Is DCM stock a buy right now?

Clarus Securities analyst Noel Atkinson said in a May 13 update that Data Communications Management (Data Communications Management Stock Quote, Chart, News, Analysts, Financials TSX:DCM) posted a solid first-quarter Adjusted EBITDA beat, with cost control offsetting softer revenue.

Revenue was $117.4-million, down 5% year-over-year and slightly below Atkinson’s $118.6-million forecast. Adjusted EBITDA was $19.1-million, up 2.7% year-over-year and ahead of his $17.9-million estimate, marking the first year-over-year increase in four quarters.

Atkinson said DCM kept a tight lid on SG&A and benefited from stronger product mix, with gross margin of 28.2% coming in 50 basis points above his forecast. Free cash flow was also strong at $10.7-million, helping reduce net debt by $10.8-million sequentially to $66.4-million.

He said business activity began the year quietly but improved through the quarter, exiting Q1 with better momentum. Atkinson still expects organic revenue growth to turn positive on a quarterly basis in the second half of 2026.

“Our baseline outlook remains that, so long as CUPW members ratify the new Canada Post labour agreement, the temperature of U.S.-Canada relations does not materially decline from current levels and that the Iran conflict can be stabilized so that energy prices do not cause a cascading inflation effect in Canada, DCM should be able to return to modestly positive y/y revenue growth on a quarterly basis in H2/26e,” Atkinson said.

Atkinson expects DATA to generate Adjusted EBITDA of $59.8-million on revenue of $446.4-million in fiscal 2026, improving to $65.3-million on revenue of $459.2-million in fiscal 2027.

The analyst has maintained his “Buy” rating and his $3.25 price target is unchanged and based on 6.0x 2027 estimated EV/Adjusted EBITDA.

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