A look at some small-cap stocks making news - or about to
Canada’s S&P/TSX Small Cap Index (TXTW-I) is up by about 38 per cent over the past 52 weeks as of Wednesday’s close. It hit a record of 1,179.02 on Oct. 15. The Russell 2000 in the U.S. is up about 4 per cent over the past 52 weeks. It hit a record 2,541.67 on Oct. 15.
Small-cap spotlight
D2L Inc. (DTOL-T) shareholders will be watching for the latest national and international demand trends when the learning technology company reports its latest earnings next week.
D2L, the Kitchener, Ont.-based company behind products such as Brightspace and Lumi, is expected to report higher revenues but lower adjusted EBITDA for its third quarter ended Oct. 31 after markets close on Dec. 10.
Revenue is expected to come in at US$55.9-million, according to consensus estimates provided by S&P Capital IQ. Revenue for the third quarter last year was US$54.3-million.
Adjusted EBITDA is expected to come in at US$7.9-million, down from US$10.4-million last year.
In an earnings preview note, Cormark Securities analyst Gavin Fairweather, who has a “buy” and $23.50 target on the stock, said D2L is facing “a tough comparable and a decline in gross margins which will impact headline numbers.”
He’s aligned with consensus revenue expectations but noted that management recently flagged a “headwind” on software-as-a-service (SaaS) margins due to duplicate costs associated with migrating a back-end system.
“While this will dampen near-term gross margins, it will enhance product capabilities and gross margins medium-term,” he wrote in a Dec. 3 note.
“We are not expecting any change will be required to guidance,” he added.
Beyond the company’s third-quarter report, Mr. Fairweather said he’ll be looking for management to talk about the M&A environment.
“While we are not expecting an acceleration in US Higher Ed new logo wins in Q3, we will be looking for commentary that deal velocity is starting to improve after recent strong pipeline generation,” he wrote. “We think the recent bankruptcy of legacy LMS [learning management system] provider Blackboard may have catalyzed certain opportunities, which could prove to be meaningful in time given its share (~12% in North America; 19% across major international markets).”
The analyst said he’ll also be watching for an update on international growth following softer revenue in that segment in the second quarter, as well as progress on other company initiatives.
CIBC analyst Erin Kyle wrote in a note that they expect the main focus of the quarter will be on product demand, “given the evolving competitive landscape and recent federal policy development updates in both the U.S. and Canada,” amid a drop in international study permits.
The analyst noted that new international student enrollment fell 17 per cent year over year in the U.S., but added that the number of new international students has been declining since 2023, “and we expect this trend to continue into 2026.”
In Canada, Ottawa reduced its cap on international study permits by 7 per cent in the 2025 Federal Budget, the analyst noted, but added that Canada only accounts for about 25 per cent of total revenue. “We expect any impact to be largely immaterial. D2L’s multi-year contracts help insulate ARR from short-term enrollment fluctuations,” they wrote.
The analyst, who has an “outperformer” rating and $23 target on the stock, added that the second half of the year “tends to be D2L’s seasonally strongest period, and we are modelling a step-up in ARR [annual recurring revenue] growth as a result.”
Small-cap summary
EQB Inc. (EQB-T) shares rose on Thursday after the company announced late Wednesday that it will take over PC Financial from Loblaw Companies Ltd. (L-T) in a deal valued at $800-million that propels the digital challenger bank into the credit-card market.
The parent company of Equitable Bank will take on the seventh-largest credit-card portfolio in Canada with about 2.5 million customers, $5.8-billion in assets and more than $800-million in direct retail deposits.
“For the past few years, we’ve been talking about the need for payments, innovation and how we really need to bring that to our platform to really differentiate EQB,” the bank’s chief executive officer Chadwick Westlake said in an interview. Loblaw and EQB will partner on the PC Optimum loyalty program.
Read the full Globe story here
EQB also reported mixed fourth-quarter results and higher provisions for credit losses.
After markets closed on Wednesday, the bank reported adjusted revenue of $308.1-million for the quarter ended Oct. 31, down from $321.6-million last year. The expectation was for revenue to come in at $307.4-million, according to S&P Capital IQ.
Adjusted net income of $63.5-million or $1.53 per share was down from $101.4-million or $2.53 a year ago.
“Fiscal 2025 was a difficult year for EQB. We responded by announcing a one-time restructuring program in the fourth quarter which drove a charge of $92-million pre-tax. This significantly improves our cost structure and creates a foundation for better efficiency, operating leverage and ROE [return on equity],” Mr. Westlake stated in a release.
The company also said its adjusted provision for credit losses was $54.6-million in the quarter (up from $48-million a year ago) and $137-million for fiscal 2025 (up from $107-million in fiscal 2024) “as higher impairments and performing allowances in the personal and commercial portfolios were driven by weaker housing market and uncertainty associated with GDP and unemployment versus a year ago.”
