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Covalon Technologies
(COV)
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Rating:79Outperform
Price Target:
C$5.00
▲(70.65% Upside)
Action:Reiterated
Date:10/06/26
The score is driven primarily by improving fundamentals (return to profitability, stronger cash flow, and very low leverage) and strong technical momentum (price above all major moving averages with positive MACD). These positives are tempered by a relatively elevated P/E and only moderate, slowing revenue growth, which increases the need for continued margin and execution progress.
Positive Factors
Return to Profitability
The return to positive operating profit and net income indicates a meaningful business recovery rather than ongoing loss absorption. A solid gross margin near 53% provides a foundation for sustaining profitability, funding operations internally, and supporting further commercial investment.
Negative Factors
Slowing Revenue Growth
Moderate and slowing revenue growth indicates that recent commercial expansion has lost some pace, placing greater importance on product adoption and sales execution. If growth remains subdued, the company may have less operating leverage and fewer opportunities to compound earnings quickly.
Read all positive and negative factors
Positive Factors
Negative Factors
Return to Profitability
The return to positive operating profit and net income indicates a meaningful business recovery rather than ongoing loss absorption. A solid gross margin near 53% provides a foundation for sustaining profitability, funding operations internally, and supporting further commercial investment.
Read all positive factors
Covalon Technologies (COV) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$122.35M
Dividend Yield6.94%
Average Volume (3M)30.11K
Price to Earnings (P/E)28.2
Beta (1Y)0.20
Revenue Growth4.11%
EPS Growth88.39%
CountryCA
Employees105
SectorGeneral
Sector StrengthN/A
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.16
Shares Outstanding27,618,076
10 Day Avg. Volume14,579
30 Day Avg. Volume30,107
Financial Highlights & Ratios
PEG Ratio-0.88
Price to Book (P/B)1.87
Price to Sales (P/S)1.75
P/FCF Ratio34.99
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.2
Revenue Forecast (FY)C$39.90M
Covalon Technologies Business Overview & Revenue Model
Company Description
Covalon Technologies Ltd., a Canadian company based in Mississauga, innovates, develops, manufactures, and commercializes medical technologies and products globally. Its operations span major international markets, including North America, Europe,...
How the Company Makes Money
Covalon makes money primarily by selling its wound care and infection prevention products to healthcare providers and through channel partners that distribute medical supplies. Revenue is generated from product sales (i.e., the shipment of consuma...
Covalon Technologies Earnings Call Summary
Earnings Call Date:Aug 21, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 03, 2027
Earnings Call Sentiment Neutral
The earnings call highlighted strong sequential revenue growth, successful international expansion, and a robust cash position, indicating positive forward momentum. However, year-over-year revenue decline and decreased adjusted EBITDA present concerns, although these may be offset by promising innovations and clinical study results.Positive Updates
Sequential Revenue Growth
Revenue at $8.4 million was up more than 10% sequentially between Q3 and Q2, led by more than 40% sequential quarterly growth in the U.S. advanced wound care sales channel.
Negative Updates
Decline in Year-Over-Year Revenue
Q3 revenue came in 9% below last year's Q3, which was their highest revenue quarter of 2024.
Read all updates
Q3-2025 Updates
Positive
Negative
Sequential Revenue Growth
Revenue at $8.4 million was up more than 10% sequentially between Q3 and Q2, led by more than 40% sequential quarterly growth in the U.S. advanced wound care sales channel.
