This analyst just chopped his price target on Haivision

Beacon Securities analyst Donangelo Volpe says Haivision Systems’ (Haivision Systems Stock Quote, Chart, News, Analysts, Financials TSX:HAI) second-quarter results were hit by margin pressure and delayed conversion of larger opportunities, prompting him to lower his target.

In a June 12 update, Volpe maintained his “Buy” rating on Haivision but cut his target to $7.50 from $12.25. His revised target is based on an unchanged 12-times fiscal 2027 Adjusted EBITDA multiple, applied to a lower fiscal 2027 Adjusted EBITDA forecast of $18.0-million, down from $31.0-million.

“The weaker outlook reflects a reduction in guidance and further delays in the conversion of large opportunities, with management now expecting a return to double-digit growth beginning in 2028,” Volpe said. “Importantly, we believe the primary issue remains one of timing rather than demand, particularly within the defence segment.”

Haivision reported Q2 revenue of $32.5-million, down 8% sequentially and 5% year-over-year, roughly in line with expectations. But Adjusted EBITDA of $300,000 missed both Volpe’s and consensus estimates of $1.5-million, while EPS came in at a loss of seven cents per share.

Gross margin was 69%, below Volpe’s 72% estimate, due to an unfavourable product mix and supply-chain constraints that delayed higher-margin proprietary product shipments. Volpe said AI-driven demand for servers, memory, GPUs and other components is also increasing input costs.

Management lowered fiscal 2026 revenue guidance to $140-million to $142-million from more than $150-million previously, with double-digit growth now expected to resume in 2028. Volpe said the revision reflects slower defence procurement, weaker broadcast and enterprise spending, and ongoing supply-chain pressure.

Broadcast customers are delaying cloud, IP and remote-production investments, while enterprise buyers are prioritizing AI infrastructure, cybersecurity and cost optimization. Defence demand remains healthy, but procurement timelines have lengthened.

Following his estimate revisions, Volpe said Haivision trades at 0.8 times sales and 7.0 times fiscal 2027 Adjusted EBITDA, compared with peers at 3.0 times sales and 13.5 times Adjusted EBITDA.

“We remain constructive on the strategic opportunity over the long term while awaiting evidence of margin recovery and defence revenue acceleration,” Volpe said.

Volpe expects Haivision to generate Adjusted EBITDA of $10.1-million on revenue of $141.3-million in fiscal 2026, improving to Adjusted EBITDA of $18.0-million on revenue of $149.4-million in fiscal 2027.

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