Beacon raises price target on GRID to $5.50

Beacon Securities analyst Gabriel Leung maintained a “Buy” rating and raised his target price on Tantalus Systems (Tantalus Systems Holdings Stock Quote, Chart, News, Analysts, Financials TSXV:GRID) to C$5.50 from C$4.00 in a June 25 note, after the company announced the Indiana Municipal Power Agency will deploy its AI-powered TRUGrid Reliability and TRUGrid Transformer analytics across all 19 member utilities in its AMI program.

The TRUGrid analytics platform helps utilities improve grid reliability by using data to detect faults, optimize transformer use, and guide infrastructure upgrades. IMPA, a joint action agency, supplies wholesale power and services to municipal utilities in Indiana and Ohio.

“This deployment, which is funded by the Grid Resilience Grant Program, is the first validation that a JAA would activate Tantalus’ analytics offerings and make them available to member utilities, which should enable Tantalus to gain scale quickly,” Leung said.

In the near term, IMPA and Tantalus are expected to promote TRUGrid to IMPA’s 19 member utilities.

“Within those members, we understand some are existing utilities, which Tantalus will work to also upsell its TRUSense platform to help capture and analyze granular power quality data and offer behind the meter control / load management of smart devices,” Leung said. “For non-Tantalus utilities, we believe there will be an opportunity to upsell TRUConnect to replacing existing AMI infrastructure or TRUSense to install on top of existing (competitor) AMI hardware.”

Leung thinks that Tantalus will generate $1.3-million in Adjusted EBITDA on $51.5-million in revenue for fiscal 2025. He expects those figures to improve to $2.6-million in Adjusted EBITDA on $59.5-million in revenue in fiscal 2026.

“Overall, we believe today’s announcement highlights Tantalus’ accelerating momentum as the AMI vendor of choice (as evidenced by recent wins, along with its growing utility customer count),” he said. “We believe the icing on the cake could be the first large deployment its TRUSense Gateway platform (we believe the company already has a number of pilots in the market).

Tantalus Systems, based in Vancouver, provides smart grid technology to around 320 public power and electric co-op utilities.

Beacon now values Tantalus at 3.5x EV/Sales, up from 2.5x.

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