A weekly look at some small-cap stocks making news - or about to.
As of market close on Thursday, May 22, Canada’s S&P/TSX SmallCap Index was up by about 9 per cent over the past 52 weeks, not including dividends. The Russell 2000 in the U.S. was down nearly 2 per cent over the past 52 weeks.
Breaking today
Junior uranium stocks soared on Friday as President Donald Trump signed executive orders to ramp up the nuclear energy industry. Reuters reported late Thursday, quoting sources, that Trump planned to ease the regulatory process on approvals for new reactors and strengthen fuel supply chains. On Friday afternoon, those executive orders were signed, seeking to shrink a multi-year process down to 18 months.
Licensing for reactors in the U.S. can take over a decade at times, a process designed to prioritize nuclear safety but which has discouraged new projects.
The moves include a substantial overhaul of the Nuclear Regulatory Commission that includes looking at staffing levels and directing the Energy and Defense departments to work together to build nuclear plants on federal lands, a senior White House official said.
The Sprott Junior Uranium Miners ETF (URNJ-Q) was up more than 12 per cent in Friday trading. Its top holdings include Paladin Energy Ltd. (PDN-T), up 8 per cent, NexGen Energy Ltd. (NXE-T), up 11 per cent, and Denison Mines Corp. (DML-T), up 10 per cent in early trading.
Small-cap spotlight
EQB Inc. (EQB-T) shareholders will be watching for changes in borrowing demand and loan loss reserves amid the tariff-driven economic turmoil when the Toronto-based bank reports its fiscal second-quarter earnings after markets close on May 28.
EQB Inc., through its subsidiary, Equitable Bank, provides personal and commercial banking services, including everything from GICs and savings accounts to residential and reverse mortgages, home equity lines of credit and insurance loans. EQB, which describes itself as a digital financial services company and “Canada’s Challenger Bank,” is the country’s seventh-largest bank by assets.
U.S. President Donald Trump’s trade war has created upheaval across industries, including banks that rely heavily on personal and commercial investments and loans. Consumers and businesses are concerned about spending, particularly on big-ticket items such as houses, given the uncertain economic outlook. Canada’s housing market is heading for correction territory as many buyers and sellers sit on the sidelines, worried about the economic outlook.
When EQB released its first-quarter results on Feb. 25 (for the quarter ended Jan. 31), CEO Andrew Moor said in an analyst call that recent interest rate cuts were a tailwind for loan growth and improving credit metrics, but acknowledged the impact tariffs could have on customer activity.
Mr. Moor said the bank has some “built-in risk mitigators,” such as lending focused on large urban markets with diversified economies. He also said fiscal and monetary policy tools would likely be used to support the Canadian economy and employment if tariffs escalate. The company also said during its first-quarter report that it had built some of the tariff impacts into its provisions for credit losses.
Still, investors will be looking for clues in the second-quarter report on how EQB is managing the uncertainties given the rapidly changing tariff landscape.
TD Cowen analyst Graham Ryding updated his estimates ahead of the second-quarter earnings.
“The primary change is a higher forecast for provision for credit losses (PCLs) in [the second quarter] given the softer macro indicators since EQB last reported results late February,” Mr. Ryding wrote in a May 23 note. He has a “hold” rating on the stock and left his target unchanged at $110.
He reduced his second-quarter earnings per share (EPS) forecast to $2.58 from $2.67 previously.
The analyst consensus is EPS of $2.53 for the second quarter ended April 30, compared to $2.81 for the same quarter last year, according to S&P Capital IQ. Revenue is expected to come in at $310.5-million versus $316.7-million a year earlier.
“The fluid outlook for global trade and tariffs is weighing on Canadian consumer confidence and the housing market,” Mr. Ryding added, noting that housing sales are down 7 per cent so far this year, despite lower bond yields and mortgage rates.
CIBC analyst Paul Holden wrote in a May 16 bank earnings preview note that EQB posted “worse-than-expected and worse-than-historical” loan losses in 2024.
“This was mostly concentrated in the equipment leasing business and management has set an expectation for stabilizing losses in that portfolio,” he wrote, adding that weaker economic conditions impacting the trucking industry could slow growth.
“There is risk that losses are higher than previously assumed,” he wrote. “There is also increasing risk in the mortgage portfolio where credit provisions have not followed impaired loans higher.”
