This small Canadian tech stock is a buy, analyst says

Paradigm Capital analyst Daniel Rosenberg initiated coverage of Sangoma Technologies (Sangoma Technologies Stock Quote, Chart, News, Analysts, Financials TSX:STC) with a “Buy” rating and C$12.00 price target, saying the company’s restructuring under new leadership has created a more efficient operating platform and a clearer path to profitable growth.

In his Nov. 18 initiation report, Rosenberg said Sangoma’s integrated communications suite, spanning cloud, hybrid and on-premises deployments, positions the company to take share in an underserved mid-market segment at a time when larger incumbents are retrenching.

He said recent challenges facing competitors have created meaningful “white space” for Sangoma to fill.

Founded in 1984 in Markham, Ontario, Sangoma evolved from a supplier of circuit boards for Public Branch Exchange systems into a global unified-communications provider serving more than 100,000 customers and 2.6 million UC seats across 187 countries.

Rosenberg said the company has been remade over the past year following the appointment of CEO Charles Salameh in September 2023. Eleven acquired businesses were consolidated into six business lines, supported by upgraded ERP and CRM systems. The restructuring wrapped up in May 2025 and is expected to yield about US$5-million in operating savings over three years. Sangoma also divested a non-core third-party hardware reseller, a move Rosenberg said should lift recurring revenue to roughly 90%, push gross margins toward 75%, and nudge adjusted EBITDA margins toward 20%.

He said the competitive landscape is shifting in Sangoma’s favour. Legacy vendors such as Avaya, Mitel and NEC have stepped back from on-premises solutions to focus on cloud offerings for large enterprises, while smaller providers lack the company’s breadth. He estimated the mid-market opportunity at US$2-billion to US$3-billion and said Sangoma’s end-to-end offering makes it an attractive single-vendor partner for mid-sized organizations seeking enterprise-grade service. That backdrop has contributed to three consecutive quarters of sequential growth in on-prem UC revenues, with Rosenberg expecting further market-share gains.

With the restructuring complete, Rosenberg said Sangoma’s focus is now firmly on growth. The company has US$15.7-million in cash, US$42.8-million in debt, and US$25-million in undrawn credit facilities, with leverage reduced significantly over the past two years. He said Sangoma is now on “more stable financial ground” and could use M&A to accelerate its expansion, particularly by acquiring legacy communications vendors that could benefit from integration into Sangoma’s end-to-end platform.

Rosenberg is modelling Adjusted EBITDA of US$36.3-million on revenue of US$207.3-million in fiscal 2025, rising to US$41.0-million on US$236.7-million in fiscal 2026.

His C$12.00 target price is based on a blended valuation using a 7.75x EV/EBITDA multiple and a DCF with a 9.57% WACC and 2.0% terminal growth rate.

He said Sangoma is “at a turning point toward accelerated profitable growth,” supported by a favourable market backdrop and a more efficient, integrated operating model.

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