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Canfor Pulp Products Inc. (CFX-T) shares jumped on Thursday after Canfor Corp. (CFP-T) announced plans to acquire the remaining interest of the company it doesn’t own. Canfor said it currently holds about 54.8 per cent of Canfor Pulp stock.
The offer is for Canfor Pulp shareholders to receive 0.0425 of a common share of Canfor or 50 cents in cash. The company said the offer is a 25-per-cent premium to Canfor Pulp’s closing share price on Dec. 2.
Canfor said the combined business could benefit from expanded ability to access capital and operational cost synergies.
The agreement includes a “go-shop” period until Jan. 19, 2026, during which Canfor Pulp can “actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring Canfor Pulp.”
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Tecsys Inc. (TCS-T) reported second-quarter results that beat expectations.
After markets closed on Wednesday, the supply chain management software-as-a-service company reported revenue of $48.6-million for the quarter ended Oct. 31, up from $42.4-million for the same period last year. The results was ahead of expectations of $47.3-million, according to S&P Capital IQ.
Net profit was $1.8-million or 12 cents per share, ahead of expectations of 7 cents and compared to a net profit of $821,000 or 5 cents per share a year earlier.
Adjusted EBITDA was $5-million compared to $2.9 million reported in its second quarter last year.
Ventum Capital Markets analyst Amr Ezzat, who has a “buy” and $47 target, said the revenue was ahead of his estimates of $47.3-million. He noted that SaaS revenues grew 21.8 per cent year over year, ahead of his 21 per cent forecast “and reinforcing the structural shift toward higher-quality recurring revenues.”
He wrote that SaaS “remains the company’s high-margin growth engine and underpins the long-term investment case, with revenue mix increasingly tilted toward durable, higher-value streams.”
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MDA Space Ltd. (MDA-T) announced on Thursday that it was awarded a contract by Public Services and Procurement Canada on behalf of the Canadian Space Agency (CSA) valued at $44.7-million to procure and deliver critical long lead parts in support of the RADARSAT Constellation Mission (RCM) replenishment satellite development.
Ottawa also said it plans to contract MDA Space to build, test, and launch this additional satellite for the RCM, the company stated in a release before markets opened on Thursday. MDA Space said the contract for the full mission is expected to be awarded next year.
It said the contracts are part of Ottawa’s $1-billion Radarsat+ initiative, a 15‑year investment that the CSA announced in 2023.
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Two weeks after offering to buy Dye & Durham Ltd. (DND-T) for $384-million, ex-chief executive officer Matt Proud and his private holding company Plantro Ltd. are suing the Toronto legal-software company and its board for $200-million, alleging that it has acted to thwart their interests.
The suit, filed Tuesday with the Ontario Superior Court, is a counterclaim against the company after it sued Mr. Proud and Plantro in October to get him to honour a July standstill agreement with D&D. The company claimed that he had acted improperly and unlawfully to derail a fair sale process and “serve their own ambitions of acquiring the company at an artificially depressed price.”
The legal battle is unfolding as Dye & Durham faces a Dec. 18 deadline to file delayed financial statements. If it doesn’t, it will be in default under its senior credit agreement. D&D said last week that it expects to file the statements that week.
Read the full Globe story here
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Laurentian Bank (LB-T) has struck a deal to be taken over by Fairstone Bank of Canada in an all-cash deal valued at $1.9-billion and to sell its retail business to National Bank of Canada as part of the lender’s strategy to restructure its beleaguered operations.
Montreal-based Fairstone will combine its commercial lending unit with Laurentian’s in a bid to expand its market share.
Laurentian said it plans to concentrate on commercial real estate lending, inventory and equipment financing, intermediary services and capital markets activities.
Read the full Globe story here
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Propel Holdings Inc. (PRL-T) shares rose this week after the company announced it received regulatory approval to establish Propel International Bank, Inc. It said the approval was from the Office of the Commissioner of Financial Institutions of Puerto Rico (OCFI).
Propel Bank is licensed as an International Financial Entity (IFE) overseen by the OCFI, the company stated in a release.
“Propel Bank represents an evolution of Propel’s fintech-bank partnership platform,” the company stated.
It said Propel Bank will focus on serving existing and future bank partners with consumer lending services, including underwriting, compliance, and customer service. “Propel Holdings will not become a bank holding company,” the company stated.
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Goeasy Ltd. (GSY-T) has appointed Patrick Ens as its next chief executive officer, following a health issue that forced current CEO Dan Rees to step down after nine months leading the alternative lender.
Mr. Rees has a blood disorder “that requires him to resign from his position,” Goeasy said Tuesday, in a news release. He will leave his role on Dec. 31 and stay on as a special advisor to the CEO until June 30, 2026.