He said strong collateral has protected EQB from taking losses, but the softening housing market could result in the need for higher provisions.
“We also expect higher performing PCLs this quarter based on changes to economic assumptions,” he wrote, adding that EQB uses Moody’s Analytics for its economic forecasts and the rating agency increased its unemployment rate assumptions.
Still, Mr. Holden wrote that EQB has the potential to “buck the trend” in loan growth in its second-quarter results. He points to Office of the Superintendent of Financial Institutions (OSFI) data from February that shows the company managed month-over-month loan growth of 1.3 per cent, which he noted was well above the big banks.
“EQB appears to be doing well in residential mortgages as growth was 1.5 per cent in the month versus the big banks at closer to zero,” he wrote. “Despite a strong month, we continue to view loan growth as being challenged in 2025 and the company may fall short of its medium-term loan growth targets this year.”
He forecasts total loan growth of 2.2 per cent for the second quarter and 5.9 per cent for the fiscal year.
Mr. Holden has an “outperformer” (buy) rating on EQB and recently reduced his target price to $126 from $130.
In his May 15 bank earnings preview note, National Bank Financial analyst Gabriel Dechaine lowered his EQB target price to $111 from $117. (He increased the target price to $117 from $109 after the first-quarter report).
“EQB previously guided to more muted loan growth in the first half of the year, followed by stronger growth in the back half. However, Q2 [the second quarter] could deliver better than expected performance,” Mr. Dechaine wrote, citing OFSI mortgage data. “That said, as discussed at our 23rd annual conference in March, the outlook for H2 2025 [the second half of 2025] has become more uncertain considering the changing macro environment."
Mr. Dechaine, who has a “sector perform” (hold) rating on the stock, wrote that EQB has continued to invest in its business, despite a backdrop of sluggish loan growth. He also wrote that the credit picture will likely be “muddied” by rising impairments.
“Q1/25 [The first quarter of 2025] was a fairly positive quarter for EQB from a credit standpoint,” he said, noting that provisions for credit losses came in 7 per cent below forecasts and impaired loans were up by “only” about 5 per cent quarter over quarter (versus 20 per cent in each of prior two quarters).
“Credit improvement was driven by stabilization in the troubled trucking loan segment, where impaired loans fell 40 per cent [quarter over quarter],” he wrote. “However, going forward, given the backdrop of tariffs, rising unemployment and a weak housing market, impairments are likely to continue to trend up over the course of 2025, while recoveries slow with this added uncertainty.”
The consensus price target for EQB as of May 22 was $118.70 among 10 analysts surveyed by S&P Capital IQ, with a high of $147 and a low of $107.
The company’s dividend yields just over 2 per cent. In the past 52 weeks, EQB stock has traded between a high of $114.22 and a low of $78.24.
Small-cap summary
Other small caps making news this week:
Lightspeed Commerce Inc. (LSPD-T) shares fell 8 per cent on Thursday after the point-of-sale software company reported a huge loss in its fiscal fourth quarter caused by a goodwill writedown.
Before markets opened on Thursday, the company reported revenue of US$253.4-million for the quarter ended March 31, an increase of 10 per cent compared to the same quarter last year. The result was ahead of expectations of US$251.3-million.
Its net loss widened to US$575.9-million or US$3.79 per share compared to a net loss of US$32.5-million or 21 cents US per share last year. It said the net loss includes a non-cash goodwill impairment charge of US$556.4-million.
On an adjusted basis, the company reported net income of US$15-million or 10 cents US per share for the quarter compared to net income of US$8.5-million or 6 cents US a year earlier. The expectation was for adjusted EPS of 11 cents US per share.
Adjusted EBITDA was US$12.9-million, which was roughly in line with expectations and compared to US$4.4-million a year ago.
In its outlook, the company said it expects first-quarter revenue of US$285-million to US$290-million, which is slightly ahead of expectations of US$284.5-million. Adjusted EBITDA was forecast at US$14-million to US$16-million, which is close to the US$15-million expected.
Gross profit growth is expected to be approximately 13 per cent for the quarter.
For fiscal 2026, the company said it expects revenue growth of approximately 10 to 12 per cent, adjusted EBITDA of approximately US$68-million to US$72-million and gross profit growth of approximately 14 per cent.
