Baylin Technologies price target cut at Paradigm

Paradigm Capital analyst Daniel Rosenberg has maintained a “Speculative Buy” rating on Baylin Technologies (Baylin Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:BYL) but lowered his 12-month price target to $0.30 from $0.35, saying in a June 1 note that while the company’s turnaround is gaining traction, progress will take time amid ongoing balance sheet concerns.

Baylin reported Q1 revenue of $18.9-million, down 5.9% year-over-year and below Paradigm’s $19.6-million estimate. Adjusted EBITDA was $0.7-million, slightly ahead of the $0.5-million forecast, with margins supported by a favourable product mix in higher-margin wireless infrastructure. The Q1 backlog rose to $32.5-million from $30.2-million in the previous quarter.

Baylin ended the quarter with $6.0-million in cash and $22.6-million in total debt. After quarter-end, it amended and extended its $15-million secured revolving credit facility to January 31, 2026, with terms mostly unchanged except for a new minimum EBITDA covenant. The interest rate was 10.50% on U.S. dollar advances and 7.45% on Canadian dollar advances, with $12.9-million drawn as of Q1.

The company announced an amendment to its credit facility following the release of its Q1 results.

“This provides the company with more flexibility as it navigates the volatile macro environment,” Rosenberg said in his note. “The terms of the facility remain largely unchanged, which we view as positive considering the macro environment. During the quarter, BYL adjusted its growth expectations due to slower overall demand. Management estimates direct tariff impacts to the Wireless Infrastructure business of ~30%. The Embedded Antenna and Satcom businesses are not expected to be directly impacted by tariffs.”

Baylin also completed the sale of its Mobile and Network business unit to a strategic acquirer in Korea at the end of last year.

“Recall, the division had been under review since May 2023 and was recently classified as held-for-sale on the balance sheet at $7.1M in assets and $9.0M in debt,” Rosenberg said in his note. “The division was volatile given customer concentration with a single large mobile phone manufacturer who, of late, had reduced orders given market demand. In 2023, the unit generated a $5.6M net loss. We view the divestiture positively as it will allow BYL to focus on its higher-value businesses lines.”

Rosenberg expects Baylin to generate $2.6-million in Adjusted EBITDA on $81.9-million in revenue for fiscal 2025, down from prior estimates of $5-million and $83.4-million. For 2026, he forecasts an improvement to $7.1-million in EBITDA on $83.7-million in revenue, slightly below his previous projections of $7.2-million and $88.4-million.

He said Baylin’s management continues to see momentum in the infrastructure business, though higher tariff costs remain a challenge.

“The company’s restructuring efforts to increase margins over the past year allows it to better navigate tariffs,” he said. “The Embedded Antenna and Satcom units are expected to deliver lower revenue than 2024. Overall, for 2025, management is calling for a similar level of performance compared to 2024.”

Founded in 1978, Baylin Technologies designs and manufactures custom antenna solutions for mobile, wireless infrastructure, and broadband devices. The company has expanded its capabilities through two major acquisitions, adding active and passive RF/microwave components to its offerings.

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