Cematrix keeps $0.75 price target at Beacon

Beacon Securities analyst Russell Stanley maintained a “Buy” rating and $0.75 target on Cematrix (Cematrix Stock Quote, Chart, News, Analysts, Financials TSX:CEMX), saying the stock’s post-results pullback has created another buying opportunity.

“We suspect some investors have overlooked the fact that Q1 is typically the softest quarter of the year, and their mistake is your opportunity,” Stanley said in his May 1 note.

Cematrix reported first-quarter revenue of $7.3-million and Adjusted EBITDA of negative $0.6-million, ahead of Stanley’s estimates of $5.0-million and negative $0.8-million. Margins were soft because of project mix and lower scale, but Stanley said management expects gross margins to move back toward the roughly 30% level achieved in fiscal 2025, excluding a restructured contract benefit.

Cash flow was stronger. Cematrix generated $4.6-million in operating cash flow, helped by accounts receivable collections, and ended the quarter with $15.7-million in cash, up from $11.9-million sequentially, with debt and leases of $3.1-million.

Stanley said backlog rose 4% sequentially to more than $70-million after $17.0-million in contract awards during the quarter. Management also said execution has started on the largest contract in backlog.

Stanley expects Cematrix to generate Adjusted EBITDA of $10-million on revenue of $60-million in fiscal 2026, improving to $14-million on revenue of $73-million in fiscal 2027.

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