Research from Atrium Research, Atrium Research Corporation

Atrium Research

Research from Atrium Research

Atrium Research Corporation

Atrium Research provides institutional quality issuer paid research on public equities in North America. Our investment philosophy takes a 3-5 year view on equities currently being overlooked by the market. Our research process emphasizes understanding the key performance metrics for each specific company, trustworthy management teams, unit economics, and an in-depth valuation analysis. 

Our research product includes in-depth initiation reports, research notes, thematic research pieces, and company fact sheets.

Equity Bottom-Up

<ul>
<li>ADF announced $55M in new contracts across Quebec and the U.S. Midwest, including additional work for its U.S. pharmaceutical client.</li>
<li>Today’s announcement gives us further confidence that ADF can continue to grow the backlog as the infrastructure spending cycle prolongs.</li>
<li>ADF trades at 3.5x EBITDA, the lowest multiple we have seen since covering the stock and a major discount to its peers and precedent transactions.</li>
</ul>


ADF announced $55M in new contracts across Quebec and the U.S. Midwest, including additional work for its U.S. pharmaceutical client.
Today’s announcement gives us further confidence that ADF can continue to grow the backlog as the infrastructure spending cycle prolongs.
ADF trades at 3.5x EBITDA, the lowest multiple we have seen since covering the stock and a major discount to its peers and precedent transactions.


<ul>
<li>ADF reported mixed Q2 financials that missed our revenue estimate due project delays but largely beat our profitability estimates.</li>
<li>Revenue came in at $74.9M vs. our $92.6M (due to $35M in delays) while EBITDA came in at $24.9M (33% margin) vs. our estimate of $17.9M.</li>
<li>Management remained bullish on the long-term growth of the sector and ended the quarter in large net cash position.</li>
</ul>


ADF reported mixed Q2 financials that missed our revenue estimate due project delays but largely beat our profitability estimates.
Revenue came in at $74.9M vs. our $92.6M (due to $35M in delays) while EBITDA came in at $24.9M (33% margin) vs. our estimate of $17.9M.
Management remained bullish on the long-term growth of the sector and ended the quarter in large net cash position.


DRX: Revenue Misses Due to Delays but Margins Smash Expectations

<ul>
<li>Since our last note in May, there have been 10 additional takeouts in Canadian small-caps, most of which coming in a significant premiums.</li>
<li>The new acquisitions largely fit within the framework outlined in previous reports.</li>
<li>Our potential takeouts portfolio is up 43% since inception (November 2023) and 17% since our last note, compared to the TSX up 18% and 3% respectively.</li>
</ul>


Since our last note in May, there have been 10 additional takeouts in Canadian small-caps, most of which coming in a significant premiums.
The new acquisitions largely fit within the framework outlined in previous reports.
Our potential takeouts portfolio is up 43% since inception (November 2023) and 17% since our last note, compared to the TSX up 18% and 3% respectively.


Finding the Next Takeout in Canadian Small-Caps - Part Three

<ul>
<li>DRX stock is down 38% since reaching ATHs in June; we have aggregated some of the bearish points that we are hearing and provide our rebuttals as to why ADF will continue to be one of the best performing stocks on the TSX.</li>
<li>ADF Group will be reporting Q2/25 financials in early September, we are expecting revenue of $92.6M (+15% YoY) and EBITDA of $17.9M (19% margin, +41% YoY).</li>
<li>ADF Group (DRX:TSX, ADFJF:OTC) is down 35% since reaching highs of $20.50/share on the back of its Q1 financials which largely beat our estimates (read here).</li>
</ul>


DRX stock is down 38% since reaching ATHs in June; we have aggregated some of the bearish points that we are hearing and provide our rebuttals as to why ADF will continue to be one of the best performing stocks on the TSX.
ADF Group will be reporting Q2/25 financials in early September, we are expecting revenue of $92.6M (+15% YoY) and EBITDA of $17.9M (19% margin, +41% YoY).
ADF Group (DRX:TSX, ADFJF:OTC) is down 35% since reaching highs of $20.50/share on the back of its Q1 financials which largely beat our estimates (read here).


<ul>
<li>As we conclude Q2/24, we are excited to release our inaugural quarterly recap report to update our readers on all the research content we have published in the last three months.</li>
<li>This period has been marked by dynamic performance across various sectors, with notable highlights in the companies we cover.</li>
<li>The best performers from our coverage universe include, ADF Group (+74%), Trigon Metals (+39%), BQE Water (+29%), and Dynacor Group (+12%).</li>
</ul>


As we conclude Q2/24, we are excited to release our inaugural quarterly recap report to update our readers on all the research content we have published in the last three months.
This period has been marked by dynamic performance across various sectors, with notable highlights in the companies we cover.
The best performers from our coverage universe include, ADF Group (+74%), Trigon Metals (+39%), BQE Water (+29%), and Dynacor Group (+12%).


Omai Gold Mines Corp - Q4/24 Recap: All Our Research in One Place!

Canada

ADF Group Inc. manufactures and erects structural steel for complex structures and miscellaneous metal work. The Company offers Standard Structural Steel, Complex Steel Structures, and Trial Assemblies. ADF Group serves clients throughout North America and Canada.

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ADF Group (DRX CN)

DRX: $55M in New Contracts Signed

ADF announced $55M in new contracts across Quebec and the U.S. Midwest, including additional work for its U.S. pharmaceutical client.

Atrium Research

DRX: Revenue Misses Due to Delays but Margins Smash Expectations

ADF reported mixed Q2 financials that missed our revenue estimate due project delays but largely beat our profitability estimates.

Atrium Research

Finding the Next Takeout in Canadian Small-Caps - Part Three

Since our last note in May, there have been 10 additional takeouts in Canadian small-caps, most of which coming in a significant premiums.

Atrium Research

DRX: Addressing the Bears & Q2 Preview

ADF Group will be reporting Q2/25 financials in early September, we are expecting revenue of $92.6M (+15% YoY) and EBITDA of $17.9M (19% margin,...

Atrium Research

Omai Gold Mines Corp - Q4/24 Recap: All Our Research in One Place!

As we conclude Q2/24, we are excited to release our inaugural quarterly recap report to update our readers on all the research content we have...

Atrium Research

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