Is Thermal Energy International (TSXV:TMG) a buy?

Beacon Securities analyst Russell Stanley says Thermal Energy International (Thermal Energy International Stock Quote, Chart, News, Analysts, Financials TSXV:TMG) is making progress on several growth initiatives, with record orders and a new beverage-sector contract supporting the outlook.

In a July 27 update, Stanley reiterated his “Buy” rating and $0.30 target on Thermal Energy.

Stanley said Thermal recently reported fiscal 2026 orders of $29.9-million, up 37% from $21.8-million in fiscal 2025 and slightly above the previous record of $29.5-million in fiscal 2024. Management cited strength across pharmaceuticals, food and beverage, and building materials.

Thermal also announced a $1.8-million turnkey heat recovery project with an international premium beer-and-beverage company. The FLU-ACE installation will recover waste heat from exhaust at two boilers and is expected to generate annual fuel savings of more than $400,000 while reducing CO2 emissions by about 975 tonnes. Revenue recognition is expected within seven to eight months.

Stanley said the order represents repeat business with the client and further penetration of the beverage market, where Thermal has worked with several large global breweries.

Thermal also provided updates on strategic initiatives launched last year, including standardized equipment packages for smaller projects, a streamlined HeatSponge turnkey offering, indirect sales channels in North America and Europe, European HeatSponge assembly, and its CREST platform for identifying energy savings and emissions-reduction opportunities.

Stanley said the stock trades at 3.8 times his calendar 2027 Adjusted EBITDA estimate, an 81% discount to the 20-times-plus multiple for Trane Technologies.

Potential catalysts include further contract wins, Q4 results in September and M&A activity.

Stanley expects Thermal to generate Adjusted EBITDA of $2.6-million on revenue of $36.4-million in fiscal 2026, improving to Adjusted EBITDA of $5.1-million on revenue of $45.5-million in fiscal 2027.

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