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NTG Clarity Networks Inc (TSE:NCI)
:NCI
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NTG Clarity Networks
(NCI)
77Outperform
Positive Factors
Market Expansion
NTG Clarity Networks is expanding its capacity, with its Egypt facility now able to accommodate 200 more developers and an increased sales team in Saudi Arabia, responding to a spike in demand.
Revenue Growth
The company has seen impressive revenue growth in recent years, with overall revenues rising nearly 5 times from 2021 to 2024.
Negative Factors
Financial Performance
Adjusted EBITDA margins for 2025 are expected to be lighter than anticipated, ranging between 16-20% compared to the expected 20.7%.
Profit Margins
Adjusted EBITDA margins for 2025 are expected to be somewhat lighter, in the range of 16-20%, compared to an expectation of 20.7%.
NTG Clarity Networks (NCI) vs. S&P 500 (SPY)
Market Cap
C$71.65M
Dividend YieldN/A
Average Volume (3M)100.69K
Price to Earnings (P/E)9.2
Beta (1Y)0.02
Revenue Growth86.72%
EPS Growth286.35%
CountryCA
Employees400
SectorTechnology
Sector Strength43
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.19
Shares Outstanding42,393,658
10 Day Avg. Volume75,754
30 Day Avg. Volume100,688
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)N/A
Price to Sales (P/S)3.52
Price to Cash Flow (P/CF)31.50
P/FCF Ratio49.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$3.25Price Target Upside86.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
NTG Clarity Networks Business Overview & Revenue Model
Company DescriptionNTG Clarity Networks Inc. is a global provider of telecommunications and IT solutions, primarily serving the telecommunications, utilities, and enterprise sectors. The company specializes in delivering innovative software solutions and services, including network management, business process outsourcing, and professional services. NTG Clarity Networks focuses on enhancing operational efficiency and performance for its clients through its core products and services.
How the Company Makes MoneyNTG Clarity Networks makes money through a diversified revenue model that includes the sale of proprietary software solutions, professional services, and business process outsourcing. The company earns revenue by licensing its software products to clients in the telecommunications and utilities sectors, which allows them to manage and optimize their network operations. In addition, NTG Clarity Networks provides consulting and implementation services, generating income from project-based engagements. The company's business process outsourcing services offer ongoing operational support, providing a steady stream of recurring revenue. Key partnerships with technology providers and strategic alliances with industry players further enhance NTG Clarity Networks' ability to generate earnings by expanding its market reach and capabilities.
NTG Clarity Networks Financial Statement Overview
Summary
NTG Clarity Networks has demonstrated strong growth in profitability and revenue recently, with improved net and gross profit margins. However, the company faces challenges in cash flow management and has a history of financial instability.Income Statement
NTG Clarity Networks shows strong growth with a remarkable increase in revenue from previous years. The Gross Profit Margin for TTM stands at approximately 32.9%, indicating efficient cost management. The company also exhibits a robust Net Profit Margin of about 14.8% for TTM, reflecting profitability improvements. EBIT and EBITDA margins are healthy, suggesting operational efficiency. However, these positive trends are recent, as past years showed lower profitability.78
Positive
Balance Sheet
The company's balance sheet reveals a moderate debt-to-equity ratio, with substantial total debt but improved equity position in TTM. Return on Equity is strong at 75.7% for TTM, but the negative equity in previous years indicates past financial struggles. The equity ratio in TTM is approximately 33.7%, highlighting a shift to a more stable capital structure.62
Positive
Cash Flow
Operating cash flow remains positive, but free cash flow is negative in TTM due to capital expenditures, posing liquidity concerns. The Operating Cash Flow to Net Income Ratio is 0.15 in TTM, demonstrating less-than-ideal cash conversion efficiency, while past years showed better free cash flow results. Improvement in cash flow management is necessary for sustaining growth.55
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 47.14M | 27.73M | 17.65M | 11.90M | 7.91M | 8.63M | Gross Profit |
| 15.50M | 9.22M | 6.72M | 6.59M | 2.23M | 2.25M | EBIT |
| 6.66M | 2.60M | 2.25M | 2.60M | -1.16M | -4.64M | EBITDA |
| 6.80M | 2.52M | 2.00M | 1.81M | -1.32M | -7.45M | Net Income Common Stockholders |
| 6.99M | 1.71M | 1.25M | 1.37M | -1.63M | -8.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 98.69K | 358.09K | 725.02K | 158.87K | 145.22K | 31.07K | Total Assets |
| 7.90M | 12.39M | 8.17M | 6.49M | 3.17M | 2.77M | Total Debt |
| 7.24M | 8.80M | 7.96M | 7.87M | 8.45M | 7.11M | Net Debt |
| 7.14M | 8.45M | 7.23M | 7.71M | 8.30M | 7.07M | Total Liabilities |
| 11.23M | 15.63M | 14.94M | 14.41M | 15.71M | 14.87M | Stockholders Equity |
| -3.33M | -3.24M | -6.78M | -7.92M | -12.54M | -12.10M |
| Cash Flow | Free Cash Flow | ||||
| -363.93K | 1.17M | 1.06M | 253.14K | 952.73K | -5.31K | Operating Cash Flow |
| 1.05M | 1.86M | 2.49M | 1.80M | 1.83M | 6.13K | Investing Cash Flow |
| -1.57M | -2.50M | -1.43M | -1.55M | -880.31K | -11.44K | Financing Cash Flow |
| 5.35M | 275.06K | -496.65K | -239.50K | -838.57K | -62.32K |
NTG Clarity Networks Technical Analysis
Positive
1.74
Price Trends
1.88
Negative
1.65
Positive
1.42
Positive
Market Momentum
-0.03
Positive
51.85
Neutral
48.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NCI, the sentiment is Positive. The current price of 1.74 is below the 20-day moving average (MA) of 1.86, below the 50-day MA of 1.88, and above the 200-day MA of 1.42, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 51.85 is Neutral, neither overbought nor oversold. The STOCH value of 48.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NCI.
