Xtract One Technologies is a buy, Ventum says

Ventum Capital Markets analyst Amr Ezzat reiterated a “Buy” rating and $0.80 price target on Xtract One Technologies (Xtract One Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:XTRA) in a May 27 note, following the company’s latest SmartGateway deployment at Coors Field, home of the Colorado Rockies.

Ezzat said the move strengthens Xtract’s growing presence in professional sports and supports his view of the firm as a standout opportunity in Canadian small-cap tech.

Xtract One Technologies formerly Patriot One Technologies, develops weapon and threat detection systems for venues like stadiums, schools, casinos, offices and healthcare facilities. Founded in 2016, the company is based in Toronto and operates in North America and internationally.

With a capacity of 50,398, Coors Field turned to Xtract One’s SmartGateway AI-powered screening technology to replace traditional metal detectors. The system allows fans to pass through security up to seven times faster, reducing wait times and improving the game-day experience.

“While no financial details were disclosed, we believe this is likely a limited initial deployment, consistent with the company’s typical land-and-expand strategy in large venues,” Ezzat said. “With positive EBITDA expected over the next 2–3 quarters and momentum building across multiple verticals, we continue to view Xtract as one of the most compelling asymmetric setups in Canadian small-cap tech today.”

Ezzat said the Coors Field deployment adds to the company’s expanding presence in professional sports.

“The company already has deployments at Madison Square Garden (MSG), UBS Arena, the Moody Center and several other NBA, NHL, and minor league venues, creating a network of high-profile reference sites. MSG remains a strategic partner and 16% equity holder.”

Ezzat said Xtract’s success in the sports venue market comes from proven results and the ability to scale as clients steadily expand their use of the technology.

He believes that Xtract will post a loss of $4.3-million in Adjusted EBITDA on $18.1-million in revenue for fiscal 2025. He expects those numbers to improve to $1.7-million in EBITDA on $29.8-million in revenue in 2026 and further to $6.3-million in EBITDA on $39.4-million in revenue in 2027.

The analyst said Customers continue to adopt SmartGateway for its operational and economic benefits.

“At the Moody Center, Xtract replaced 42 metal detectors and 85 security staff with just nine lanes and 27 personnel, generating nearly $1M in annual net savings,” he said. “In addition to cost efficiencies, faster and frictionless entry improves the fan experience and supports higher venue-level revenue capture.”

Ezzat said Ventum’s $0.80 target for Xtract One is based on a DCF model and reflects the company’s strong growth outlook and expected move to profitability. At that price, Xtract would trade at what Ventum sees as attractive valuation levels, given its projected revenue growth of over 50% and improving margins.

“We believe this target fairly captures Xtract One’s risk-reward and see additional upside if the Company exceeds our base-case growth assumptions or accelerates its timeline to positive free cash flow,” he added.

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