SANGOMA TECHNOLOGIES CORP(TSX:STC) stock Fundamental Analysis

Fundamental Rating

We assign a fundamental rating of 3 out of 10 to STC. STC was compared to 10 industry peers in the Communications Equipment industry. Both the profitability and financial health of STC have multiple concerns. STC does not seem to be growing, but still is valued expensively.

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1. Profitability

1.1 Basic Checks

In the past year STC has reported negative net income.

STC had a positive operating cash flow in the past year.

The reported net income has been mixed in the past 5 years: STC reported negative net income in multiple years.

Each year in the past 5 years STC had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of -1.81%, STC is in line with its industry, outperforming 60.00% of the companies in the same industry.

STC has a Return On Equity (-2.63%) which is in line with its industry peers.

		Industry Rank	Sector Rank
ROA	-1.81%
ROE	-2.63%
ROIC	N/A

ROA(3y)-10.31%

ROA(5y)-5.73%

ROE(3y)-17.31%

ROE(5y)-9.32%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

With an excellent Gross Margin value of 69.01%, STC belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.

In the last couple of years the Gross Margin of STC has grown nicely.

STC does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.

		Industry Rank	Sector Rank
OM	N/A
PM (TTM)	N/A
GM	69.01%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.9%

GM growth 5Y2.76%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

STC does not have a ROIC to compare to the WACC, probably because it is not profitable.

Compared to 1 year ago, STC has more shares outstanding

Compared to 5 years ago, STC has more shares outstanding

The debt/assets ratio for STC has been reduced compared to a year ago.

2.2 Solvency

STC has an Altman-Z score of 1.06. This is a bad value and indicates that STC is not financially healthy and even has some risk of bankruptcy.

Looking at the Altman-Z score, with a value of 1.06, STC is in line with its industry, outperforming 50.00% of the companies in the same industry.

The Debt to FCF ratio of STC is 1.71, which is an excellent value as it means it would take STC, only 1.71 years of fcf income to pay off all of its debts.

STC's Debt to FCF ratio of 1.71 is fine compared to the rest of the industry. STC outperforms 70.00% of its industry peers.

STC has a Debt/Equity ratio of 0.18. This is a healthy value indicating a solid balance between debt and equity.

Looking at the Debt to Equity ratio, with a value of 0.18, STC is in line with its industry, outperforming 50.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.18
Debt/FCF	1.71
Altman-Z	1.06

ROIC/WACCN/A

WACC7.95%

2.3 Liquidity

A Current Ratio of 0.86 indicates that STC may have some problems paying its short term obligations.

Looking at the Current ratio, with a value of 0.86, STC is doing worse than 80.00% of the companies in the same industry.

STC has a Quick Ratio of 0.86. This is a bad value and indicates that STC is not financially healthy enough and could expect problems in meeting its short term obligations.

STC has a worse Quick ratio (0.63) than 70.00% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.86
Quick Ratio	0.63

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

STC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.55%.

Looking at the last year, STC shows a decrease in Revenue. The Revenue has decreased by -4.17% in the last year.

The Revenue has been growing by 24.46% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)4.55%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%40%

Revenue 1Y (TTM)-4.17%

Revenue growth 3Y23.46%

Revenue growth 5Y24.46%

Sales Q2Q%-5.08%

3.2 Future

STC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 35.53% yearly.

STC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.74% yearly.

EPS Next Y33.96%

EPS Next 2Y35.53%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year-4.26%

Revenue Next 2Y-0.74%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for STC. In the last year negative earnings were reported.

Also next year STC is expected to report negative earnings again, which makes the also the Forward Price/Earnings Ratio negative.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	N/A

4.2 Price Multiples

90.00% of the companies in the same industry are more expensive than STC, based on the Enterprise Value to EBITDA ratio.

Compared to the rest of the industry, the Price/Free Cash Flow ratio of STC indicates a rather cheap valuation: STC is cheaper than 100.00% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	4.72
EV/EBITDA	5.58

4.3 Compensation for Growth

A more expensive valuation may be justified as STC's earnings are expected to grow with 35.53% in the coming years.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y35.53%

EPS Next 3YN/A

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5. Dividend

5.1 Amount

No dividends for STC!.

