Is NowVertical Group (TSXV:NOW) a buy?

Ventum Capital Markets analyst Rob Goff says NowVertical Group (NowVertical Group Stock Quote, Chart, News, Analysts, Financials TSXV:NOW) remains on track to strengthen organic growth under co-founder and interim CEO Andre Garber.

In an Aug. 18 update, Goff maintained his “Buy” rating on NowVertical but lowered his target to $0.30  from $0.42.

“We are maintaining our bullish outlook,” Goff said. “The quarterly results were both in line with our forecasts and supportive of our outlook.”

Goff said the lower target reflects tougher valuations as investors wait for confirmation of the CEO role and continued organic growth. His target is based on 3.3 times his 2027 EV/EBITDA estimate.

NowVertical reported Q2 revenue of $9.7-million and Adjusted EBITDA of $1.5-million, in line with Goff’s estimates of $9.6-million and $1.5-million. Consensus was $9.6-million and $1.4-million.

Revenue rose 18% year-over-year, while Adjusted EBITDA increased 41% from $1.0-million a year earlier.

Goff said management continues to shift the business away from lower-margin reselling toward higher-value data analytics and Google-related services.

Data analytics revenue rose 7% sequentially to $8.6-million, including $2.5-million of Google Cloud Platform revenue, up 10% from Q1.

Revenue from NowVertical’s top 30 strategic accounts grew about 24% year-over-year and represented 85% of total revenue, up from 80.7% a year earlier and 55% in 2024.

NowVertical generated $1-million of operating cash flow in the first half, compared with a $4-million use of cash a year earlier. The company ended Q2 with $3.9-million of cash and net debt of 1.8 times trailing-12-month Adjusted EBITDA.

Goff said acquisitions are unlikely in the near term, but the company is in a stronger position to consider higher-quality targets if organic growth continues.

The analyst expects NowVertical to generate Adjusted EBITDA of $6-million on revenue of $40-million in fiscal 2026, improving to Adjusted EBITDA of $8-million on revenue of $44-million in fiscal 2027.

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