Laptop Modelling Group Retains “Neutral” Rating At Ventum

Ventum Capital Markets analyst Amr Ezzat acknowledged in a July 29 report that he’s sustaining a “Neutral” rating and C$9.00 objective value on Laptop Modelling Group (Laptop Modelling Group Stock Quote, Chart, Info, Analysts, Financials TSXV:CMG), which is anticipated to launch its first-quarter fiscal 2026 outcomes after market shut on August 6.

“Following the elimination of segment-level reporting in This autumn/F25 and a reset in investor expectations, we technique Q1/F26 with a tempered outlook,” he acknowledged.

His estimates are unchanged heading into the quarter.

Ezzat forecasts product sales of $28.9-million and EBITDA of $6.6-million, representing a 5.3% year-over-year decline and a 23.0% margin, every beneath Avenue estimates of $29.5-million in earnings and $8.6-million in EBITDA.

Laptop Modelling Group develops and licenses reservoir simulation software program program utilized by oil and gas companies to boost hydrocarbon restoration from subsurface reservoirs.

“Administration expects the Sharp acquisition to help progress and sees continued traction in Seismic, although it stays cautious about pure effectivity amid macro-driven softness in R&P and the wind-down of corporations,” Ezzat acknowledged. “Margins are anticipated to remain flat near time interval, with value takeout benefits lagging, nevertheless no carryover pressure is anticipated into F2027. As a reminder, the first half of the fiscal 12 months is usually seasonally weaker.”

Ezzat expects safe annuity and maintenance earnings of $19.5-million in Q1, up 0.9% 12 months over 12 months and 0.3% quarter over quarter. He forecasts expert corporations earnings of $8.3-million, down 7.3% 12 months over 12 months and eight% sequentially, in line with administration’s guidance for a $6–7 million annual decline as CoFlow and non-core Bluware corporations wind down. He initiatives perpetual license earnings of $1.0-million, down 52.6% from remaining 12 months nevertheless up 80.5% from This autumn. Annuity and license expenses are anticipated to contribute merely $0.2-million throughout the quarter due to seasonal contract timing.

“Whereas FQ1 is vulnerable to mirror seasonal softness and an evolving mix, the long-term focus stays unchanged: rising higher-margin software program program revenues, compounding FCF, and reducing dependence on Expert Firms,” he acknowledged. “In that context, muted corporations earnings or flat entire progress may mirror strategic repositioning comparatively than execution factors. M&A continues to be a central pillar, with administration viewing acquisitions as the primary lever to hurry up free cash motion per share over time.”

He acknowledged the newest appointment of Amrit Khullar as CFO is notable, given his background as former CFO of Constellation Software program program’s Perseus working group. The switch indicators continued alignment with Constellation Software program program’s decentralized, acquisition-focused model and embeds additional of CSU’s firm philosophy inside CMG’s administration.

“That acknowledged, until recurring A&M progress begins to offset Expert Firms attrition additional materially, we depend on the shares to remain range-bound.”

Ezzat acknowledged CMG’s This autumn/F25 outcomes bought right here in beneath expectations, with earnings of $33.7-million and EBITDA of $10.5-million, missing every consensus and his private estimates. He added that additional relating to than the miss was the drop in disclosure, as the company omitted segment-level ingredient that had flip into customary. This lack of granularity makes it extra sturdy to guage how successfully the company’s acquired corporations are performing relative to legacy operations.

“We think about the operational weak level is multi-faceted – and admittedly additional pronounced than we anticipated,” he acknowledged. “The US CCS market has cooled, with many tax-incentive-driven feasibility analysis (beneath the IRA) not renewing. Smaller operators are beneath pressure, and shoppers are increasingly rationalizing software program program spend all through distributors. Within the meantime, expert corporations earnings is anticipated to say no by $6–7M in F2026, simulation progress visibility has deteriorated faster than anticipated, and whereas Seismic is a vivid spot, it nonetheless represents a smaller portion of the combo.”

Ezzat thinks the company will do $42.5-million in Adjusted EBITDA on earnings of $126.2-million in fiscal 2026. He thinks these numbers will improve to $47.2-million on earnings of $132.6-million in fiscal 2027.

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