This analyst loves Stingray Group

Stingray Group (Stingray Group Inventory Quote, Chart, Information, Analysts, Financials TSE:RAY.A) shares pulled again  following third-quarter fiscal 2026 outcomes, a transfer Desjardins Securities analyst Jerome Dubreuil known as “unjustified,” as he raised his value goal to $21.50 from $18.50 and reiterated a “Purchase” ranking.

“Past the broader destructive market sentiment towards tech shares, we view [Wednesday’s] 4% pullback as unjustified, given our expectation for a consensus uplift, the constructive tone of the convention name, stronger-than-anticipated synergy realizations up to now and deleveraging,” Dubreuil mentioned. “Even with out a number of growth, we derive an anticipated complete return CAGR north of 20%.”

Montreal-based Stingray reported Q3/F2026 outcomes on Feb. 10, posting income of $124.8-million, up 15.4% year-over-year, and Adjusted EBITDA of $44.5-million, up 5.7%. Adjusted EBITDA margin got here in at 35.7%, in contrast with 38.9% a yr earlier, reflecting decrease gross margins tied to latest acquisitions. Adjusted web earnings rose 12.2% to $26.3-million, or $0.38 per diluted share, whereas Adjusted free money stream elevated 21.5% to $34.8-million.

Natural development in Broadcast and Recurring Industrial Music income rose 8.5% year-over-year. Broadcasting and Industrial Music income climbed 22.0% to $88.1-million, pushed by promoting contributions from the TuneIn acquisition, increased tools gross sales associated to The Singing Machine, and stronger FAST channel income. Radio income rose 2.0% to $36.7-million on increased digital gross sales.

Web earnings declined to $7.5-million, or $0.11 per diluted share, largely resulting from increased performance-based compensation and acquisition-related bills.

The corporate’s web debt to Professional Forma Adjusted EBITDA improved to 2.49x from 2.54x a yr earlier. Stingray additionally repurchased and cancelled 303,700 shares for $3.8-million in the course of the quarter. TuneIn synergies have reached an annualized run charge of US$16.0-million in income and US$5.0-million in price financial savings.

President and CEO Eric Boyko mentioned document income, Adjusted EBITDA and Adjusted free money stream “spotlight the numerous constructive affect” of the TuneIn acquisition and continued growth in FAST channels and in-car leisure. He pointed to new automotive partnerships with BYD, Mercedes-Benz and Nissan as validation of Stingray’s linked automotive technique.

Stingray closed February 10 with $17.3-million in money and entry to $519.7-million in credit score amenities. The board declared a dividend of $0.085 per share payable March 13, 2026.

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