TSX:VCM

Stock Analysis Report

Vecima Networks

Executive Summary

Vecima Networks Inc. provides technology solutions that empower network service providers and content providers to connect people and enterprises to information and entertainment worldwide.


Snowflake Analysis

Excellent balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has Vecima Networks's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VCM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.7%

VCM

1.5%

CA Communications

1.6%

CA Market


1 Year Return

22.2%

VCM

0.6%

CA Communications

9.9%

CA Market

Return vs Industry: VCM exceeded the Canadian Communications industry which returned -1.5% over the past year.

Return vs Market: VCM exceeded the Canadian Market which returned 10.4% over the past year.


Shareholder returns

VCMIndustryMarket
7 Day0.7%1.5%1.6%
30 Day1.6%3.2%2.9%
90 Day9.0%4.8%6.4%
1 Year25.1%22.2%1.1%0.6%13.5%9.9%
3 Year12.5%4.8%-4.5%-6.4%17.4%6.7%
5 Year16.7%4.4%-34.2%-36.6%36.5%16.4%

Price Volatility Vs. Market

How volatile is Vecima Networks's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Vecima Networks undervalued compared to its fair value and its price relative to the market?

28.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VCM (CA$10.4) is trading below our estimate of fair value (CA$14.67)

Significantly Below Fair Value: VCM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VCM is unprofitable, so we can't compare its PE Ratio to the Communications industry average.

PE vs Market: VCM is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate VCM's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: VCM is overvalued based on its PB Ratio (1.3x) compared to the CA Communications industry average (1.3x).


Next Steps

Future Growth

How is Vecima Networks forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

153.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VCM is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: VCM is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: VCM is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: VCM's revenue (32% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: VCM's revenue (32% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if VCM's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Vecima Networks performed over the past 5 years?

-47.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VCM is currently unprofitable.

Growing Profit Margin: VCM is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: VCM is unprofitable, and losses have increased over the past 5 years at a rate of -47% per year.

Accelerating Growth: Unable to compare VCM's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: VCM is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (12.6%).


Return on Equity

High ROE: VCM has a negative Return on Equity (-2.1%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Vecima Networks's financial position?


Financial Position Analysis

Short Term Liabilities: VCM's short term assets (CA$72.4M) exceed its short term liabilities (CA$17.6M).

Long Term Liabilities: VCM's short term assets (CA$72.4M) exceed its long term liabilities (CA$7.2M).


Debt to Equity History and Analysis

Debt Level: VCM's debt to equity ratio (1.1%) is considered satisfactory.

Reducing Debt: VCM's debt to equity ratio has reduced from 2.1% to 1.1% over the past 5 years.

Debt Coverage: VCM's debt is well covered by operating cash flow (588.1%).

Interest Coverage: Insufficient data to determine if VCM's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: VCM has a low level of unsold assets or inventory.

Debt Coverage by Assets: VCM's debt is covered by short term assets (assets are 38.2x debt).


Next Steps

Dividend

What is Vecima Networks's current dividend yield, its reliability and sustainability?

2.10%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.9%markettop25%5.4%industryaverage2.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: VCM's dividend (2.12%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: VCM's dividend (2.12%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, VCM has been paying a dividend for less than 10 years.

Growing Dividend: VCM's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: VCM is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Vecima Networks's salary, the management and board of directors tenure and is there insider trading?

2.4yrs

Average management tenure


CEO

Sumit Kumar 0

6.4yrs

Tenure

CA$330,509

Compensation

Mr. Sumit Kumar has been the Chief Executive Officer and President at Vecima Networks Inc. since August 1, 2013 and 2011 respectively. Mr. Kumar work closely with the senior management team and the Board o ...


CEO Compensation Analysis

Compensation vs Market: Sumit's total compensation ($USD252.97K) is below average for companies of similar size in the Canadian market ($USD672.22K).

