Sabio Holdings has way more upside, this analyst says

Following the release of preliminary financials, Beacon Securities analyst Gabriel Leung remains bullish on Sabio Holdings (Sabio Holdings Stock Quote, Chart, News, Analysts, Financials TSXV:SBIO).

On February 18, SBIO reported preliminary Q4 and fiscal 2024 results. The company said its full-year EBITDA would come in between (US) $3.6 and $3.8-million on revenue of between (US) $49.3 and $9.5-million, both figures would be a record for the firm.

“We are pleased to have delivered the best quarterly and annual financial results in Sabio’s history, having ended 2024 with nearly CAD$70 million2 in revenue,” CFO Sajid Premji said. “Normalizing for political ad sales, this increase was driven by ad-supported streaming that continues to grow at a double-digit rate. Our execution and focus to create a leaner cost structure enabled Sabio to achieve its highest Adjusted EBITDA1 margins as a public company while also making important investments to drive further growth. This includes expansion into fast-growing international markets and a new programmatic offering. Armed with a stronger balance sheet that reflects a healthier cash reserve and a materially reduced debt load, we are focused on strategic momentum. By leveraging our new product channels and expanding our geographical reach, we expect to achieve continued growth, with first quarter visibility indicating a double-digit growth rate.”

Leung says this is more evidence that Sabio has the ship in the right direction.

“Overall, we view the preliminary Q4 results as a continuation of the strong performance we saw with Sabio’s Q3 results,” he wrote. “We continue to believe that Sabio is back on the right track of growth leveraging its new products (such as Sabio Performance, Sabio Programmatic, and Creator TV) and new sales resources in international markets (notably Europe). We are maintaining our estimates pending the release of the full Q4 results (expected mid-to-late April). We maintain our Buy rating and C$1.50 target price, which is based on 10x CY26e EV/EBITDA.”

Leung thinks SBIO will post EBITDA of $3.0-million on revenue of $49.2-million in fiscal 2025. He expects those numbers will improve to EBITDA of $5.9-million on a topline of $57.0-million in fiscal 2026.

The analyst’s target implied a return of 150% at the time of publication.

Disclosure: Sabio is an annual sponsor of Cantech Letter.