Core Viewpoint - Sangoma Technologies Corporation (SANG) shows potential for significant upside, with a mean price target of $8.42 indicating a 47.2% increase from the current price of $5.72 [1] Price Targets - The average price target consists of five estimates ranging from a low of $7.94 to a high of $9.50, with a standard deviation of $0.67, suggesting a consensus among analysts [2] - The lowest estimate indicates a potential increase of 38.8%, while the highest suggests a 66.1% upside [2] Analyst Sentiment - Analysts exhibit strong agreement on SANG's ability to report better earnings than previously predicted, which supports the view of potential upside [4] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 7.8%, with one estimate moving higher and no negative revisions [12] Zacks Rank - SANG holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13]

Group 1 - Momentum investing contrasts with the traditional strategy of "buy low and sell high," focusing instead on "buying high and selling higher" [1] - Identifying the right entry point for fast-moving stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - A safer investment approach involves targeting bargain stocks that exhibit recent price momentum [2] Group 2 - Sangoma Technologies Corporation (SANG) is highlighted as a strong candidate for investment, showing a four-week price change of 25.8% [3] - SANG has demonstrated positive returns over a longer timeframe, gaining 2% over the past 12 weeks, with a beta of 1.41 indicating significant volatility [4] - The stock has a Momentum Score of A, suggesting it is an opportune time to invest [5] Group 3 - SANG has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - The stock is currently trading at a Price-to-Sales ratio of 0.85, indicating it is undervalued at 85 cents for each dollar of sales [6] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7]

Core Viewpoint - Sangoma Technologies Corporation (SANG) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending June 2025, Sangoma is projected to earn -$0.17 per share, reflecting a 34.6% change from the previous year's reported figure [8]. - Over the past three months, the Zacks Consensus Estimate for Sangoma has increased by 8.3%, indicating a positive trend in earnings outlook [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a 'Strong Buy' or 'Buy' rating, suggesting superior potential for market-beating returns [9][10]. - Stocks rated Zacks Rank 1 have historically generated an average annual return of +25% since 1988, showcasing the effectiveness of the rating system [7].

Core Viewpoint - Sangoma Technologies Corporation (SANG) has shown a significant price increase of 29.2% over the past four weeks, with a mean price target of $8.36 indicating a potential upside of 40.5% from the current price of $5.95 [1] Price Targets and Analyst Consensus - The average price target consists of four estimates ranging from a low of $7.94 to a high of $9.50, with a standard deviation of $0.76, suggesting a relatively tight clustering of estimates [2] - The lowest estimate indicates a potential increase of 33.5%, while the highest suggests a 59.7% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction and magnitude [9] Earnings Estimates and Analyst Optimism - Analysts have shown growing optimism regarding SANG's earnings prospects, as evidenced by a positive trend in earnings estimate revisions [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 8.3%, with two estimates moving higher and no negative revisions [12] - SANG holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13]

Company Performance - Sangoma Technologies Corporation reported a quarterly loss of $0.03 per share, matching the Zacks Consensus Estimate, compared to a loss of $0.04 per share a year ago [1] - The company posted revenues of $58.07 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.72%, and down from $61.05 million year-over-year [2] - Over the last four quarters, Sangoma has not surpassed consensus EPS estimates and has topped revenue estimates only once [2][3] Stock Movement and Outlook - Sangoma shares have declined approximately 19.1% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The company's earnings outlook is mixed, with current consensus EPS estimates at -$0.03 for the coming quarter and -$0.18 for the current fiscal year, with revenues expected to be $58.11 million and $235.88 million respectively [7] Industry Context - The Internet - Software industry, to which Sangoma belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable position compared to the bottom 50% [8] - The performance of Sangoma's stock may be influenced by the overall industry outlook, as top-ranked industries tend to outperform lower-ranked ones significantly [8]

Group 1 - Sangoma Technologies (NASDAQ: SANG) shares have increased slightly since the original Buy recommendation in October, with a notable rise of over 20% prior to the release of Q2 FY25 results, although the market reacted negatively afterwards [1] - The focus of the analysis is on undercovered companies, particularly in sectors such as technology, software, electronics, and energy transition, indicating a strategic investment approach [1] - The analyst has over 7 years of personal investment experience and a background in Electrical Engineering, currently working in automotive battery R&D, which adds credibility to the analysis of small to mid-cap companies [1]

