At up to 22.5x forward revenues, the Canadian tech stocks on our list are trading at higher multiples than high-growth SaaS companies
SmallCapPower | April 26, 2017: Today we examine those companies operating in the tech sector, which is notorious for its sky-high valuations. The Canadian tech stocks on our list are trading as high as 22.5x forward revenues, more than three-times high-growth SaaS companies’ range of between 5-8x. What’s more, SaaS companies benefit from reoccurring revenues, yet two of the companies on our list have yet to make a single sale to date.
Helius Medical Technologies Inc. (TSX: HSM) – $1.99
Advanced Medical Equipment & Technology
Helius Medical Technologies, Inc. is a medical technology company focused on neurological wellness. The Company focuses on developing, licensing or acquiring non-invasive platform technologies that amplify the brain’s ability to heal itself. The Company is engaged in the development of its product, the portable neuromodulation stimulator (PoNS) device. The device, when used in combination with physiotherapy, is designed to enhance the brain’s ability to compensate for damage due to trauma or disease. The PoNS device is an electrical pulse generator that delivers controlled electrical stimulation to the tongue.
- Market Cap: $180.7 million
- Total Revenue (LTM): $0.0
- Forward EV/Sales (NTM): 22.5x
- YTD Price PCT Change: 3.6%
Diagnos Inc. (TSXV: ADK) – $0.13
Software
DIAGNOS Inc. provides data mining and interpretation consulting services, and designs data analytics software products. The Company operates through two segments: Healthcare and Natural Resources. Its Healthcare segment offers image analysis services through Computer Assisted Retinal Analysis (CARA), a software tool, which assists health specialists in the detection of diabetic retinopathy. CARA is a hosted Web-based application that integrates fundus cameras with an image-processing engine over an Internet connection. Its Natural Resources segment offers data mining consulting services through Computer Aided Resource Detection System (CARDS), a software tool used to assist exploration companies in identifying mining deposits.
- Market Cap: $18.7 million
- Total Revenue (LTM): $2.3 million
- Forward EV/Sales (NTM): 16.6x
- YTD Price PCT Change: 0.0%
Computer Modelling Group Ltd. (TSX: CMG) – $10.69
Software
Computer Modelling Group Ltd. (CMG) is a Canada-based computer software technology company serving the oil and gas industry. The Company operates through the development and licensing of reservoir simulation software segment. The Company is a supplier of process reservoir modelling software with a blue chip customer base of international oil companies and technology centers in approximately 60 countries. The Company also provides professional services consisting of specialized support, consulting, training and contract research activities.
- Market Cap: $849.0 million
- Total Revenue (LTM): $75.1 million
- Forward EV/Sales (NTM): 10.5x
- YTD Price PCT Change: 17.3%
Sernova Corp. (TSXV: SVA) – $0.26
Medical Equipment, Supplies & Distribution
Sernova Corp. is a development-stage regenerative medicine company that is engaged in the development of its Cell Pouch and associated technologies, including therapeutic cells for the treatment of chronic diseases and local immune protection technologies. It is focused on developing a treatment for insulin-dependent human diabetes and other metabolic, blood and neurological diseases with therapeutic cells placed into its implanted and prevascularized medical device (the Cell Pouch), protected from immune system attack. The Cell Pouch is designed to create a microvessel rich, tissue environment for the transplantation and engraftment of therapeutic cells, which then release proteins and/or hormones for the treatment of chronic diseases, such as diabetes and thyroid disease. Its lead program is the clinical development of the Cell Pouch for treatment of patients with insulin dependent diabetes.
- Market Cap: $41.0 million
- Total Revenue (LTM): $0.0
- Forward EV/Sales (NTM): 9.6x
- YTD Price PCT Change: -13.3%
Kinaxis Inc. (TSX: KXS) – $79.24
Software
Kinaxis Inc. is a provider of cloud-based subscription software for supply chain operations. The Company offers RapidResponse as a collection of cloud-based configurable applications. The Company’s RapidResponse product provides supply chain planning and analytics capabilities that create the foundation for managing multiple, interconnected supply chain management processes, including demand planning, supply planning, inventory management, order fulfillment and capacity planning. The Company’s customers include companies in various industries, including high technology and electronics; aerospace and defense; life sciences and pharmaceuticals; industrial, and automotive.
- Market Cap: $2,003.8 million
- Total Revenue (LTM): $152.2 million
- Forward EV/Sales (NTM): 9.1x
- YTD Price PCT Change: 26.8%
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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