This analyst loves EnWave Corp

In an April 7 note, Clarus Securities analyst Noel Atkinson maintained his “Speculative Buy” rating and $0.80 target on EnWave Corporation (EnWave Corporation Stock Quote, Chart, News, Analysts, Financials TSXV:ENW), saying a strong 2026 outlook from customer BranchOut Food supports the company’s royalty story even as large-system order timing remains slower than expected.

Atkinson said BranchOut Food, which uses EnWave’s systems and generates production royalties for the company, is projecting more than US$20-million in 2026 revenue, up 35% year-over-year, driven by new launches at Sam’s Club, Costco and Target, with a potential Walmart opportunity tied to high-fibre, high-protein products aimed at GLP-1 users. He added that BranchOut expects to bring its fourth large-scale EnWave machine online by late April and is also in talks with major European retailers and several large consumer packaged goods companies for private-label products.

Atkinson said the BranchOut update is encouraging because it highlights continued throughput growth at a meaningful royalty customer. He also noted that some of those private-label discussions involve another large EnWave customer, MicroDried, which could further support volume over time.

On the equipment side, however, Atkinson said no large-scale system sales were announced in EnWave’s fiscal second quarter ended March 31, despite his expectation for at least one order. EnWave’s larger 60kW, 100kW and 120kW dehydration systems typically sell for about US$1.5-million to US$2.5-million, and orders are usually disclosed immediately. He said geopolitical issues may be contributing to near-term order delays.

Even so, Atkinson said management remains upbeat on the large-system sales pipeline, including opportunities with existing customers. He added that recent 10kW machine sales to new buyers could lead to one or two follow-on orders for larger systems later this calendar year, while EnWave continues to pursue additional CPG customers in snacks, ingredients and pet products.

As a result, Atkinson lowered his fiscal 2026 estimates, now assuming four large-scale system orders this year versus seven previously, while leaving his fiscal 2027 outlook largely unchanged.

He said EnWave should post an Adjusted EBITDA loss of $0.1-million on revenue of $12.1-million in fiscal 2026, improving to Adjusted EBITDA of $4.3-million on revenue of $25.3-million in fiscal 2027.

Atkinson said his $0.80 target is based on a sum-of-the-parts valuation equivalent to about 4x expected fiscal 2027 enterprise value to revenue, which he said remains at a moderate discount to the current peer group average.

-30-