Read the full Globe story here
In a note, National Bank Financial analyst Jaeme Gloyns said that while the unexpected CEO transition is likely to add to near-term trading volatility, “we believe Mr. Ens’ experience at GSY and Capital One Canada, and Dan Rees’ decision to remain with goeasy as a special advisor will help ensure success in the role and continuity at GSY.”
The analyst added: “We take comfort in comments from the board and Mr. Rees reflecting confidence that Mr. Ens is capable given his expertise in consumer lending and credit, and his strong performance and leadership since joining GSY in 2024.”
Mr. Gloyn said he doesn’t expect any material change in strategy or direction at the company following the leadership change. “Near term priorities are centered around ensuring a smooth transition and navigating the challenging macroeconomic backdrop,” he wrote.
He maintained his “outperform” (buy) rating and $245 price target.
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Curaleaf Holdings Inc. (CURA-T) rose this week after the company announced a deal to buy The Cannabist Company’s Virginia assets, including a cultivation facility and five retail dispensaries. It also said the deal includes the right to open one additional dispensary.
The transaction is subject to a 15-business-day “go-shop” period ending on Dec. 22, the company said in announcing the deal before markets opened on Tuesday. Curaleaf said it will get a $3.3-million break-up fee if a competing bid for the Virginia assets is accepted during the go-shop period or if The Cannabist fails to receive noteholder consent for the transaction.
Canaccord Genuity analyst Kenric Tyghe, who has a “buy” and $5 target on the stock, said the deal is valued at $110-million.
“Virginia legalized adult use on July 1, 2021 (it only immediately legalized possession and cultivation for personal use, with an initial targeted sales start date of 2024),” he wrote in a note. “While the start was repeatedly delayed by Governor Glenn Youngkin, Governor-elect Abigail Spanberger, who is supportive of adult-use legalization, will be inaugurated as Virginia’s 75th Governor on January 17, 2026, setting the stage for the long-awaited start of adult-use in Virginia in H1/26.”
He described Virginia as one of the key catalyst states for the industry. “Curaleaf has a strong existing presence in the other two expected catalyst states of Florida (on potential adult-use legalization by ballot measure in November 2026), and Pennsylvania (on potential adult-use legalization).”
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Algoma Steel (ASTL-T) is laying off more than a third of its workforce as it accelerates a transition to new equipment in response to U.S. tariffs.
The company started issuing some 1,050 layoff notices Monday morning, Bill Slater, president of United Steelworkers Local 2724, told The Canadian Press..
He said the size of the layoffs will also be hard for the whole city of Sault Ste. Marie, whose population is about 72,000.
Read the full story here
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Allied Properties Real Estate Investment Trust (AP-UN-T) slashed its monthly distribution by 60 per cent to focus on debt repayment, marking a major reversal for management after telling investors in August they were “very comfortable” with the monthly payout.
Allied, one of Canada’s largest publicly traded office-building owners, is cutting its distribution to 6 cents per unit monthly, down from 15 cents. Management said in a news release Monday that the decision was made “with a view to reducing indebtedness and associated interest expense going forward.”
The cut begins in December and will last throughout 2026 – but no guarantee was given that a higher payout will be restored in 2027.
Read the full Globe story here
“Cutting hard was the right decision, in our view,” CIBC analyst Tal Woolley said in a Dec. 1 note, adding that it allows the company “to move through its balance sheet pain much quicker. The new yield also makes AP’s equity a functional public markets currency, carrying a workable yield, especially if the unit price appreciates.”
He also lowered his target price to $14 from $15.50 and kept his “neutral” (hold) rating on the stock.
National Bank analyst Matt Kornack boosted his rating to “sector perform” (hold) from “underperform” (sell) and lowered his target to $13 from $14, after the news.
“We reduced our target to reflect a larger discount related to an erosion in perceived management credibility resulting from capital allocation decisions and a reversal on distribution sustainability messaging,” he wrote in a Dec. 1 note.
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Pierre Karl Péladeau has launched a battle for control of Transat AT Inc. (TRZ-T), calling for the ouster of the airline’s chair and a top-to-bottom review of its operations and direction.
In an interview on Monday, the chief executive officer of telecom and media company Quebecor Inc. called for a restructuring of the company’s balance sheet that would enable the company to attract new investment to fuel growth. He is also seeking a review that includes the direction, senior management and cost structure at Transat, which he labelled an operational and financial underperformer.
Read the full Globe story here
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Upcoming small-cap earnings:
Dec. 9: The North West Company Inc. (NWC-T)
Dec 10: Transcontinental Inc. (TCL-A-T), D2L Inc. (DTOL-T), Major Drilling Group International Inc. (MDI-T), VersaBank (VBNK-T), Roots Corp. (ROOT-T)
Dec. 11: ADF Group Inc. (DRX-T)
Dec. 18: Reitmans (Canada) Ltd. (RET-X)
- with files from Globe staff and The Canadian Press