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2025 was $59.1 million, a decline of $1 million from Q1, primarily due to a $1.2 million decrease in third-party product resales, while the remainder of the business showed sequential growth [41][44] - Adjusted EBITDA improved by 3% to $10.1 million, with the adjusted EBITDA margin increasing from 16% to 17% of revenue despite the decline in top line [42][44] - Net cash from operating activities reached $11.9 million, a 30% increase year-over-year, with fiscal year-to-date net cash at $24 million, representing a 41% increase [37][38] Business Line Data and Key Metrics Changes - The company has consolidated its 11 product lines into six main lines, focusing on high-margin MRR-driven communications platforms, including UCaaS, CCaaS, and CPaaS technologies [24][25] - The infrastructure platform, which includes services like SIP trunking, has seen revenue growth of more than 10% in the first half of fiscal 2025 compared to the prior year [28] - The churn rate improved to below 0.95%, reflecting stronger client relationships and validating the focus on securing long-term recurring revenue streams [17][27] Market Data and Key Metrics Changes - The third-party hardware resale segment declined by $1.2 million compared to Q1, indicating limited potential for this segment to contribute to FY 2025 growth objectives [14][19] - The company is experiencing increased interest from partners in the premise PBX business following NEC's exit from the market, with partners seeking specialization in industry verticals [66][70] Company Strategy and Development Direction - The company is shifting its focus away from low-margin hardware sales to prioritize high-margin recurring revenue opportunities, particularly in key verticals such as healthcare and education [19][20] - Strategic priorities include expanding the portfolio through acquisitions, driving organic growth within existing partner ecosystems, and optimizing operations for efficiency and client satisfaction [21][22] - The company aims to achieve a model with over 85% recurring revenue, gross margins near 80%, and adjusted EBITDA margins approaching 20% [45][132] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial strength and the ability to accelerate growth through strategic realignment and divestiture of non-core assets [18][19] - The uncertainty in government spending has impacted the third-party hardware resale segment, leading to a strategic decision to focus on core business areas [13][14] - Management believes that the ongoing transformation and focus on high-margin recurring revenue will position the company for long-term success and value creation [9][20] Other Important Information - The company has achieved its fiscal year-end debt target of $55 million to $60 million two quarters ahead of schedule, with net debt decreasing to $43.3 million [39][44] - The company is on track for an April go-live of its new ERP system, which is expected to enhance operational efficiencies [74] Q&A Session Summary Question: Can you discuss the new Pinnacle Partner Program and its impact on sales? - The program is designed to build intimacy and trust with key partners, focusing on high-margin product lines and driving customer events, showing good momentum [50][51][55] Question: Can you reconcile the drop in churn with the sequential decline in services? - Management noted that while churn has improved, the company is still two to three quarters behind in organic growth, which is expected to pick up [57][60] Question: What is the outlook for the premise PBX business following NEC's exit? - The company is seeing increased interest from partners looking for specialization in industry verticals, which is expected to lead to growth in this area [66][70] Question: What is the strategy regarding low-margin hardware resale? - The company is sustaining the business but not investing further in it, focusing instead on core high-margin areas due to uncertainty in government spending [84][86] Question: How is the company mitigating potential tariff impacts? - Management believes the impact of proposed tariffs will be minimal, with sufficient inventory and options to optimize manufacturing locations [93][95] Question: What is the company's approach to geographic expansion? - The company is seeing performance improvements in international markets and plans to continue focusing on geographic expansion as a growth strategy [99][102]

Company Performance - Sangoma Technologies Corporation reported a quarterly loss of $0.06 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.03, marking an earnings surprise of -100% [1] - The company posted revenues of $59.11 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 5.55%, and down from $62.28 million a year ago [2] - Over the last four quarters, Sangoma has surpassed consensus EPS estimates only once and has topped revenue estimates just once [2] Future Outlook - The sustainability of Sangoma's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $63.72 million, while for the current fiscal year, the estimate is -$0.07 on revenues of $251.25 million [7] - The estimate revisions trend for Sangoma is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Sangoma belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Company Overview - Sangoma Technologies Corporation (SANG) shares increased by 5.8% to close at $7.80, supported by strong trading volume, which was significantly higher than usual [1] - The stock has gained 5.3% over the past four weeks, indicating a positive trend [1] - Sangoma's growth strategy focuses on expanding its customer base, increasing revenue through strategic deals, and enhancing financial flexibility via strong cash flow and debt reduction [1] Earnings Expectations - The company is projected to report a quarterly loss of $0.03 per share, reflecting a year-over-year improvement of +70% [2] - Expected revenues for the upcoming quarter are $62.59 million, which is a 0.5% increase compared to the same quarter last year [2] - The consensus EPS estimate for Sangoma has remained unchanged over the last 30 days, suggesting stability in earnings expectations [3] Industry Context - Sangoma is part of the Zacks Internet - Software industry, which includes other companies like Udemy, Inc. (UDMY) [3] - Udemy's consensus EPS estimate has also remained unchanged at $0.07, representing a significant year-over-year change of +250% [4] - Both Sangoma and Udemy currently hold a Zacks Rank of 3 (Hold), indicating a neutral outlook for these stocks [3][4]

Company Overview - Sangoma Technologies Corporation (SANG) shares increased by 5.8% to close at $6.05, following a period of 4.8% loss over the past four weeks, indicating a strong recovery supported by high trading volume [1] - The company is focusing on enhancing customer experience, which has resulted in low churn rates and increased demand for its IT communication solutions in the SMB market [1] Financial Performance - The upcoming quarterly report is expected to show a loss of $0.05 per share, reflecting a year-over-year change of +28.6%, while revenues are projected to be $61.45 million, down 2.5% from the previous year [2] - The consensus EPS estimate for Sangoma has been revised 40% higher in the last 30 days, suggesting a positive trend that may lead to price appreciation [3] Industry Context - Sangoma is part of the Zacks Internet - Software industry, where another company, Docebo Inc. (DCBO), saw a 1.4% increase in its stock price, closing at $45.49, with a 4.2% return over the past month [3] - Docebo's consensus EPS estimate remains unchanged at $0.25, representing a +66.7% change from the previous year [4]