Compensation vs Earnings: Sumit's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

2.4yrs

Average Tenure

Experienced Management: VCM's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

2.6yrs

Average Tenure

54.5yo

Average Age

Experienced Board: VCM's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: VCM insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellCA$1,880,00031 Oct 19
Hugh Wood
EntityIndividual
Shares200,000
Max PriceCA$9.40
SellCA$1,880,00030 Oct 19
Hugh Wood
EntityIndividual
Shares200,000
Max PriceCA$9.40
SellCA$1,88026 Feb 19
Surinder Kumar
EntityIndividual
Role
Chairman of the Board
Founder & Chairman of the Board
Shares200
Max PriceCA$9.40

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Surinder Kumar

    Founder & Chairman of the Board

    • Tenure: 6.4yrs
    • Compensation: CA$72.60k
  • Dale Booth

    Chief Financial Officer

    • Tenure: 0.3yrs
  • Richard Blenkinsop

    Senior Vice President of Business Development

    • Compensation: CA$230.75k
  • Sumit Kumar

    CEO, President & Non Independent Director

    • Tenure: 6.4yrs
    • Compensation: CA$330.51k
  • Peter Torn

    General Counsel & Corporate Secretary

    • Mark DePietro

      Senior Vice President of Marketing

      • Tenure: 3.4yrs
      • Compensation: CA$249.05k
    • David Hobb

      Vice President of Operations

      • Tenure: 2.7yrs
    • Clay McCreery

      Chief Revenue Officer

      • Tenure: 2.1yrs
      • Compensation: CA$619.03k
    • Dan Gledhill

      Vice President of Sales

      • Tenure: 2.1yrs
      • Compensation: CA$441.95k
    • Osamu Nakamura

      President of Concurrent Content Solutions Corporation

      • Tenure: 2.1yrs
      • Compensation: CA$324.70k

    Board Members

    • Danial Faizullabhoy (57yo)

      Independent Director

      • Tenure: 3.1yrs
      • Compensation: CA$42.05k
    • T. Elliott (66yo)

      Lead Independent Director

      • Tenure: 1yrs
      • Compensation: CA$38.50k
    • Surinder Kumar

      Founder & Chairman of the Board

      • Tenure: 6.4yrs
      • Compensation: CA$72.60k
    • Sumit Kumar

      CEO, President & Non Independent Director

      • Tenure: 6.4yrs
      • Compensation: CA$330.51k
    • Derek Elder (48yo)

      Independent Director

      • Tenure: 1.4yrs
      • Compensation: CA$27.35k
    • Ben Colabrese (52yo)

      Independent Director

      • Tenure: 2.2yrs
      • Compensation: CA$29.00k

    Company Information

    Vecima Networks Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Vecima Networks Inc.
    • Ticker: VCM
    • Exchange: TSX
    • Founded: 1988
    • Industry: Communications Equipment
    • Sector: Tech
    • Market Cap: CA$234.224m
    • Shares outstanding: 22.39m
    • Website: https://www.vecima.com

    Number of Employees


    Location

    • Vecima Networks Inc.
    • 771 Vanalman Avenue
    • Victoria
    • British Columbia
    • V8Z 3B8
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    VCMTSX (The Toronto Stock Exchange)YesCommon SharesCACADNov 2005
    VNWT.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDNov 2005

    Biography

    Vecima Networks Inc. provides technology solutions that empower network service providers and content providers to connect people and enterprises to information and entertainment worldwide. It offers products for the cable and broadcast industries, which provides video and broadband access to service providers, content creators, and broadcasters. The company operates through three segments: Video and Broadband Solutions, Content Delivery and Storage, and Telematics. The Video and Broadband Solutions segment offers platforms and modules that process data from the cable network and deliver in formats suitable to be consumed on televisions and Internet devices. Its principal products include Terrace and TerraceQAM, which are designed to meet the needs of the business services verticals, such as multi-unit dwellings, hotels, motels, and resorts; and Entra distributed access platform that addresses the network migration to a distributed access architecture. The Content Delivery and Storage segment offers solutions and software for industries and customers that focus on ingesting, producing, storing, delivering, and streaming video content for live linear, video on demand (VOD), network digital video recorder (nDVR), and time-shifted TV services under the MediaScaleX and ContentAgent brands. The Telematics segment provides information and analytics for the fleet managers to manage their mobile and fixed assets under the Contigo, Nero Global Tracking, and FleetLynx brands. Vecima Networks Inc. was founded in 1988 and is headquartered in Victoria, Canada. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/18 00:00
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2019/06/30


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.