		Industry Rank	Sector Rank
Dividend Yield	N/A

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SANGOMA TECHNOLOGIES CORP

TSX:STC (5/2/2025, 7:00:00 PM)

7.98

+0.08 (+1.01%)

Chartmill FA Rating

GICS SectorInformation Technology

GICS IndustryGroupTechnology Hardware & Equipment

GICS IndustryCommunications Equipment

Earnings (Last)02-05 2025-02-05/amc

Earnings (Next)05-08 2025-05-08/amc

Inst Owners35.22%

Inst Owner ChangeN/A

Ins Owners26.88%

Ins Owner ChangeN/A

Market Cap268.37M

Analysts80

Price Target12.3 (54.14%)

Short Float %N/A

Short RatioN/A

Dividend

		Industry Rank	Sector Rank
Dividend Yield	N/A

Yearly DividendN/A

Dividend Growth(5Y)N/A

DPN/A

Div Incr Years0

Div Non Decr Years0

Ex-DateN/A

Surprises & Revisions

EPS beat(2)0

Avg EPS beat(2)-102.52%

Min EPS beat(2)-197.03%

Max EPS beat(2)-8.01%

EPS beat(4)1

Avg EPS beat(4)-64.27%

Min EPS beat(4)-197.03%

Max EPS beat(4)27.99%

EPS beat(8)3

Avg EPS beat(8)-59.15%

EPS beat(12)4

Avg EPS beat(12)-391.51%

EPS beat(16)5

Avg EPS beat(16)-324.61%

Revenue beat(2)0

Avg Revenue beat(2)-5.46%

Min Revenue beat(2)-7.66%

Max Revenue beat(2)-3.26%

Revenue beat(4)0

Avg Revenue beat(4)-3.27%

Min Revenue beat(4)-7.66%

Max Revenue beat(4)-0.9%

Revenue beat(8)2

Avg Revenue beat(8)-2.15%

Revenue beat(12)4

Avg Revenue beat(12)-0.77%

Revenue beat(16)7

Avg Revenue beat(16)0.86%

PT rev (1m)0%

PT rev (3m)3.76%

EPS NQ rev (1m)0%

EPS NQ rev (3m)0%

EPS NY rev (1m)0%

EPS NY rev (3m)-161.54%

Revenue NQ rev (1m)0%

Revenue NQ rev (3m)-5.52%

Revenue NY rev (1m)-0.12%

Revenue NY rev (3m)-6.37%

Valuation

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	N/A
P/S	0.8
P/FCF	4.72
P/OCF	3.79
P/B	0.75
P/tB	N/A
EV/EBITDA	5.58

EPS(TTM)-0.29

EYN/A

EPS(NY)-0.06

Fwd EYN/A

FCF(TTM)1.69

FCFY21.18%

OCF(TTM)2.11

OCFY26.39%

SpS9.91

BVpS10.57

TBVpS-1.88

PEG (NY)N/A

PEG (5Y)N/A

Profitability

		Industry Rank	Sector Rank
ROA	-1.81%
ROE	-2.63%
ROCE	N/A
ROIC	N/A
ROICexc	N/A
ROICexgc	N/A
OM	N/A
PM (TTM)	N/A
GM	69.01%
FCFM	17.05%

ROA(3y)-10.31%

ROA(5y)-5.73%

ROE(3y)-17.31%

ROE(5y)-9.32%

ROIC(3y)N/A

ROIC(5y)N/A

ROICexc(3y)N/A

ROICexc(5y)N/A

ROICexgc(3y)N/A

ROICexgc(5y)N/A

ROCE(3y)N/A

ROCE(5y)N/A

ROICexcg growth 3YN/A

ROICexcg growth 5YN/A

ROICexc growth 3YN/A

ROICexc growth 5YN/A

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.9%

GM growth 5Y2.76%

F-Score5

Asset Turnover0.65

Health

		Industry Rank	Sector Rank
Debt/Equity	0.18
Debt/FCF	1.71
Debt/EBITDA	1.02
Cap/Depr	22.22%
Cap/Sales	4.2%
Interest Coverage	N/A
Cash Conversion	115.6%
Profit Quality	N/A
Current Ratio	0.86
Quick Ratio	0.63
Altman-Z	1.06

F-Score5

WACC7.95%

ROIC/WACCN/A

Cap/Depr(3y)20.7%

Cap/Depr(5y)19.74%

Cap/Sales(3y)3.72%

Cap/Sales(5y)3.03%

Profit Quality(3y)N/A

Profit Quality(5y)N/A

High Growth Momentum

Growth

EPS 1Y (TTM)4.55%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%40%

EPS Next Y33.96%

EPS Next 2Y35.53%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue 1Y (TTM)-4.17%

Revenue growth 3Y23.46%

Revenue growth 5Y24.46%

Sales Q2Q%-5.08%

Revenue Next Year-4.26%

Revenue Next 2Y-0.74%

Revenue Next 3YN/A

Revenue Next 5YN/A

EBIT growth 1Y33.24%

EBIT growth 3YN/A

EBIT growth 5YN/A

EBIT Next Year4321.5%

EBIT Next 3YN/A

EBIT Next 5YN/A

FCF growth 1Y215.38%

FCF growth 3Y28.15%

FCF growth 5Y37.43%

OCF growth 1Y122.53%

OCF growth 3Y33.68%

OCF growth 5Y38.57%

SANGOMA TECHNOLOGIES CORP (STC.CA) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

More info and screens

2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

More info and screens

3. Growth

3.1 Past

3.2 Future

3.3 Evolution

More info and screens

4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

More info and screens

5. Dividend

5.1 Amount

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