Canada’s S&P/TSX Small Cap Index (TXTW-I) hit a record of 1,413.69 in Thursday trading and is up by about 68 per cent over the past 52 weeks, as of Thursday’s close. The Russell 2000 in the U.S. is up about 16 per cent over the past 52 weeks. It hit a record of 2,735.10 on Jan. 22.
Small-cap summary
Coveo Solutions Inc. (CVO-T) shares were up on Friday - after falling 10 per cent on Thursday - after the company reported higher revenue but swung to a loss for its third quarter ended Dec. 31. TD also cut its price target on the stock citing “peer valuations.”
After markets closed on Thursday, Coveo reported revenue of US$38-million compared to US$34-million a year earlier. The result was ahead of expectations of US$37.3-million, according to S&P Capital IQ.
Adjusted EBITDA was a loss of US$200,000 compared to a profit of $600,000 a year ago.
Its net loss of US$7.2-million or 8 cents US per share was down from a profit of US$4-million or 4 cents US a year earlier. The expectation was for a loss of 6 cents US per share.
In its outlook, the company said SaaS subscription revenue and total revenue for the year are now expected to be at the upper end of previously announced guidance ranges.
National Bank Financial analyst Richard Tse maintained his “sector perform” (hold) rating and $9 price target following the earnings report.
“In our view, FQ3 was a solid quarter; that said, we’re looking for a reacceleration in our growth forecasts before becoming more constructive on the stock," he wrote in a note.
TD analyst David Kwan cut his price target to $9.50 from $12 “primarily due to the decrease in peer valuations,” he said.
“Following the temporary setback last quarter, we think CVO recovered nicely, with core organic growth actually continuing to accelerate in Q3 (~18% y/y) when adjusting for the Salesforce renewal,” he wrote. “As an LLM[Large Language Model]/vendor-agnostic infrastructure play that helps deliver better and safer (Gen)AI user experiences, we continue to view CVO as an AI winner.”
He noted the stock was down 10 per cent on Thursday, “we think in part due to concerns about CVO’s exposure to potential softer growth at key partner SAP. We think the Q3 results and commentary should help alleviate those concerns, as SAP continues to be a key driver of CVO’s growth.”
BMO analyst Thanos Moschopoulos kept his “outperform” (buy) recommendation on the stock and trimmed his target price to $10 from $11 after the earnings.
“We’ve trimmed our revenue estimates, due in part to a sharper drop-off in Qubit (now decommissioned),” he wrote in a note. “We believe the stock remains significantly undervalued relative to our forecasts for growth.’
Canaccord Genuity analyst Doug Taylor kept his “buy” rating and $11 target on the stock after the earnings.
“These results reinforce our positive view on the name, as we anticipate the growth reacceleration thesis unfolding in the coming periods,” he wrote in a note.
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Frontera Energy Corp. (FEC-T) stock soared on Friday after the company announced a deal to divest its Frontera Petroleum International Holdings B.V. division for an equity value of up to US$400-million.
It said the deal includes US$375-million payable upon closing and a US$25-million contingent payment payable upon the achievement of certain development milestones.
“As a result of the transaction, Frontera will emerge as a focused infrastructure company, anchored by its standalone and growing portfolio of infrastructure assets,” the company stated, “while also retaining its interests in Guyana and certain other non‑Colombian assets."
It said GeoPark Ltd. will acquire Frontera’s Colombian upstream business, which includes all of Frontera’s oil and gas exploration and production assets in Colombia, the reverse osmosis water treatment facility and the palm oil plantation.
If the deal is approved by shareholders, Frontera said it plans to distribute about US$370-million (or $7.18 per share in Canadian dollars) to shareholders.
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ADF Group Inc. (DRX-T) shares jumped in Friday trading after the company announced a series of new contracts in Quebec, Ontario and the U.S. totaling $140-million.
“These new projects generally call on ADF’s expertise in fabrication and installation of various steel structures that vary in terms of complexity, part of new construction projects in the public transportation sector, in the commercial, industrial and manufacturing sectors, and in the hydroelectric sector in Quebec,” the company stated in a release before markets opened on Friday.
It said fabrication work for all new contracts will begin in June, with most expected to run until the end of 2027.
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Algoma Central Corp. (ALC-T) announced a 5-per-cent increase in its quarterly dividend, to 21 cents from 20 cents.
The dividend is payable on March 2 to shareholders of record on Feb. 13.
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Docebo Inc. (DCBO-T) shares rose on Thursday after the company announced a substantial issuer bid (SIB), along with preliminary fourth-quarter results and fiscal 2026 guidance.
