short-Term Investments301.91M521.76M3.43M6.56M8.74M
Total Debt0.00128.00K261.00K413.00K541.00K
Total Liabilities25.80M33.48M50.22M53.98M56.83M
Stockholders Equity497.41M518.35M363.07M347.68M320.52M
Cash Flow
Free Cash Flow-46.57M-3.09M-2.46M-5.13M18.51M
Operating Cash Flow-46.57M-3.09M-2.46M-5.12M18.54M
Investing Cash Flow223.11M6.67M1.90M3.99M-32.04M
Financing Cash Flow-9.67M-64.20M-2.56M-1.05M0.00

Westaim Technical Analysis

Technical Analysis Sentiment
Negative
Last Price29.50
Price Trends
50DMA
31.28
Negative
100DMA
31.22
Negative
200DMA
30.65
Negative
Market Momentum
MACD
-0.40
Positive
RSI
34.61
Neutral
STOCH
39.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WED, the sentiment is Negative. The current price of 29.5 is below the 20-day moving average (MA) of 30.47, below the 50-day MA of 31.28, and below the 200-day MA of 30.65, indicating a bearish trend. The MACD of -0.40 indicates Positive momentum. The RSI at 34.61 is Neutral, neither overbought nor oversold. The STOCH value of 39.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WED.

Westaim Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
C$3.40B25.509.16%4.13%5.95%-1.42%
72
Outperform
C$7.91B13.265.40%<0.01%-10.83%-34.83%
71
Outperform
C$1.04B15.075.62%4.49%35.78%-24.67%
70
Neutral
C$136.84B43.5418.95%2.68%283.20%33.30%
68
Neutral
$17.10B11.449.70%3.58%11.11%-4.78%
65
Neutral
C$725.47M18.9013.09%11.15%3.59%-43.99%
61
Neutral
C$989.77M12.73-9.16%100.87%-110.30%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:WED
Westaim
29.46
5.52
23.06%
TSE:FSZ
Fiera Capital A
6.77
-1.20
-15.06%
TSE:ONEX
ONEX Corporation
114.03
19.05
20.06%
TSE:EIF
Exchange Income
65.91
19.93
43.34%
TSE:GCG
Guardian Capital
43.26
1.34
3.20%
TSE:BAM
Brookfield Asset Management Ltd. Class A
86.18
30.61
55.08%

Westaim Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Westaim Announces Investor Day and Shareholders Meeting for June 2025
Positive
May 1, 2025

Westaim Corporation announced its Annual Investor Day and Shareholders Meeting scheduled for June 12, 2025, in Toronto, Canada. The event will feature a business overview and discussions with management teams from Westaim, Arena, Ceres Life Insurance Company, and CC Capital Partners, followed by a Q&A session. This initiative reflects Westaim’s commitment to transparency and engagement with its stakeholders, potentially enhancing its market position and shareholder relations.

Spark’s Take on TSE:WED Stock

According to Spark, TipRanks’ AI Analyst, TSE:WED is a Neutral.

Westaim’s stock score reflects mixed financial performance with strong balance sheet but declining revenues and profits. Technical indicators point to a bearish trend, and valuation suggests overvaluation. However, strategic corporate events such as the CC Capital deal are positive, potentially offsetting some financial and technical concerns. The overall outlook requires cautious optimism with an eye on strategic execution.

To see Spark’s full report on TSE:WED stock, click here.

Executive/Board ChangesPrivate Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Westaim and CC Capital Finalize Transformative Insurance and Asset Management Deal
Positive
Apr 3, 2025

Westaim Corporation, in partnership with CC Capital, has completed a significant transaction that transforms it into an integrated insurance and asset management platform. This strategic move, supported by a $250 million investment from CC Capital, brings together Westaim, Arena Investors, and Ceres Life Insurance Company to create a unified platform expected to drive growth and stability. The transaction is anticipated to generate significant value for shareholders and redefine the annuities industry by providing scalable, cloud-native solutions. The new structure includes key leadership appointments and board expansions, positioning Westaim for long-term growth and enhanced service delivery to retirees and investors.

M&A TransactionsBusiness Operations and StrategyRegulatory Filings and Compliance
Westaim Secures Regulatory Approvals for CC Capital Transaction
Positive
Mar 27, 2025

Westaim Corporation has announced the receipt of all necessary regulatory approvals for its proposed transaction with CC Capital Partners, which is expected to close around April 2, 2025. This transaction is a crucial step in Westaim’s strategy to build an integrated insurance and asset management platform, potentially enhancing its market position and offering significant implications for stakeholders.

Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Westaim Corporation Reports 2024 Financial Results Amid Strategic Restructuring
Negative
Mar 26, 2025

Westaim Corporation reported a net loss of $21.3 million for Q4 2024 and $16.2 million for the full year, contrasting with profits in the previous year. The company is undergoing significant changes, including a strategic $250 million investment agreement with CC Capital and a jurisdictional shift from Alberta to Delaware. These developments, along with financial restructuring, aim to enhance Westaim’s market position and operational efficiency, although the immediate financial results reflect challenges.

M&A TransactionsBusiness Operations and Strategy
Westaim Completes Acquisition of ManhattanLife Insurance
Positive
Feb 5, 2025

Westaim Corporation has completed its acquisition of ManhattanLife of America Insurance Company through its partnership with CC Capital Partners. This acquisition is a strategic move to build an integrated insurance and asset management platform, enhancing Westaim’s presence in the financial services industry and potentially impacting its market positioning and shareholder value.

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.Date of analysis: May 02, 2025