Paradigm trims price target on Haivision Systems

Paradigm Capital analyst Daniel Rosenberg says Haivision Systems (Haivision Stock Quote, Chart, News, Analysts, Financials TSX:HAI) could face near-term pressure from defence deployment delays and softer broadcasting demand, but it remains constructive on the company’s longer-term outlook.

In a June 5 research brief, the analyst maintained its “Buy” rating on Haivision while lowering its target to $9.25 from $11.00 ahead of the company’s second-quarter results, expected after market close on June 10.

“We expect a softer quarter, as we anticipate potential delays in defence-related deployments and softness in the broadcasting end-market,” Rosenberg said.

Haivision’s exposure to U.S. Navy programs could weigh on results, with active combat vessel deployments and changing shipbuilding priorities potentially affecting the timing of scheduled upgrades. In broadcasting, Paradigm said industry bellwethers are pointing to cost rationalization.

Despite those headwinds, Paradigm continues to favour Haivision because of its product leadership and exposure to favourable defence spending trends.

Rosenberg’s revised valuation uses a blend of a 12.0-times EV/EBITDA multiple and a discounted cash flow model with an 11% weighted average cost of capital and a two per cent terminal growth rate. Haivision shares trade at 5.4 times fiscal 2027 EV/EBITDA, compared with the peer median at 16.4 times.

“Despite near-term headwinds, we remain constructive on Haivision’s long-term outlook given its product leadership and exposure to favourable defense spending trends,” the analyts said.

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