Sparq Systems (TSXV:SPRQ) is a buy, this analyst says

Beacon Securities analyst Donangelo Volpe has maintained a “Speculative Buy” rating and $2.00 target on Sparq Systems (SPARQ Systems Stock Quote, Chart, News, Analysts, Financials TSXV:SPRQ) after second-quarter results showed improving commercial activity ahead of what he expects will be a much larger production ramp in the second half of 2026.

Volpe noted that revenue rose to $983,000 from $253,000 in the first quarter and $163,000 a year earlier, with all sales coming from recurring microinverter deliveries under the company’s supply agreement with Jio.

His focus, however, remains on the $32-million purchase order announced in May, which he expects to drive a sharp increase in revenue over the next two quarters.

With about $1.2-million of revenue recorded in the first half, Volpe’s forecast implies roughly $23-million in second-half revenue.

“We continue to view the $32M order as transformational for the company,” he said in his Aug. 24 report, adding that successful execution could validate Sparq’s technology, manufacturing capabilities and relationship with Jio while improving the prospects for follow-on orders.

Gross profit in the quarter was $51,000, representing a 5% margin, while the company posted a $1.3-million net loss. Volpe said margins should improve as production volumes increase and per-unit costs decline.

“At this stage, we view quarterly profitability as less meaningful than progress toward achieving scaled production,” he said.

Sparq ended the quarter with $4.1-million in cash, $4.7-million in working capital and essentially no debt. Volpe believes the balance sheet is sufficient to support the near-term production ramp.

The analyst said successful execution of the existing Jio order could lead to follow-on business in late 2026 or early 2027, while India’s residential rooftop solar market and potential energy-storage orders represent additional upside.

Volpe expects Sparq to generate $24.0-million in revenue in fiscal 2026, with Adjusted EBITDA not considered meaningful, improving to $6.5-million in Adjusted EBITDA on revenue of $135.0-million in fiscal 2027.

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