TSXV:STC

Stock Analysis Report

Sangoma Technologies

Executive Summary

Sangoma Technologies Corporation develops, manufactures, distributes, and supports voice and data connectivity components for software-based communication applications worldwide.


Snowflake Analysis

Proven track record with reasonable growth potential.


Similar Companies

Share Price & News

How has Sangoma Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: STC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

14.6%

STC

4.4%

CA Communications

7.1%

CA Market


1 Year Return

-1.3%

STC

-32.9%

CA Communications

-25.3%

CA Market

Return vs Industry: STC exceeded the Canadian Communications industry which returned -28.9% over the past year.

Return vs Market: STC exceeded the Canadian Market which returned -22% over the past year.


Shareholder returns

STCIndustryMarket
7 Day14.6%4.4%7.1%
30 Day-37.9%-26.9%-24.1%
90 Day-38.7%-29.9%-26.7%
1 Year-1.3%-1.3%-32.5%-32.9%-22.9%-25.3%
3 Year156.9%156.9%-52.8%-53.6%-15.6%-23.4%
5 Year396.7%396.7%-52.0%-53.5%-3.2%-17.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Sangoma Technologies undervalued compared to its fair value and its price relative to the market?

37.71x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: STC (CA$1.49) is trading above our estimate of fair value (CA$0.71)

Significantly Below Fair Value: STC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: STC is poor value based on its PE Ratio (37.7x) compared to the Communications industry average (18.8x).

PE vs Market: STC is poor value based on its PE Ratio (37.7x) compared to the Canadian market (10.7x).


Price to Earnings Growth Ratio

PEG Ratio: STC is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: STC is overvalued based on its PB Ratio (1.6x) compared to the CA Communications industry average (1x).


Next Steps

Future Growth

How is Sangoma Technologies forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

98.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STC's forecast earnings growth (98.9% per year) is above the savings rate (1.4%).

Earnings vs Market: STC's earnings (98.9% per year) are forecast to grow faster than the Canadian market (7.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: STC's revenue (12.1% per year) is forecast to grow faster than the Canadian market (3.9% per year).

High Growth Revenue: STC's revenue (12.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Sangoma Technologies performed over the past 5 years?

39.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STC has a large one-off loss of CA$2.7M impacting its December 31 2019 financial results.

Growing Profit Margin: STC's current net profit margins (2%) are higher than last year (0.2%).


Past Earnings Growth Analysis

Earnings Trend: STC's earnings have grown significantly by 39.4% per year over the past 5 years.

Accelerating Growth: STC's earnings growth over the past year (1240.9%) exceeds its 5-year average (39.4% per year).

Earnings vs Industry: STC earnings growth over the past year (1240.9%) exceeded the Communications industry -9.5%.


Return on Equity

High ROE: STC's Return on Equity (3.4%) is considered low.


Next Steps

Financial Health

How is Sangoma Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: STC's short term assets (CA$42.2M) exceed its short term liabilities (CA$40.2M).

Long Term Liabilities: STC's short term assets (CA$42.2M) do not cover its long term liabilities (CA$51.0M).


Debt to Equity History and Analysis

Debt Level: STC's debt to equity ratio (62.3%) is considered high.

Reducing Debt: STC's debt to equity ratio has increased from 8.2% to 62.3% over the past 5 years.

Debt Coverage: STC's debt is not well covered by operating cash flow (18.3%).

Interest Coverage: STC's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet

Inventory Level: STC has a high level of physical assets or inventory.

Debt Coverage by Assets: STC's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is Sangoma Technologies's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate STC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate STC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if STC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if STC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of STC's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Bill Wignall

9.5s

Tenure

CA$732,000

Compensation

Mr. William J. Wignall, also known as Bill, B.ASc., P.Eng. has been the Chief Executive Officer and President at Sangoma Technologies Corp. since September 7, 2010. He served in senior management roles thr ...


CEO Compensation Analysis

Compensation vs Market: Bill's total compensation ($USD520.12K) is above average for companies of similar size in the Canadian market ($USD156.92K).

Compensation vs Earnings: Bill's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
William Wignall
President9.5yrsCA$732.00k0.74% CA$839.8k
David Moore
Chief Financial Officer9.42yrsCA$403.00k0.034% CA$38.9k
Nenad Corbic
Chief Technology Officer2.83yrsno datano data
John Tobia
VP of Mergers & Acquisitions and General Counselno datano datano data
Doug Vilim
Vice President of Global Salesno dataCA$230.89kno data
Jim Machi
Vice President of Marketingno datano datano data
David Deaton
Executive Vice President of Products & Services1.17yrsno datano data
Patrick Mazza
Chief Revenue Officerno datano datano data
Sebastian Kiely
President of VoIP Innovationsno datano datano data
Frederic Dickey
Vice President of Cloud Services1.5yrsno datano data

2.8yrs

Average Tenure

Experienced Management: STC's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William Wignall
President9.5yrsCA$732.00k0.74% CA$839.8k
Allan Brett
Independent Director4.25yrsCA$26.25k0.074% CA$84.2k
Yves Laliberté
Independent Director12.58yrsCA$26.25k0.092% CA$104.5k
David Mandelstam
Independent Chairman of the Boardno dataCA$41.25k5.13% CA$5.8m
Al Guarino
Independent Director5.83yrsCA$26.25k0.10% CA$117.0k

7.5yrs

Average Tenure

Experienced Board: STC's board of directors are considered experienced (7.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: STC insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 32.1%.


Top Shareholders

Company Information

Sangoma Technologies Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sangoma Technologies Corporation
  • Ticker: STC
  • Exchange: TSXV
  • Founded: 1984
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: CA$113.314m
  • Shares outstanding: 73.58m
  • Website: https://www.sangoma.com

Location

  • Sangoma Technologies Corporation
  • 100 Renfrew Drive
  • Suite 100
  • Markham
  • Ontario
  • L3R 9R6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STCTSXV (TSX Venture Exchange)YesCommon SharesCACADMay 2000
SAMO.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMay 2000
54GDB (Deutsche Boerse AG)YesCommon SharesDEEURMay 2000

Biography

Sangoma Technologies Corporation develops, manufactures, distributes, and supports voice and data connectivity components for software-based communication applications worldwide. The company offers Switchvox, a business phone system; PBXact, a phone system; Internet protocol (IP) phones; service provider and voice over Internet protocol gateways; Switchvox Cloud, a unified communications solution; PBXact Cloud, a cloud based private branch exchange service; SIPstation SIP Trunking, a hosted session initiation protocol trunking service; and FAXStation, a fax-over-IP solution. It also provides session border controllers; telephony and media transcoding cards; and open source communications software. The company serves small and medium sized businesses, enterprises, original equipment manufacturers, carriers, and service providers. Sangoma Technologies Corporation was founded in 1984 and is based in Markham, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 00:37
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
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.