Cematrix. Buy, Sell or Hold?

Cematrix (Cematrix Stock Quote, Chart, News, Analysts, Financials TSXV:CEMX) will release its Q3 results on Nov. 5 after market close, with a conference call and webinar scheduled for Nov. 6 at 1 p.m. EST. Beacon Securities analyst Russell Stanley, who maintains a “Buy” rating and $0.55 target, said he expects a seasonally strong quarter supported by execution on large U.S. infrastructure projects.

Stanley reiterated on Oct. 3 that Q3 is “typically the strongest quarter of the year,” and he is looking for revenue of $16.0-million and Adjusted EBITDA of $2.1-million.

His forecast assumes sequential revenue growth of 50%, though he anticipates margins will moderate as project mix shifts. He noted that Q2 benefited from “a number of smaller, higher-margin projects.”

In contrast, Q3 reflects work that began in June on a major U.S. Midwest tunnel-grouting project and, starting in July, on the $22-million North Carolina project, which together provide a steadier revenue base over the next 12 months. Stanley expects gross margins to normalize to 25% in Q3 and is looking for $1.8-million in operating cash flow before working-capital changes.

Cematrix manufactures cellular concrete for infrastructure, industrial, and commercial construction projects across the U.S. and Canada. The Calgary-based company also has key offices in Chicago and Bellingham, Washington.

Stanley said he will be watching for a backlog update with the Q3 release. Cematrix exited Q2 with a $76-million backlog, and subsequent contract announcements have brought year-to-date awards to $44-million. As large-project execution ramps, Stanley expects the backlog to trend closer to a more typical 1.0x revenue versus 1.6x at June 30.

He also noted that the stock recently reached new 52-week highs and is trading at 5.6× his F2026 Adjusted EBITDA forecast, a 39%–41% discount to the 9.1–9.5× average among infrastructure, engineering, and cement producer peers.

Stanley said Cematrix should generate $6-million in Adjusted EBITDA on $49-million of revenue in fiscal 2025, improving to $10-million on $67-million in fiscal 2026.

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