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Opinions Stockchase Insights
Coveo Solutions Inc.CVO.TOHOLDJun 05, 2023
Stockchase InsightsUnknown
$8.06
Stock price when the opinion was issued
$4.27
As of Jun 19, 2026. Market Open.
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COMMENT
Coveo wend public last Thursday on the TSX. Initially priced at $15, the shares quickly rose to $18. Coveo raised $215 million with the goal to continue its growth. The company's revenues, most of which are recurring, have reached US$64 million in 2021, a 15% growth over the previous year. Coveo operates with a net profit margin of 75% to 80% and an estimated addressable market of $39 billion.
Technology
EPS of ($0.095) beat estimates of ($0.133) and revenues of $39.37M beat estimates of $39.106M. CVO saw SaaS subscription revenue growth of 17% and announced a share buyback program of $40M, close to 5% of its total outstanding shares. The company expanded its gross profit margins and improved its operating loss from a prior year loss of $19.4M to a loss of $8.8M. CVO expects to reach positive operating cash flow by FY2025. Sales growth has been good, and management has done an excellent job of expanding its margins and controlling costs. Its balance sheet is fairly healthy and if it can maintain its sales growth rates and achieve profitability, we feel that this name has good long-term potential. The trend has been positive, but we would also like to see a continuation in its progression toward positive free cash flow.
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