Data Communications Management is undervalued, this analyst says

Clarus Securities analyst Noel Atkinson says a new labour agreement at Canada Post removes a recent revenue headwind for Data Communications Management (Data Communications Management Stock Quote, Chart, News, Analysts, Financials TSX:DCM).

In a June 2 update, Atkinson maintained his “Buy” rating and $3.25 target on DCM. He said his target is unchanged and is based on 6.0 times his 2027 Adjusted EBITDA estimate.

Atkinson said members of the Canadian Union of Postal Workers voted more than 85% in favour of ratifying a new collective agreement with Canada Post. DCM is Canada’s largest corporate materials printing services company, and Canada Post is one of DCM’s largest clients for in-branch corporate printed materials. Many DCM customers also use Canada Post for personalized mail and regulated account statement delivery.

CUPW and Canada Post had been in collective bargaining for two years, a period that included two multi-week strikes that cost DCM millions in revenue.

“The new labour deal removes any near-term headwind to DCM revenues from future Canada Post strikes and also should make it easier for other clients to incorporate direct mail programs into their 2027-2028 marketing budgets,” Atkinson said.

Atkinson said physical mail may also be seeing renewed interest, pointing to recent reports that Gen Z and Millennials are starting to write physical letters again, alongside the recovery of other physical media such as vinyl records. He said fatigue with online marketing could also help direct mail regain budget attention.

A 2026 study by Direct Response Media Group found 85% of Gen Z and Millennial respondents interacted with direct mail in 2025, a higher rate than Boomers. The study also found that integrated campaigns using direct mail follow-ups after initial digital outreach produced stronger marketing returns than digital follow-ups.

Atkinson said the Canada Post agreement removes one of the larger revenue risks to his 2026 forecast, though he remains watchful of U.S. tariff volatility as USMCA negotiations begin and weaker Canadian economic activity.

“We continue to project that DCM can return to modestly positive Y/o/Y revenue growth on a quarterly basis in H2/26e,” he said.

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

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