In a release before markets opened on Thursday, Docebo said it would repurchase up to US$60-million of its shares, funded half from cash and half from its credit facility. Docebo also temporarily suspended its normal course issuer bid.
It also said fourth-quarter revenue is expected to come in between US$62.7-million to US$63-million, an increase from US$57-million for the fourth quarter of 2024. The expectation was for US$62-million, according to a note from National Bank Financial analyst Richard Tse.
Adjusted EBITDA of US$12.9-million to $13.2-million compared to consensus of US$12.8-million, up from US$9.5-million for the fourth quarter of 2024
Mr. Tse added that it’s encouraging the company’s majority shareholder, Intercap Equity, (which owns about 56.6 per cent of shares outstanding) doesn’t intend to participate in the SIB.
“Beyond the quick benefit from the above, Docebo will need to reaccelerate growth following a declining trajectory over the past few years (20% in FY24 and 12% in FY25), while FY26 pointing to [about] 11% at the guidance midpoint, despite a recent acquisition that’s bumping that rate up from the base which was of around 7%,” Mr. Tse wrote.
Scotia analyst Kevin Krishnaratne described the results as “positive.”
“Docebo delivered preliminary Q4 results that suggest impressive core ARR performance that helped offset higher-than-expected OEM churn,” he wrote. “We view the announcement of a $60M SIB as a strong signal of confidence from the board in the company’s intrinsic value, with the introduction of some modest leverage into the capital structure as manageable.”
He added: “While we anticipate a brief period of margin digestion as the company integrates Talent365 (now included in our forecast), and remain mindful of the evolving Dayforce dynamic, we view the signs of underlying strength of the core business and the stock’s attractive valuation (1.6x CY26 sales, 8.1x CY26 EBITDA) as offering a compelling entry point.”
He maintained his “sector perform” (hold) and lowered his target to $32 from $35 “now based on ~2.4x 2027E Revenue, at the low end of HCM peers (prior target multiple was ~3.5x 2026E Revenue).”
CIBC analyst Erin Kyle described the SIB “as an attractive use of capital given shares are trading near a five-year valuation trough.”
After adjusting their model to reflect share repurchases, the analyst kept their “outperformer” rating and increased their target price to $34 from $33.
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Real Matters Inc. (REAL-T) stock fell on Thursday after the company reported a wider loss in its recent quarter.
Before markets opened on Thursday, the company reported revenue of US$46.5-million for its first quarter ended Dec. 31, up 14 per cent year-over-year and in line with expectations.
Adjusted EBITDA of US$100,000 was up from a loss of US$1.7-million a year earlier.
Its adjusted net loss of US$1.1-million or a 1 cent US per share was more than the loss of US$300,000 or nil per share a year earlier.
“We continue to see solid momentum in our sales pipeline, and we remain cautiously optimistic regarding improving fundamentals of the U.S. mortgage market,” CEO Brian Lang stated in a release. “Our strategy of adding clients and growing market share through better performance remains on track, positioning our business for scale and the achievement of our target operation model.”
National Bank Financial analyst Richard Tse maintained his “sector perform” (hold) rating and $7 price target following the earnings report.
“All in, there’s still volatility around the normalization of volumes which informs our view of a balanced risk-to-reward profile for Real Matters,” he wrote. “That said, we think the long-awaited scaling in U.S. Title is providing a potentially positive set-up longer term.”
BMO analyst Thanos Moschopoulos maintained his “market perform” (hold) and $7 target on the stock after the first-quarter results.
“The refi market showed better activity in the quarter; REAL added eight new clients; and management hopes to add a third Tier-1 lender for U.S. Title in FY2026,” he wrote. “While REAL is executing well within the context of its end-market, we believe mortgage rates will need to decline more significantly in order for the stock to work.”
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Sylogist Ltd. (SYZ-T) stock fell on Thursday after the SaaS company said its president and CEO Bill Wood had immediately stepped down. He also resigned from the board
The comapny appointed Craig O’Neill as interim president and CEO. In a release, he was described as an experienced builder of SaaS businesses and previously served on the company’s board.
The board has initiated a search process to identify a permanent president and CEO.
“While abrupt, we’ve experienced increasingly vocal investor frustration with the time it is taking for Sylogist’s transition to a more SaaS-centric organic growth strategy to translate into improving overall company growth and scale benefits,” Canaccord Genuity analyst Doug Taylor said in a note. “Our conversations with company representatives suggest this move does not signal a change in overall strategy, but rather a shift to address the pace of execution against that strategy.”
Added Mr. Taylor: “We believe Mr. O’Neill’s broad leadership experience in enterprise software represents a solid stopgap while we await a more permanent appointment.”
