Carrier Connect Data may have “transformative” development, this analyst says

Beacon Securities analyst Gabriel Leung says Carrier Connect Data Solutions’ (Carrier Connect Data Solutions Stock Quote, Chart, News, Analysts, Financials TSXV:CCDS) new AI computing LOI could be transformative if converted into purchase orders.

In a July 13 update, Leung maintained his “Buy” rating and $3.00 target on Carrier Connect.

Vancouver-based Carrier Connect is a technology and infrastructure company focused on operating and consolidating data centres, particularly Tier II and Tier III facilities that provide colocation and data centre services.

Carrier Connect announced a non-binding letter of intent to place up to 25 megawatts of AI computing demand for a single customer within its global colocation data centre network over the next 12 months. The customer was not disclosed.

Leung said a full 25-megawatt deployment could generate about $95-million in annual recurring revenue for Carrier Connect, compared with its current ARR of about $6-million.

The LOI includes indicative base pricing, subject to location-specific negotiations, with three months of retained deposit payable on any purchase order. Carrier Connect said it will provide more details as purchase orders are executed.

The analyst said Carrier Connect currently has about 7.7 megawatts of capacity across its data centres, including the pending Rochester acquisition, with utilization averaging about 46%. Tofulfill purchase orders under the LOI, the company will need to add capacity.

“We understand a number of larger data center acquisitions are in the near-term M&A pipeline,” Leung said.

He said Carrier Connect could also use third-party data centre space to fulfill part of the LOI, though at lower gross margins.

“We view this as a potentially transformative event for Carrier Connect,” Leung said.

Leung said he will update his estimates as definitive purchase order information becomes available. He maintained his $3.00 target, based on nine times EV/full utilization sales, compared with peers at about 10.5 times.

The analyst expects Carrier Connect to generate negative Adjusted EBITDA of $1.1-million on revenue of $2.7-million in fiscal 2026, improving to negative Adjusted EBITDA of $100,000 on revenue of $5.5-million in fiscal 2027.

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