NanoXplore is a buy, Ventum Capital says

Ahead of the company’s fourth quarter results, Ventum Capital Markets analyst Amr Ezzat has maintained his “Buy” rating on NanoXplore (NanoXplore Stock Quote, Chart, News, Analysts, Financials TSX:GRA).

On September 18, after market close, GRA will report its fourth quarter and fiscal 2024 results.

The analyst ran down what he expects.

“We are going into Q4/F24 slightly above the Street on both sales and EBITDA (Composites) and anticipate a strong quarter to finish the fiscal year,” he explained. “We are calling for sales/EBITDA (Composites) of $38.3M/$1.7M (14.8% YoY growth, 4.3% margin) versus the Street at $37.8M/$1.3M (13.4% YoY growth, 3.4% margin). We forecast EBITDA from the Company’s Composites business to come in at $1.7M (4.3% margin) versus $1.3M (3.7% margin) last quarter, and $0.4M (1.4% margin) two quarters ago.”

In a research update to clients September 12, Ezzat maintained his “Buy” rating and price target of $4.00 on GRA, implying a return of 76.2% at the time of publication.

The analyst thinks GRA will post EBITDA of $1.1-million on revenue of $130.1-million in fiscal 2024. He expects those numbers will improve to EBITDA of $8.4-million on revenue of $159.1-million in fiscal 2025.

“We derive our $4.00/shr target price using a 15.0x EBITDA multiple on our forecasted F2028 EBITDA and apply a 15.0% discount rate to the resulting valuation. We opt for the longer-term approach given that NanoXplore is at an earlier stage in its lifecycle,” Ezzat added.