Q: On the off chance a 100 others don’t ask, looking for an updated opinion on DRX after earnings miss. Still making money.
5i Research Answer:
EPS of $0.24 missed estimates of $0.36, but this was largely due to US tariffs directly compressing margins and creating fabrication delays that are largely timing-related, not structural. The balance sheet is in good shape with $46.1M in cash, the backlog is a very healthy $561M (plus another $157M announced last week), and the Groupe LAR acquisition adds Canadian hydroelectric exposure that reduces US tariff sensitivity over time. Management's tone was constructive, and the CFO flagged the second half of fiscal 2027 as when the LAR hydro contract starts contributing meaningfully. It continues to trade at a cheap valuation of 6.6X forward earnings, and recent momentum has been improving. We would be comfortable holding here.