Mathieu Martin - Stocks and Stones earnings preview Zedcor provides low and zero-emission mobile surveillance towers that offer protection for commercial and industrial applications.
To be fair, the company has executed flawlessly over the last few years and I've been very impressed by the management team. I'm not calling out Zedcor here due to fundamental underperformance but because its valuation is getting up there.
At $2.79 per share, the stock is up 381% this year. The market cap is now $267 million. Compare that to consensus estimates of $31 million in revenue and $10.6 million in EBITDA in 2024, and the valuation appears relatively high. Even on forward estimates calling for 65% revenue and 76% EBITDA growth, the valuation is over 5.5x EV/Revenue and 15x EV/EBITDA.
From my experience, even the best microcaps occasionally disappoint for one or two quarters. Who knows if Zedcor will continue on its trajectory? I hope they will. But one lousy quarter could see the stock take quite the beating at these multiples. I would watch this one carefully if I owned it.