VerticalScope Holdings, Inc. (FORA) AI Stock Analysis

• Market Cap: C$231.13M
• Dividend Yield: N/A
• Average Volume (3M): 43.26K
• Price to Earnings (P/E): 62.0
• Beta (1Y): 1.05
• Revenue Growth: 8.87%
• EPS Growth: N/A
• Country: CA
• Employees: 194
• Sector: Communication Services
• Sector Strength: 79
• Industry: Interactive Multi-Media
• EPS (TTM): 0.17
• Shares Outstanding: 18,444,094
• 10 Day Avg. Volume: 44,671
• 30 Day Avg. Volume: 43,258
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.36
• Price to Cash Flow (P/CF): 6.70
• P/FCF Ratio: 6.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$17.00
• Price Target Upside: 57.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

VerticalScope Holdings, Inc. has a balanced stock score driven by strong cash flow and improving operational metrics. However, concerns over revenue growth, a high P/E ratio, and mixed technical indicators temper the overall outlook. Positive earnings call highlights, particularly in advertising growth and MAU expansion, contribute to a favorable sentiment, but challenges in e-commerce revenue present risks.

Positive Factors

Financial Health

The company's balance sheet shows a rapid de-levering trend, with net debt/EBITDA reduced to 1.3x from 1.5x a quarter ago and 2.5x a year ago.

Revenue Growth

VerticalScope's revenues were up 14.7% year over year to $17.8M with a 21.3% increase in monthly active users, which drove 22% growth in digital advertising.

Negative Factors

ECommerce Performance

ECommerce revenues declined by 20.1% year over year due to lower eCommerce ARPU, resulting from declining commissions in home fitness and video streaming.

VerticalScope Holdings, Inc. Business Overview & Revenue Model

Company Description

VerticalScope Holdings, Inc. (FORA) is a digital media company that operates online communities and websites across various interest verticals. The company specializes in building and managing platforms that connect enthusiasts and niche audiences, providing a space for discussions, content sharing, and engagement. By leveraging its expertise in digital advertising and online community management, VerticalScope serves sectors such as automotive, technology, sports, and outdoor recreation.

How the Company Makes Money

VerticalScope Holdings, Inc. generates revenue primarily through digital advertising on its network of online communities and websites. The company monetizes its platforms by offering advertising solutions to brands and marketers looking to reach specific, engaged audiences. Key revenue streams include display advertising, sponsored content, and partnerships with advertisers seeking to leverage VerticalScope's extensive user base. Additionally, VerticalScope may earn income from subscription services or premium content offerings, although its primary focus remains on advertising revenue. Strategic partnerships with content creators and brands enhance its ability to attract and retain advertisers, contributing significantly to its earnings.

VerticalScope Holdings, Inc. Financial Statement Overview

Summary

VerticalScope Holdings, Inc. shows a mixed financial performance. While there is a positive trend in profitability with improving margins and strong cash flow generation, revenue growth remains a concern. The balance sheet is stable with manageable leverage, but debt management requires attention to maintain long-term financial health.

Income Statement

VerticalScope Holdings, Inc. shows a mixed performance in its income statement. The TTM data indicates a gross profit margin of 71.38%, which is strong. The net profit margin improved to 4.06% from a negative margin in the previous year, indicating a positive trend in profitability. However, the revenue growth rate shows a decrease from prior years, reflecting some challenges in revenue expansion. EBIT and EBITDA margins are positive, with a significant improvement in EBIT from negative to 11.23%. These improvements highlight operational enhancements, although the overall growth trajectory requires attention.

Balance Sheet

The balance sheet reveals moderate stability for VerticalScope Holdings, Inc. The debt-to-equity ratio is 0.55, indicating a manageable level of leverage. Stockholders' equity has grown, showing a positive equity ratio of 59.50%, which is stable. Return on equity stands at 3.33%, reflecting moderate profitability relative to equity. While these indicators suggest a stable financial position, the company must continue to manage its debt levels carefully to ensure long-term financial health.

Cash Flow

The cash flow statement presents a favorable outlook. The free cash flow growth rate is robust, moving from $13.25 million to $20.36 million in TTM, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is high at 8.21, indicating efficient cash conversion from earnings. The free cash flow to net income ratio is 7.49, underscoring strong cash flow relative to net income. These metrics highlight the company's effective cash management and ability to generate sufficient cash flow for operations and investments.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
67.05M	60.90M	80.49M	65.76M	56.92M	58.45M
	Gross Profit
47.86M	34.22M	45.67M	38.95M	35.46M	35.53M
	EBIT
7.53M	-2.99M	-20.29M	-6.76M	3.58M	2.24M
	EBITDA
22.19M	18.55M	14.71M	440.34K	8.54M	24.05M
	Net Income Common Stockholders
2.72M	-4.95M	-24.77M	-12.26M	-1.51M	-1.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.60M	6.02M	8.77M	20.49M	4.60M	5.11M
	Total Assets
87.68M	152.95M	177.56M	217.03M	87.68M	102.00M
	Total Debt
104.70M	61.52M	61.64M	84.06M	104.70M	115.16M
	Net Debt
100.10M	55.51M	52.87M	63.56M	100.10M	110.05M
	Total Liabilities
110.23M	72.27M	96.06M	120.79M	110.23M	125.00M
	Stockholders Equity
-22.54M	80.69M	81.50M	96.24M	-22.54M	-23.00M
Cash Flow		Free Cash Flow
20.36M	13.25M	10.92M	-4.09M	9.39M	10.90M
	Operating Cash Flow
22.32M	15.51M	20.64M	19.60M	14.10M	16.57M
	Investing Cash Flow
-1.92M	-17.07M	-9.66M	-87.76M	-3.45M	-5.65M
	Financing Cash Flow
-20.95M	-1.13M	-22.47M	84.40M	-11.19M	-21.91M

VerticalScope Holdings, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.80
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FORA, the sentiment is Negative. The current price of 10.8 is below the 20-day moving average (MA) of 12.59, below the 50-day MA of 11.95, and above the 200-day MA of 9.68, indicating a neutral trend. The MACD of -0.36 indicates Positive momentum. The RSI at 37.39 is Neutral, neither overbought nor oversold. The STOCH value of 25.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FORA.

VerticalScope Holdings, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FORA	60 Neutral	C$231.13M	61.96	3.45%	―	8.87%	―
STC	60 Neutral	C$225.07M	―	-2.60%	―	-2.76%	77.19%
Sector *	59 Neutral	$29.20B	0.14	-13.78%	4.02%	2.18%	-51.50%
RAY.A	57 Neutral	C$563.66M	―	-6.14%	3.54%	9.94%	-147.16%
TGO	45 Neutral	C$26.20M	―	-96.12%	―	1.15%	25.39%

VerticalScope Holdings, Inc. Corporate Events

VerticalScope Reports Strong Growth and Record User Numbers

VerticalScope Holdings, Inc. reported a significant rise in financial results for Q3 2024, with revenue climbing 15% to $17.8 million and monthly active users increasing by 21% to a record 122 million. The company’s digital advertising revenue was a key driver of this growth, supported by new partnerships and the rising demand for authentic perspectives on its platform. Additionally, VerticalScope improved its financial position by reducing debt and purchasing shares, paving the way for future growth opportunities.