Catalyst Watch #34

This Week’s Most Actionable Microcap Press Releases in North America

Russell Stanley at Beacon raises PT on CEMX.TO from C$0.55 to C$0.65 on strong Q3.

Russell is still the only analyst covering the stock and is really doing a fantastic job.

For context, Q3 revenues came in at C$15.3M, with a large contract modification that allowed a customer to purchase its own cement having a negative C$4.1M impact.

On a pro forma basis, revenues were C$19.4M vs. Beacon’s C$17.3M and Byron Street’s C$20.5M ests.

Importantly, the contract adjustment had no effect on profitability, with adj. EBITDA at C$3.5M, compared to C$2.2M and C$3.8M estimated by Beacon and Byron Street, respectively.

Despite somewhat confusing wording in the release, the company reaffirmed its expectation for a record year, “clarifying” that this refers to adj. EBITDA, which has already surpassed its prior full-year record with one quarter still remaining.

However, if we account for the contract adjustment, which extends into Q4 and overlaps with the U.S. Midwest tunnel grouting project, it appears this aligns closely with what management had originally guided for.

In any case, investors should focus primarily on adj. EBITDA in the near term to avoid confusion. On that front, estimates are kept largely unchanged.

This Week’s Most Actionable Press Releases