Xtract One Technologies is “a turnaround story with teeth”, Ventum says

Xtract One Technologies (Xtract One Technologies Stock Quote, Chart, News, Analysts, Financials TSX:XTRA) may be nearing a significant financial milestone, with Ventum Capital calling the security tech firm a mispriced high-growth player on track to hit breakeven EBITDA within two quarters amid growing demand across its expanding markets.

In a May 5 corporate update, Ventum Capital Markets analyst Amr Ezzat maintained his Buy rating and $0.80 price target on Xtract One Technologies.

“We hosted a series of investor meetings with Xtract One Technologies last week. The discussions during these sessions have further reinforced our conviction in the company’s strategic direction and market positioning,” Ezzat said. “With a record backlog, accelerating revenue ramp, and growing vertical traction beyond sports, we believe Xtract is one of the most compelling asymmetric setups in Canadian small-cap tech today.

Founded in 2016 and headquartered in Toronto, Xtract One provides security solutions for various industries, including arenas and stadiums, schools, hospitals, ticket venues/attractions, casinos and manufacturing facilities.

Ezzat called Xtract One “a turnaround story with teeth,” crediting CEO Peter Evans and CFO Karen Hersh with rebuilding a fragmented tech platform into a focused physical security firm: “Since fiscal 2022, revenue has grown nearly five-fold, bookings ten-fold, and backlog eight-fold. Gross margins have held above 60%, while costs have grown only modestly. Yet the market still values Xtract as if it were burdened with legacy risks that no longer apply.”

Ezzat’s rating and target are driven by his reinforced conviction in Xtract’s strategic direction, record backlog, accelerating revenue ramp and expanding demand beyond its core sports venue market. Ezzat believes the company is nearing a profitability inflection point and remains undervalued relative to its growth prospects.

He said the company’s sales momentum has shifted into high gear.

“Xtract exited Q2/F25 with $37.1M in combined backlog and signed agreements pending installation, up 67% year over year and 38% quarter over quarter — a clear setup for revenue acceleration in the back half. We’re forecasting $11M in revenue in the second half of the fiscal year, compared to $7M in the first half. This momentum is being driven by growing channel contribution, which accounted for half of all system deployments last quarter.”

Ezzat expects Xtract to post an Adjusted EBITDA loss of $4.3-million on revenue of $18.1-million in fiscal 2025. He forecasts those figures improving to $1.7-million in EBITDA on $29.8-million in revenue for fiscal 2026.

He said the company is past its early-stage risk phase and is now entering a period of operational leverage.

“Xtract’s platform is no longer in proof-of-concept mode — it’s deployed, trusted, and scaling. Bookings and backlog have surged as adoption accelerates. With gross margins above 60% and a lean cost base, we see breakeven EBITDA within two quarters. This is a structurally de-risked business still priced like it’s in its infancy — a disconnect we believe won’t last.”

He said demand for Xtract’s threat detection platform is now coming from far more than stadiums. “This is no longer just a stadium security story,” he said. “In the last two years, Xtract has expanded into education, healthcare, and manufacturing. School districts, hospitals, and factories are actively deploying the technology, and inbound demand from these sectors isn’t just strong—it’s accelerating.”

As for tariffs, Ezzat noted the company is insulated under USMCA. “That means it’s not exposed to the recent U.S. tariffs targeting Southeast Asian imports. That reduces supply chain risk and protects gross margins.”

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