Cematrix is a buy, this analyst says

Beacon Securities analyst Russell Stanley maintained a “Buy” rating and $0.65 price target on Cematrix (Cematrix  Stock Quote, Chart, News, Analysts, Financials TSX:CEMX) in a Jan. 20 report, after the company announced $7.1-million in new contract awards.

The latest wins include three load-reducing fill projects — a highway improvement, a retaining wall, and a utilities job — along with multiple small- to mid-sized lightweight fill contracts in both Canada and the United States. Stanley noted that Cematrix has now announced roughly $14-million in awards in just over a month, including contracts disclosed in mid-December, with most of the associated work expected to be completed and recognized in fiscal 2026.

Management said bidding activity remains strong, with a robust sales pipeline extending “well into the future.”

Stanley said the awards mark a solid start to fiscal 2026 following total awards of just over $50-million in fiscal 2025. Cematrix exited the third quarter with a backlog of $75-million, despite generating seasonally strong revenue of $15.3-million, representing about 1.7x expected fiscal 2025 revenue. He expects the backlog ratio to trend closer to 1.0x over time as the company works through two unusually large projects.

Balance-sheet strength also continued to improve, with Cematrix generating $1.8-million in operating cash flow and $1.7-million in free cash flow in the third quarter. The company ended the period with $9.9-million in cash, modest debt of $1.6-million, and lease obligations of $2.2-million. With a modest capital expenditure profile—Beacon assumes about $0.6-million in fiscal 2026—Stanley said Cematrix is well positioned to fund organic growth and pursue small acquisitions.

On valuation, Stanley noted that Cematrix trades at about 5.2x his fiscal 2026 Adjusted EBITDA estimate, representing a 34% discount to infrastructure and engineering peers and a 53% discount to cement producers. He added that the shares are trending higher and testing an important resistance zone, with potential catalysts including additional contract wins, fourth-quarter results in March, and M&A activity.

Stanley forecasts Cematrix will generate about $8-million in Adjusted EBITDA on $45-million in revenue in fiscal 2025, improving to roughly $10-million in Adjusted EBITDA on $60-million in revenue in fiscal 2026.

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.

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