He reiterated his “buy” recommendation and $10 price target, “as Sylogist remains inexpensive against the promise of better top-line growth ahead.”
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Vizsla Silver Corp. (VZLA-T) shares sank on Thursday after the company reported a “security incident” at its Panuco project in Mexico.
In a release after markets closed on Wednesday, the company said 10 people have been taken from its project site in Concordia, Mexico.
It said “certain activities at and near the site have been temporarily suspended,” as a precautionary measure.
“The incident is currently under investigation, and information remains limited,” the company stated.
Read the Globe’s full story here
“Vizsla is focused on the safety of the people involved,” Canaccord Genuity analyst Peter Bell said in a note. “Vizsla has been able to work successfully for many years in Sinaloa, and we view any interruption here as temporary.”
Mr. Bell added that the company paused field work in April last year “due to security conditions in the area as a precautionary measure.
He has a “speculative buy” rating and $8.50 target price on the stock.
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Exco Technologies Ltd. (XTC-T) reported higher sales and profit for its latest quarter, but earnings missed expectations.
After markets closed on Wednesday, the company reported sales of $149.5-million for its first quarter ended Dec. 31 compared to $143.6-million in the same quarter a year earlier. The expectation was for revenue to come in at $150.5-million, according to S&P Capital IQ.
Net income of $4.8-million or 13 cents per share compared to net income of $4.2-million or 11 cents a year earlier. The result was below expectations of 15 cents.
“We are pleased with our start to fiscal 2026, delivering solid top-line growth, improved profitability and strong free cash flow despite a complex macroeconomic backdrop,” stated CEO Darren Kirk.
“Our Automotive Solutions segment performed exceptionally well, capitalizing on new program launches and a favourable vehicle mix, while our Casting and Extrusion segment continues to see encouraging quoting activity, particularly for our large mould and additive tooling solutions. Consequently, we remain very optimistic [about] our prospects for continued earnings growth in the quarters ahead.”
Acumen Capital analyst Nick Corcoran increased his price target to $9.50 from $8 after the earnings and kept his “buy” rating.
“XTC continues to demonstrate the resilience of the business model, driven by diversified end markets and geographies,” he wrote in a note. “The company has remained disciplined with pricing. Macro tailwinds include stable vehicle production, onshoring of tooling and diversified applications for extrusion.”
Mr. Corcoran added: “Notably, extrusion tooling is used in AI data centres for aluminum racks – currently low single-digits with potential to grow to double digits. The near-term focus is harvesting cash flows.”
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AGF Management Ltd. (AGF-B-T) stock rose earlier this week after the company’s fourth quarter results blew past expectations.
Before markets opened on Tuesday, the company reported adjusted earnings of $41.2-million or 62 cents per share, which beat expectations of 47 cents and compared with $29.8-million or 45 cents a year earlier.
Adjusted EBITDA was $52.4-million compared to $39.6-million for the comparative prior year period and ahead of expectations of $46.6-million.
Adjusted revenue of $120.3-million compared with $105.8-million a year earlier.
Scotia Capital analyst Phil Hardie raised his target to $18.25 from $17.50 after the earnings report and maintained his “sector perform” rating.
“The stock’s valuation is nearing multi-year highs but continues to trade at a steep discount to its peers despite demonstrated operational momentum and strategic progress,” he wrote.“AGF has developed an alternative asset management platform where it has co-invested its own capital. We estimate that, including the value of these investments, AGF stock trades at just 4.1 times Adj. EV/EBITDA (next 12 months), approximately 2.7 times lower than what the conventional calculation indicates.”
Read more about what analysts had to say in Tuesday’s analyst upgrades and downgrades
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Algoma Steel Group Inc. (ASTL-T) announced a memorandum of understanding (MOU) with South Korea’s Hanwha Ocean Co. Ltd. to support a Canadian patrol submarine project.
In a release on Monday, Algoma said Hanwha Ocean will provide Algoma with up to $345-million in financial support. The amount includes about $275-million toward the potential development of a structural steel beam mill in Sault Ste. Marie, Ont. and anticipated purchases of Algoma products of up to US$50-million for use in connection with its Canadian Patrol Submarine Project (CPSP).
“The MOU is structured to support Hanwha Ocean’s ability to satisfy its Industrial and Technological Benefits (ITB) obligations in connection with the CPSP,” the release stated.
Both commitments come on the condition that Hanwha wins Ottawa’s massive, multi-billion-dollar procurement contract to supply the Royal Canadian Navy with up to 12 modern submarines.
The MOU also mandates that once Algoma establishes the new facility, the Canadian steel company must make annual payments to Hanwha Ocean worth three per cent of net sales from the mill for a decade.