In the past 52 weeks, the stock has traded between a high of $26.60 and a low of $10.50 on the Toronto Stock Exchange.
Read the full story here from the Globe’s Sean Silcoff.
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Velan Inc. (VLN-T) shares dropped nearly 8 per cent on Thursday after the Montreal-based valve maker swung to a loss in its fiscal fourth quarter.
After markets closed on Wednesday, the company reported sales of US$83.2-million for its fourth quarter ended Feb. 28, up 2.9 per cent compared to the same period last year.
Its adjusted net loss from continuing operations was US$4.9-million or 23 cents US per share compared to adjusted net income of US$3.7-million or 17 cents US per share last year.
“The variation is due to lower adjusted EBITDA, partially offset by an income tax recovery this year, versus an income tax expense last year,” the company stated.
Earlier this year, the company announced it was selling its asbestos-related liabilities at a cost of US$143-million. It also sold its French subsidiaries for US$208.2-million.
In the past 52 weeks, the stock has traded between a high of $18 and a low of $5.49 on the TSX.
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Solaris Resources Inc. (SLS-T) announced on Tuesday a US$200-million financing arrangement with RGLD Gold AG, a subsidiary of Royal Gold Inc. (RGLD-Q).
Solaris, a copper and gold exploration and development company behind the Warintza Project in Ecuador, said the financing will be made in three installments.
“The package provides the funding required to repay the senior debt facility and is expected to provide the necessary liquidity to fund all value accretive derisking activities through to a final investment decision,” the company stated.
Canaccord Genuity analyst Dalton Baretto increased his target to $17.50 from $16.50 and maintained his “speculative buy” after the announcement. In a note, he said the agreement helps the company meet its near-term financing needs.
BMO Capital Markets analyst, who has an “outperform” (buy) and $14 target, noted that the financing agreements followed a competitive process that included a number of proposals from third parties.
“With an updated resource still to come, along with economic studies on the project that will help define the design alongside other parameters, the transaction can be viewed as a positive endorsement of Warintza, particularly at its stage of development, and its jurisdiction,” he wrote.
In the past 52 weeks, the stock has traded between a high of $6.34 and a low of $2.58.
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Canada Goose Holdings Inc. (GOOS-T) shares shot up nearly 30 per cent mid-week after the Toronto-based parka maker reported fiscal fourth-quarter earnings that beat analysts’ estimates.
The retailer also said it won’t be providing a financial outlook for fiscal 2026 due to “ongoing macroeconomic uncertainty and dynamic consumer spending patterns brought on by the unpredictable global trade environment.”
Before markets opened on Wednesday, Canada Goose reported revenue of $384.6-million for the quarter ended March 30, up from $358-million a year ago and ahead of expectations of $355.1-million.
The company said it has strong sales during the key January to March season, supported by its Lunar New Year campaign in China, a market that generates nearly a third of its revenue.
Net income of $27.1-million or 28 cents per share compared to $5-million or 5 cents per share in the same period a year earlier.
Adjusted net income of $32-million or 33 cents per share compared to $19.3-million or 19 cents a year earlier. The results surpassed expectations of 23 cents per share on an adjusted basis.
In the past 52 weeks, the stock has traded between a high of $20.09 and a low of $9.54.
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Quipt Home Medical Corp. (QIPT-T, QIPT-Q) stock shot up this week after the U.S.-based home medical equipment provider said it received an unsolicited takeover offer from Forager Capital Management, LLC at a price of US$3.10 per share, despite an active standstill agreement with the hedge fund.
The offer is about a 120-per-cent premium to where the stock closed on Friday, before the news was made public.
The company said it has an agreement with Forager, dated Feb. 1, that says the fund won’t propose to buy Quipt’s equity securities or assets without advance approval in writing from its board. Quipt said its board didn’t provide Forager with any prior written approval to waive the agreement.
In a note, Canaccord Genuity analyst Richard Close cited a U.S. regulatory filing that shows Forager cited the company’s “persistent headwinds in generating organic growth” and its recent shift to U.S. GAAP accounting as having reduced the stock’s appreciation.
“The filing also cited the burdensome public company costs for a company Quipt’s size, contending that a take-private transaction is in the best interest of shareholders to generate shareholder value,” he wrote.
