Calian Group has price target trimmed at Ventum

Following the company’s fourth quarter results, Ventum Capital Markets analyst Rob Goff has trimmed his price target on Calian Group (Calian Group Stock Quote, Chart, News, Analysts, Financials TSX:CGY), but has maintained his “Buy” rating on the stock.

On November 26, CGY reported its Q4, 2024 results. The company posted Adjusted EBITDA of $23-million on revenue of $181-million, a topline that was up 3%, year-over-year.

“We capped off FY24 with a record quarter,” CEO Kevin Ford said. “Revenues, gross margin and adjusted EBITDA all hit historical highs for the fourth quarter and the full year. During the year, we completed three strategic acquisitions, signed and acquired contracts valued at $785 million and expanded our product and service offering in new markets. We finished the year with revenues and adjusted EBITDA up 13% and 30%, respectively, on track with our three-year strategic plan of doubling our Adjusted EBITDA1 by the end of FY26. With tailwinds in our growth markets, a solid balance sheet and a strong pipeline of acquisitions, we are on track to achieve another record year in FY25.”

The analyst explained why he has cut his price target.

“Management is guiding to a slow start for F2025 and reflects a significant back-end recovery,” Goff wrote. “We are forecasting revenue below the low end of guidance as we conservatively await evidence supporting greater strength in H2/F25. Our EBITDA aligns with the low end of guidance on higher margins. With the quarter, we trimmed our F2025 revenues/EBITDA by $20M/$2.5M. We are forecasting F2025 revenue/EBITDA of $792.4M$272.1M/$97.1M against revenue/EBITDA guidance of $800M-880M/$96M-106M and the pre-quarter consensus for revenue/EBITDA of $829M/$96M. We believe the new definition of EBITDA (before share-based compensation and one-time M&A costs), will likely add ~$5M to EBITDA to the pre-quarter consensus. Applying a 7.0x EBITDA multiple to our $2.5M EBITDA trim would lower our PT by $1.50/shr. However, we elected to trim our PT by $2.00/shr to C$68.00 as we await confirmation of performance improvements in H2/F25.”