Hanwa also announced MOUs with Telesat Corp. (TSAT-T) and MDA Space Ltd. (MDA-T).
“Hanwha and Telesat will explore a range of cooperative programs, notably the Government of Korea’s LEO communications satellite constellation (K-LEO) and defense user terminals that are compatible with K-LEO and Telesat Lightspeed,” the company stated. They’re also cooperating on the CPSP, “where Hanwha intends to include significant, multi-year Telesat Lightspeed services as a key strategic aspect of its bid in its Industrial and Economic Benefits to Canada Proposal Annex,” it stated.
“This collaboration brings together complementary resources and expertise to deliver next‑generation, sovereign LEO communications capabilities for Canada, South Korea, and our allied partners,” stated Telesat CO Dan Goldberg.
MDA Space and Hanwha will explore opportunities “to collaborate on the development of Korea’s sovereign Low Earth Orbit (K-LEO) defence constellation, leveraging MDA’s AURORA software-defined digital satellites,” the company stated.
Canaccord Genuity analyst Doug Taylor has a “buy” on MDA shares and raised his target price to $51 from $37 this week, citing “a combination of better visibility to material bookings and increased space market attention.”
Added Mr. Taylor: “The list of discrete potential substantial bookings was expanded this week with the K-LEO news. Additionally, the US IPO market for space-related assets is highlighting valuation upside, particularly as MDA’s own bookings lean towards defence applications.”
BMO analyst Thanos Moschopoulos raised his target price on MDA this week to $45 from $32 following the MOU with Hanwha “and—more broadly—based on our view that MDA’s active pipeline of both defense andcommercial opportunities justify a higher multiple.“
Added Mr. Moschopoulos: “We believe the Hanwha MOU could potentially translate into a $1b+ contract award, but is likely contingent on Canada choosing Hanwha over Germany’s TKMS for the procurement of submarines, which isn’t a foregone conclusion. We believe MDA has other potential constellations in its pipeline.”
Related: MDA Space faces lawsuit over executive trades ahead of loss of key contract
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Cogeco Communications Inc. (CCA-T) stock fell earlier this week after La Caisse announced its intention to sell a block of the company’s shares.
It said the block, representing nearly 11 per cent of the company’s issued and outstanding subordinate shares, was sold at a gross price of $67.45 per share.
La Caisse will remain the largest holder of subordinate shares in Cogeco Communications, the company stated.
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Upcoming small-cap earnings:
Feb. 4: Aurora Cannabis Inc. (ACB-T)
Feb. 5: Rogers Sugar Inc. (RSI-T), Canada Goose Holdings Inc. (GOOS-T)
Feb. 9: Silvercorp Inc. (SVM-T)
Feb. 10: Morguard North American Residential REIT (MRG-UN-T), Stingray Group Inc. (RAY-A-B), Andrew Peller Ltd. (ADW-A-T)
Feb 11: Killam Apartment REIT (KMP-UN-T), Primaris REIT (PMN-UN-T), First Capital REIT (FCR-UN-T), Cineplex Inc. (CGX-T), Slate Grocery REIT (SGR-UN-T), Russel Metals Inc. (RUS-T), Corby Spirit and Wine Ltd. (CSW-A-T)
Feb. 12: Interfor Corp. (IFP-T), Mullen Group Ltd. (MTL-T), Vecima Networks Inc. (VCM-T)
Feb. 13: Chorus Aviation Inc. (CHR-T), Interfor Corp. (IFP-T), Boston Pizza Royalties Income Fund (BPF-UN-T)
Feb. 17: CT REIT (CRT-UN-T),
Feb. 18: Gibson Energy Inc. (GEI-T), KP Tissue Inc. (KPT-T), Bausch Health Companies Inc. (BHC-T)
Feb. 19: Sienna Senior Living Inc. (SIA-T)
Feb. 24: Cargojet Inc. (CJT-T), BTB REIT (BTB-UN-T)
Feb. 25: Chemtrade Logistics Income Fund (CHE-UN-T)
Feb. 26: Pason Systems Inc. (PSI-T), Enerflex Ltd. (EFX-T), Curaleaf Holdings Inc.(CURA-T)
Feb. 27: Boralex Inc. (BLX-T)
March 4: Minto Apartment REIT (MI-UN-T), Spin Master Corp. (TOY-T)
March 5: Aecon Group Inc. (ARE-T), Thinkific Labs Inc. (THNC-T), Maple Leaf Foods Inc. (MFI-T)
March 6: Nexus Industrial REIT (NXR-UN-T)
March 11: NFI Group Inc. (NFI-T)
- with files from Dave Leeder and The Canadian Press