Sabio Holdings is still a buy, this analyst says

Beacon Securities analyst Gabriel Leung said in a Nov. 25 update that Sabio Holdings (Sabio Holdings Stock Quote, Chart, News, Analysts, Financials TSXV:SBIO) delivered a weaker-than-expected third quarter but continues to show signs that revenue momentum could rebuild in 2026.

Leung maintained his “Buy” rating and C$0.80 target.

Sabio provides mobile and connected-TV advertising solutions, including targeting, reach, and analytics tools.

Leung said Q3 results “looked challenged,” with revenue of US$8.2-million and negative EBITDA of US$2.2-million, versus his forecasts of US$11.7-million and negative US$1-million.

He noted that Sabio’s switch to reporting programmatic transactions on a net basis had the effect of lowering revenue and cost of goods sold equally, keeping gross profit intact. On a gross basis, Q3 revenue would have been US$9.3-million.

Mobile ad revenue fell 47% year over year to US$1.8-million, while connected-TV revenue dropped 49% to US$6.2-million. But Leung said the comparison was distorted by a surge in political and advocacy spending last year; excluding that category, CTV gross revenue would have been up 2%.

He attributed the overall declines to “tough y/y comparables” and early budget shifts in several verticals ahead of U.S. tariff changes. Still, he highlighted several positives: programmatic revenue of US$1.9-million versus none a year ago, and a 240% increase in international revenue, which accounted for 19% of gross revenue.

The company expects Q4 to benefit from seasonal uplift, and Leung said Sabio indicated its Q1 2026 pipeline is up roughly 60% year over year, with next year’s U.S. midterm election cycle likely to provide another meaningful tailwind. Gross margin was 58.7%, down from 63% last year. Free cash flow was roughly US$1-million, and Sabio ended the quarter with US$2-million in cash against US$6.9-million in debt. After quarter-end, it raised C$1.28-million through a share issue.

Leung said he expects a “strong rebound” beginning in Q4 and continuing into 2026, driven by political spending, expanding programmatic revenue, and continued growth in international markets. His valuation is based on 10× CY26e EV/EBITDA.

He forecasts Sabio will post US$40.4-million in revenue and negative US$5.2-million in Adjusted EBITDA for fiscal 2025, improving to US$59.9-million in revenue and US$3.9-million in Adjusted EBITDA in fiscal 2026.

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