Q: Thoughts about Enterprise Group's latest results? Any short term upside here, and would tariffs affect their valuation? Thanks.
5i Research Answer:
All of E's revenue is in western Canada, and it should not have direct tariff impact, though its costs could certainly rise if tariffs are placed on goods purchased. Q1 EPS of 4c beat estimates of 2c; revenue of $10.3M missed estimates of $11.4M. EBITDA of $4.4M beat estimates by 3.5%. EBITDA rose 43%; sales fell about 20%. Per share income fell 43%. Cash flow was $5M. The Q1 did at least show improvement from the preceeding Q4 quarter. The balance sheet remains strong. There is potential upside as the company has done some recent acquisitions which look good (comments posted). There should be decent earnings growth overall in 2025. Valuation of 15X is about reasonable for a small company with potential.