This junior tech stock has an upside of 326%, analyst says

ATB Capital Markets analyst Martin Toner says investors will be looking for Zoomd Technologies (Zoomd Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:ZOMD) to show signs of a top-line recovery in Q2.

In a July 20 preview, Toner maintained his “Speculative Buy” rating and $2.00 target on Zoomd.

Zoomd’s Q1 revenue fell 62% year-over-year to $6.9-million after two major customers paused digital marketing campaigns because of a third-party cyberattack. Management described the decline as an anomaly.

Toner said the key focus for Q2 will be the pace of customer recovery. One affected client has gradually increased spending, while the other continues to provide limited visibility.

The analyst said investors will also look for evidence that returning campaigns and newly onboarded clients are beginning to reverse the revenue decline.

On costs, Toner said Q2 results should show the full impact of the company’s restructuring. Zoomd cut its workforce by 20% and reduced operating expenses in Q1, but the savings were not expected to fully materialize until Q2.

Toner said investors will watch whether operating expenses fall below the $3.0-million recorded in Q1 and whether Zoomd can return to positive Adjusted EBITDA after posting negative Adjusted EBITDA of $300,000 in the previous quarter.

Balance sheet strength remains a buffer. Zoomd entered Q2 with $22.5-million in cash, no bank debt and an unused $3.0-million credit line. Toner said investors will also watch progress on the company’s normal course issuer bid, launched in late May to repurchase up to 10% of the public float.

Business development will also be a focus, including Zoomd’s strategic partnership with Sharp Alpha, as the company works to reduce customer concentration risk.

Toner said major global advertising events could support a medium-term recovery, including the FIFA World Cup in North America, which is expected to drive higher digital advertising demand from global brands, sports entertainment apps and regional advertisers.

He expects Zoomd to generate Adjusted EBITDA of $500,000 on revenue of $31.4-million in fiscal 2026, improving to Adjusted EBITDA of $6.7-million on revenue of $32.3-million in fiscal 2027.

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