2D·

Earnings Kraken Robotics

$PNG (+1,86%) Kraken Robotics presents strong Q1 figures. The share itself reacted cautiously

On Friday, the share fell by 2.4 percent to 4.74 euros. Over the year as a whole, however, the share price has risen by almost 200 percent. The question is: has the market already priced in the growth?

Quarterly figures with light and shade

The Canadian marine technology specialist increased its turnover by 35% year-on-year to 21.7 million Canadian dollars. The product division with subsea batteries and synthetic aperture sonar systems in particular grew by 50 percent. New defense orders worth around 40 million dollars provided an additional boost.

The adjusted operating result (EBITDA) reached 3.0 million dollars. However, the bottom line remained a loss - between 0.7 and 3.3 million dollars, depending on the accounting standard. The balance sheet is solid: 108.7 million dollars in cash. This secures the financing of the upcoming Covelya acquisition, which is expected to be completed in the second quarter of 2026.

High valuation, high expectations

The share has an ambitious valuation. A discounted cash flow model results in a fair value of 6.89 Canadian dollars - the current price of 7.44 dollars is around eight percent higher. The premium is even more evident in the price/sales ratio: 21.2 compared to an industry average of 3.3. Investors are paying a high premium for future growth.

Since the beginning of the year, the share price has risen by 12.5 percent, and even by 198 percent over a twelve-month period. The 52-week high of 6.57 euros is currently around 28 percent away. The RSI of 41 signals a slight cooling off - but no over-indebtedness.

Outlook and analysts' assessment

The management expects sales of between 165 and 175 million dollars for the year as a whole. Adjusted EBITDA is expected to rise to between 40 and 50 million dollars. The order backlog comprises 97 million dollars for the core business and an additional 165 million dollars from the Covelya integration.

Analysts remain optimistic. The average price target is 10.80 Canadian dollars - around 45 percent above the current level. The prerequisite is the successful completion of the Covelya takeover and the timely delivery of underwater energy solutions to defense customers.

The next few weeks will provide clarity on the success of the acquisition and the sustainability of the current valuation. The Q2 figures will show whether the boom in orders justifies the high expectations

PS: Unfortunately I was on vacation so I'm late with the figures, they were published on 28.05

What do you think of these quarterly figures?

13 Comentários

Tenbagger2024@Tenbagger2024

@Klein-Anleger ???

•

investment_sage_bpszl@investment_sage_bpszl

@Tenbagger2024 good idea to ask him too, have you already dealt with them?

•

Tenbagger2024@Tenbagger2024

@investment_sage_bpszl am invested. However, I have now reallocated a portion to $EXA

•

Tenbagger2024@Tenbagger2024

@investment_sage_bpszl am invested. However, I have now reallocated a portion to $EXA

••

Klein-Anleger@Klein-Anleger

@Tenbagger2024 I see the figures as mixed, good, but not top!
Much more important will be the next figures, when the takeover is already included, then it will be extremely interesting how much inorganic growth has been bought in...

•

Seventrader@7Trader

@Klein-Anleger you shouldn't be such a specialist for this, because the next earnings will only provide the new outlook and only Q3 will then contain the new sales. Feel free to correct me if I've read that wrong.

•

Klein-Anleger@Klein-Anleger

@7Trader Yes, that's exactly what I meant. The next figures - as soon as the Covelya takeover is included in the forecast... Q3 should fit, even if I haven't looked through the current figures in detail yet 😉

••

Chris@Multibagger

No figures that need to be increased further in view of the valuation.

•

capital_captain_2693@capital_captain_2693

@Multibagger weren't you recently of the opinion that one should increase or am I confusing you now?

•

Chris@Multibagger

@capital_captain_2693 Yes, I wrote about weakness. I still stand by that. But in the event of daily losses of at least 5%, I stock up in very small tranches of 2-3 shares via trading 212. My comment today should rather be understood to mean that there is no need to buy much more in comparison to the share price because the share will explode next week.

•

capital_captain_2693@capital_captain_2693

@Multibagger I also stock up via a weekly savings plan 👍

••

capital_captain_2693@capital_captain_2693

@Raketentoni ?

•

Raketentoni@Raketentoni

@capital_captain_2693
Let's give this post by @investment_sage_bpszl a cold, hard AOK fact check. The colleague has hit some very good points, but we have to be careful with the numbers, as he jumps back and forth between the euro, Canadian dollar (CAD) and different valuation periods.
Here is my statement on the screenshots and the naked numbers of the Canadians:
1. the ice cold numbers and fact check of the post
The "bloody" Friday: The Post writes that the share fell by 2.4 % to 4.74 euros on Friday. That's almost true: in European trading (e.g. Tradegate) the share closed at around EUR 4.64, on its home exchange in Canada at CAD 7.44 and CAD 7.80 respectively. So the market actually acknowledged the figures with a slight sniffle.
The jump in sales: The reported CAD 21.7 million (+35% year-on-year) is absolutely correct. The demand for their underwater batteries (SeaPower) and the famous KATFISH sonar systems is burning brightly.
The big problem at the bottom line (the loss): Although adjusted EBITDA rose to CAD 3.0 million, Kraken's bottom line slipped into a net loss of CAD 3.3 million (there was still a mini profit in the same quarter last year). Why? Because they are building up a massive workforce to handle the large defense contracts and the upcoming major takeover of Covelya Group is eating up a lot of money for consultants and bureaucracy.
2. the biggest mistake in the screenshot: The price-to-sales ratio (P/S ratio)
Here the author of the post (or his source Simply Wall St) has been completely misled:
The post claims Kraken has a KUV of an astronomical 21.2 compared to the industry average of 3.3.
This is mathematical nonsense! If you divide the current market capitalization of around CAD 1.5 billion by the expected annual revenue in 2026 (CAD 165-175 million), we end up with a KUV of around 8.5 to 9. This is still a hefty premium for a growth company in the defence and AI subsea sector, but miles away from the 21.2 mentioned in the text. The 21.2 incorrectly refers to historical, old sales.
3. what is the stock good for our Side B?
Kraken Robotics serves an extremely hot topic for the coming years: protection of critical underwater infrastructure (pipelines, data cables) and mine defense for NATO.
Let's run it through our core formulas:
Core Quality Formula: 35% sales growth + 14% adjusted EBITDA margin = 49 points! That goes beyond the scope and is a clear "Very Good" in the pure growth sector.
The crux of the matter is the outlook: Management expects revenue to jump to up to CAD 175m for the full year 2026 and the EBITDA margin to climb to over 26% as soon as the big orders are billed in the second half of the year. If they can achieve this, the current valuation will be absolutely justified.
Mr. Prompt's final verdict for tonight
The author of the post rightly asks at the end: "Has the market already priced in the growth?"
Answer: Yes, a lot of it. The share has gained almost 200 % over the year. The fact that it corrected after the Q1 figures despite a record order backlog of CAD 97 million is simply due to the fact that the gamblers cashed out in the short term after the swing into the red.
For our Side B, Kraken Robotics is an absolute top candidate for the watchlist because the marine robotics and NATO defense theme will have massive tailwinds for years to come. But after a 200% rally, I'm not buying the stock on the day of the quarterly results.

•