Russell Stanley, Managing Director, Equity Research at Beacon Securities believes that the company’s record $20.4 million revenue third quarter  was the catalyst that jump-started the resurgence of street attention, which is evident with the stock price up nearly 60% since the earnings release on November 8th.

Mr. Stanley believes there is still significant upside calling for a BUY rating with a twelve month target price of $0.60 based on his estimate of $56M in revenue and $6M EBITDA for 2024.

The detailed report outlines that CEMATRIX is expecting continued strong demand for its cellular concrete solutions and that CEMATRIX can capitalize on President Biden’s $1.2T infrastructure bill with $110B of that to be spent on roads, bridges and major transportation projects.

It is also mentioned that CEMATRIX has enough equipment to support continued growth to $200M+ per year in revenue. 

Mr. Stanley makes note on how the yearend could be shaping up with a section on “Q4 Should Be Strong Finish to F2023”.

“Q3 is traditionally the company’s strongest quarter of the year, with construction activity in the company’s coldest markets typically at its seasonal peak. CVX has traditionally realized approximately 35% of its full year revenue in H1, followed by 40% in Q3 and 25% in Q4. Nonetheless, management still predicted Q4 would be a record for the fourth quarter. In mid-November, the company reported it would exceed $40M in sales for F2023, implying Q4 revenue of at least $6M v. our forecast of $10M. We believe that our formal estimate of $10M could prove conservative, if good weather allows continued work late into Q4. 9 of the company’s 15 projects for $1M+ in F2023 are scheduled for at least some contribution during the quarter, with multiple sub-$1M projects expected to contribute as well. Cematrix is also working to mitigate seasonality by pursuing work in markets where construction activity is less seasonal (southern and western US) as well as tunnel grouting projects”.

Future catalysts are also contained in the report, which are important as they speak to potential upside in the stock, “Potential company-specific catalysts include further contract wins/backlog updates, M&A activity (as buyer and as a potential target), and the Q4 results in April 2024. We also believe the company could uplist to the TSX at some point next year.”

“As of mid-November, the company’s backlog exceeded $92M, and its sales pipeline was $425M, up from $380M at the beginning of the year. Over $40M of work on projects for $1M+ are already scheduled to be placed in F2024, with sub-$1M projects representing additional revenue potential”.