Read all positive updates
Company Guidance
During Covalon's Q3 Fiscal 2025 conference call, CEO Brent Ashton provided optimistic guidance, emphasizing key financial and operational metrics. The company reported $8.4 million in revenue for Q3, marking a sequential increase of over 10% from Q2, driven by more than 40% growth in its U.S. advanced wound care sales. Despite a year-over-year revenue decline of 9% for Q3, the company achieved an adjusted EBITDA of nearly $1 million, reflecting a 50% increase from the previous quarter. Ashton highlighted a robust 13% growth in trailing 12-month revenue and a 27% compounded annual growth rate over three years, illustrating Covalon's market success. Additionally, the company maintained a strong cash position of over $18 million, up almost $9 million from the previous year. Operationally, Covalon achieved 100% retention of its top 50 U.S. hospital customers and added 15 new hospital accounts in Q3, with a total of 65 new accounts for the year. Ashton also shared promising updates on the company's innovation pipeline and international market expansion, including new product registrations and distribution agreements.Covalon Technologies Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
86
Very Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Sep 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 34.35M | 32.82M | 31.17M | 26.60M | 18.15M | 19.56M |
| Gross Profit | 19.95M | 17.47M | 18.93M | 14.36M | 7.49M | 9.70M |
| EBITDA | 4.94M | 3.01M | 3.14M | -3.56M | -8.11M | 1.54M |
| Net Income | 4.39M | 2.06M | 2.67M | -4.46M | -9.66M | 23.48M |
Balance Sheet | ||||||
| Total Assets | 36.57M | 36.12M | 31.81M | 24.90M | 30.38M | 40.58M |
| Cash, Cash Equivalents and Short-Term Investments | 19.39M | 17.37M | 16.75M | 8.79M | 14.06M | 22.95M |
| Total Debt | 1.69M | 2.25M | 901.67K | 1.56M | 2.17M | 2.59M |
| Total Liabilities | 5.03M | 5.40M | 4.30M | 6.11M | 6.15M | 7.21M |
| Stockholders Equity | 31.55M | 30.73M | 27.50M | 18.79M | 24.23M | 33.37M |
Cash Flow | ||||||
| Free Cash Flow | 5.51M | 1.65M | 3.06M | -4.50M | -9.08M | 443.71K |
| Operating Cash Flow | 6.78M | 2.29M | 3.47M | -3.18M | -7.99M | 621.37K |
| Investing Cash Flow | -1.43M | -847.02K | -281.63K | -81.02K | -843.02K | -278.53K |
| Financing Cash Flow | -4.83M | -529.35K | 4.97M | -2.16M | -2.19M | -8.25M |
Covalon Technologies Technical Analysis
Positive
2.93
Price Trends
3.67
Positive
2.93
Positive
2.39
Positive
Market Momentum
0.20
Negative
60.33
Neutral
94.36
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:COV, the sentiment is Positive. The current price of 2.93 is below the 20-day moving average (MA) of 4.14, below the 50-day MA of 3.67, and above the 200-day MA of 2.39, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 60.33 is Neutral, neither overbought nor oversold. The STOCH value of 94.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:COV.
Covalon Technologies Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$122.35M | 28.16 | 15.04% | 6.94% | 4.11% | 88.39% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
51 Neutral | C$37.32M | -4.51 | -337.24% | ― | ― | 19.02% | |
47 Neutral | C$37.19M | -11.36 | 12.68% | ― | 45.72% | 35.82% | |
44 Neutral | C$35.32M | -2.07 | -360.29% | ― | ― | -33.27% | |
43 Neutral | C$26.53M | -3.17 | -424.91% | ― | ― | -54.70% | |
41 Neutral | C$39.65M | -3.57 | 57.10% | ― | ― | 48.06% |
* General Sector Average
TSE:COV
Covalon Technologies
4.43
2.33
110.95%
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Covalon Technologies Corporate Events
Business Operations and StrategyProduct-Related Announcements
Covalon to Spotlight IV Pathway Protection Portfolio at 2026 ANCC Magnet Conference
Positive
Oct 27, 2026
Covalon Technologies will showcase its contamination protection and infection-prevention portfolio at the 2026 ANCC National Magnet Pathway to Excellence Conference in Chicago, an event that draws more than 10,000 nursing professionals and health...
Business Operations and StrategyProduct-Related Announcements
Covalon’s Collagen Dressing Shows Strong Real-World Performance in Hard-to-Heal Wounds
Positive
Sep 24, 2026
Covalon Technologies reported positive results from a retrospective real-world evidence analysis comparing its collagen matrix wound dressing to five competing collagen products in U.S. outpatient wound centers. Using de-identified records from th...
Business Operations and StrategyFinancial Disclosures
Covalon to Spotlight Record Quarter at Smallcap Discoveries Conference
Positive
Sep 22, 2026
Covalon Technologies will present at the 2026 Annual Smallcap Discoveries Conference in Vancouver following its strongest fiscal quarter in recent history. The company reported third-quarter revenue above $10 million, up 20% year over year, a shar...
Business Operations and StrategyFinancial Disclosures
Covalon’s Contamination Protection Drives Record Q3 Revenue and Margins
Positive
Aug 27, 2026
Covalon Technologies reported a strong fiscal 2026 third quarter, highlighting revenue growth and margin expansion driven by its advanced medical technologies portfolio. The company’s contamination protection solutions for vascular access si...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Covalon Sets August 27 Call to Discuss Q3 2026 Results
Positive
Aug 20, 2026
Covalon Technologies will release its third-quarter fiscal 2026 results on August 27, 2026, before markets open, and will host a conference call and webcast at 8:30 a.m. ET the same day to review the performance. The call will include a QA session...
Business Operations and StrategyFinancial Disclosures
Covalon Sets Investor Call for Q3 Fiscal 2026 Results
Positive
Aug 20, 2026
Covalon Technologies will release its third quarter fiscal 2026 results on August 27, 2026, before markets open, and has scheduled a conference call and webcast that morning at 8:30 a.m. ET for investors and analysts. The company will make a recor...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.