NTG Clarity Networks Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Performance Comparison
TSE:NCI
NTG Clarity Networks
1.87
1.47
367.50%
TSE:IQ
Airiq Inc
0.34
-0.07
-17.07%
TSE:BLN
Blackline Safety
6.56
2.46
60.00%
NTG Clarity Networks Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: 48.72% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The call highlights significant financial growth and strategic achievements, including record revenue and net income, while acknowledging increased operating expenses and receivables due to expansion efforts. The overall sentiment is optimistic, driven by strong market positioning and future growth prospects in Saudi Arabia.Highlights
Record Revenue Growth
Q3 2024 marked the eighth consecutive quarter of record-setting revenue, with top-line revenue up 109% year-over-year to $14.7 million. Year-to-date revenue increased 100% to $38.9 million.
Significant Net Income Increase
Net income for Q3 rose 303% to $2.1 million, and year-to-date net income increased 272% to $6.9 million.
Largest Contract Win
Secured a $53 million 3-year contract, contributing to a total backlog of $83.5 million as of September 30, 2024.
Improved Financial Metrics
Adjusted EBITDA for Q3 increased 140% to $3.2 million, with an adjusted EBITDA margin of 22%, up from 19% the previous year.
Strong Cash Position
Ended Q3 with $5.4 million in cash, the highest in the company's history, due to positive operational cash flow and a successful LIFE Offering.
Lowlights
Increase in Operating Expenses
Operating expenses rose to 18% of revenue due to investments in new office space, employee hiring, and training to support growth.
Receivables Increase
Receivables increased by 150% due to rapid top-line growth, although the company reported strong collections post-Q3.
Company Guidance
During the third quarter 2024 earnings call for NTG Clarity Networks Inc., several key financial metrics and guidance updates were highlighted. The company reported its eighth consecutive quarter of record-setting revenue, with a 109% increase to $14.7 million compared to the previous year, and a year-to-date revenue increase of 100% to $38.9 million. Net income also reached new heights, rising 303% to $2.1 million for the quarter and 272% year-to-date to $6.9 million. Additionally, NTG Clarity introduced adjusted EBITDA as a new metric, which grew by 140% to $3.2 million, resulting in a 22% adjusted EBITDA margin. A major highlight was a $53 million, three-year contract, contributing to a backlog of $83.5 million in work on hand. The company reaffirmed its full-year guidance of $55 million in revenue and a 14% net income margin for 2024, reflecting a recent increase from previous estimates. Despite the impressive growth, NTG Clarity emphasized continued investments in staffing and infrastructure to sustain its trajectory, particularly in the fast-growing Saudi Arabian market where 97% of its revenue is concentrated.NTG Clarity Networks Corporate Events
Business Operations and Strategy
NTG Clarity Secures $14.6M in New Contracts, Boosting Growth
Positive
Jan 30, 2025
NTG Clarity Networks has secured new purchase orders and contracts worth approximately $14.6 million CAD from existing clients, reinforcing its strong market position. The company is leveraging opportunities from Saudi Arabia’s Vision 2030 plan, leading to increased renewals and new work, boosting their backlog to $105 million while enhancing client trust and accelerating growth.
NTG Clarity Networks Reports Transformative Growth in 2024
Jan 15, 2025
NTG Clarity Networks has announced a transformative year in 2024, marked by significant growth in its operations in Saudi Arabia, driven by its strategic pillars of fostering relationships, education, and investment in future talent. The company has seen a 67% increase in its workforce, reaching over 1,000 employees, as it continues to expand its influence and deliver substantial value to its shareholders.
NTG Clarity Networks Secures Major Contract Renewal
Dec 4, 2024
NTG Clarity Networks has secured a significant $22 million contract renewal and expansion with a financial services customer in the Middle East. This deal, which highlights a 25% increase in resource headcount, strengthens NTG’s growth momentum and contributes to its backlog of over $100 million. The contract will support NTG’s aim to meet its 2024 revenue target and underscores a trend toward long-term, recurring revenue contracts.
NTG Clarity Networks Announces $10.3M in New Orders
Nov 18, 2024
NTG Clarity Networks has secured $10.3 million CAD in new orders and renewals, boosting its presence in the IT, telecom, financial, and education sectors. The company’s growth is driven by Saudi Arabia’s digital transformation and strong client relationships that result in increased IT budgets from satisfied clients.
NTG Clarity Networks Reports Strong Revenue Growth
Nov 12, 2024
NTG Clarity Networks has reported an impressive 109% year-over-year revenue growth in the third quarter of 2024, achieving a net income of $2.1 million and an adjusted EBITDA of $3.2 million. The company is well-positioned to leverage the digital transformation in Saudi Arabia, benefiting from its extensive experience and skilled workforce. With a strong balance sheet and a significant backlog of work, NTG Clarity is set to continue its growth trajectory into 2025.
NTG Clarity to Announce Q3 Results and Boost Investor Relations
Nov 5, 2024
NTG Clarity Networks is set to announce its Q3 2024 financial results on November 12, with an earnings call to follow on November 13. The company has also partnered with LodeRock Advisors to enhance its strategic investor relations and communication, reflecting its commitment to growth and investor engagement.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.