What are you thoughts about the latest report? I have shares in both TFSA and RRSP, would you sell and move onto another growth name? What do you suggest right now? When you have decided to switch to another name after an earnings report, do you sell right away or do you wait for the price to bounce back (or stabilize)? Thank you
EPS of 2c beat estimates of (nil). Revenue of $59.4M beat estimates of $58.6M. EBITDA of $11.4M beat estimates of $10.7M. TD lowered its target from $11 to $10. Revenue rose 2%. Gross margin was 67%. EBITDA margin was 19%, the highest in eight quarters. 500,000 shares were bought and cancelled. Debt is $48M, down about 40%. The quarter itself was fine.. But....2026 sales guidance was $200M+, down sharply from estimates in the $236M range. The stock decline is about exactly in line with the reduced guidance (15%). Considering the strong sector, the guidance is quite disappointing, and the stock momentum of course is as well. The small size of the company doesn't help either. While we would consider it 'OK', we would not see a need to own it right now. PNG we think would be right better.
Generally, on a disappointment where the stock decline matches new guidance, we would sell rather than wait.