He noted that Canaccord recently downgraded Quipt to “hold” from “buy” following its second-quarter results that included a miss and another downward estimate revision “related to several headwinds that have caused organic growth to fall short of the company’s target of 8 to 10 per cent.”
He said the proposed transaction by Forager would be “a good outcome for shareholders,” adding that ”operating as a private company would enable Quipt to maneuver through the current headwinds facing the company outside the microscope of the public markets."
The shares have traded between a high of $5.60 and a low of $1.90 over the past 52 weeks on the TSX. On the Nasdaq, the shares have traded between a high of US$4.07 and a low of US$1.35 in the past 52 weeks.
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Coveo Solutions Inc. (CVO-T) reported higher revenue for its fiscal fourth quarter, but a wider loss.
After markets closed on Tuesday, the company reported revenue of US$34.4-million for the quarter ended March 31, up from $32.6-million a year earlier.
Its net loss was US$6.3-million compared to a loss of US$4.1-million a year ago.
Adjusted EBITDA was $700,000 versus US$200,000 last year.
Canaccord Genuity analyst Doug Taylor, who has a “buy” on the stock, said in a note that the quarter showed normalized core SaaS [software-as-a-service] growth of 12 per cent, the same as the third quarter, while first-quarter guidance points to growth of 14 per cent fiscal 2026 growth of 15 to 17 per cent.
“We see this confirmation of Coveo’s top-line expansion as a key positive and also justifying the decision to reinvest in supporting further growth,” he wrote.
Mr. Taylor increased his price target to $12 from $11 for its Canadian-based shares.
National Bank Financial analyst Richard Tse increased his target to $8.50 from $7.50 and maintained his “outperform” (buy) rating.
“In our view, it appears Coveo is experiencing momentum across what we regard as the key performance metrics; namely SaaS growth, (record) bookings, expanding Gen AI customers, and partner contributions,” he wrote. “Collectively, we think those are enough to offset the increased operating/growth investments in [fiscal 2026].”
BMO Capital Markets analyst maintained his “outperform” (buy) rating and $10 target after the earnings were released.
“We believe Coveo is a leading vendor with respect to providing relevance and personalization to digital experiences and believe it can sustain a strong organic SaaS revenue growth rate over the medium term—given its competitive position, a large and growing TAM [Technical Account Manager], a robust partner ecosystem, and a seasoned management team," he said in a note. “We view the stock’s valuation as attractive on that basis.
In the past 52 weeks, the stock has traded between a high of $8.30 and a low of $4.92 on the TSX.
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MDA Space Ltd. (MDA-T) announced this week that it has increased its offer price for SatixFy to US$3 per share or US$280-million, up from US$2.10 per share or US$193-million.
The increase was in response to competitive bids received by SatixFy during its “go-shop” process.
“In the context of our valuation framework for MDA, the added consideration is a small incremental negative (representing ~C$1/MDA share) to achieve the same transaction, which MDA management considers to be very strategic to its LEO capabilities,” stated Canaccord Genuity analyst Doug Taylor in a note, adding that his firm hasn’t made changes to its revenue and profit expectations, but it did lower its target price to $36 from $37 and kept its “buy” rating.
In the past 52 weeks, the stock has traded between a high of $30 and a low of $11.44 on the TSX.
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Ceres Global Ag Corp. (CRP-T) announced on Monday an agreement to be bought by a Kansas City-based grain buyer for $4.50 per share.
The buyer is a newly formed entity controlled by Bartlett Grain Company, LLC, part of the Savage family of companies focused on international agricultural merchandising and storage, Ceres stated in a release.
“Bartlett’s acquisition of Ceres is vindication of the strategy we set out to achieve 12 years ago, which is to build the company into one of North America’s leading merchandisers of durum, oats, spring wheat, and canola,” stated Jim Vanasek, Ceres’ chair. “I believe Bartlett is a perfect fit in terms of geography, business lines, and culture, and will take Ceres to the next level. I wholeheartedly support this transaction.”
The all-cash offer is a 153-per-cent premium to the company’s closing price on May 16.
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Upcoming small-cap earnings:
May 28: EQB Inc. (EQB-T), OverActive Media (OAM-X), Emerge Commerce Ltd. (ECOM-X)
May 30: Laurentian Bank (LB-T)
June 4: Transcontinental Inc. (TCL-A-T)
June 10: Stingray Group Inc. (RAY-A-B)
With a report from Reuters