EnWave: Buy, Sell or Hold?

Clarus Securities analyst Noel Atkinson says EnWave’s (EnWave Stock Quote, Chart, News, Analysts, Financials TSXV:ENW) sale of a second 120-kilowatt system to Mexican fruit and vegetable producer Procescir supports continued adoption of its microwave-drying technology.

In a July 8 update, Atkinson maintained his “Speculative Buy” rating and $0.75 target on EnWave.

EnWave announced the sale of a 120-kilowatt system to Procescir, about 12 months after delivering the company’s first 120-kilowatt unit. Atkinson said it is EnWave’s first large-scale system sale of fiscal 2026.

The analyst said list pricing for a 120-kilowatt unit is typically US$2.0-million to US$2.5-million, plus production royalties. Because the unit is in inventory, Atkinson expects a large portion of the revenue to be recognized in fiscal Q3.

Atkinson said Mexico is becoming an increasingly important market for EnWave equipment. Another Mexican food producer bought a 10-kilowatt system in fiscal Q1.

He also pointed to growing demand for dried snacks made with EnWave equipment. Key customer BranchOut Food announced July 2 that it had won a national everyday rollout in Sam’s Club in the U.S., worth US$8.0-million annually. Atkinson said that contract alone could drive $250,000 to $500,000 in additional annual royalties for EnWave.

He also sees potential for a global consumer packaged goods company, believed to be General Mills, to launch a new snack line using EnWave systems in calendar 2027.

“If the global CPG company moves forward next year with the launch of a new snack food line using ENW equipment, then our FY27e might prove conservative,” Atkinson said.

Atkinson lowered his fiscal 2026 forecast modestly after previously assuming two large-scale system sales in fiscal Q3. He still expects one large-scale system sale in fiscal Q4 and left his fiscal 2027 estimates unchanged.

Atkinson expects EnWave to generate negative Adjusted EBITDA of $1.5-million on revenue of $9.0-million in fiscal 2026, improving to Adjusted EBITDA of $3.7-million on revenue of $24.0-million in fiscal 2027.

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