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Velan Inc. SV
(TSX:VLN)
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Rating:45Neutral
Price Target:
C$17.00
▼(-8.60% Downside)
Action:Reiterated
Date:10/09/26
The score is held down primarily by weak financial performance (declining revenue, negative profitability, and ongoing free-cash-flow burn). Technical signals are also subdued with the stock below key short-term averages. Valuation gets modest support from the reported yield but is constrained by losses and the announced dividend suspension, while the earnings call is balanced by near-term weakness offset by backlog/liquidity and longer-term pipeline opportunities.
Positive Factors
Backlog visibility
The substantial backlog provides meaningful revenue visibility over the next several quarters, with most orders scheduled for near-term delivery. This supports production planning and customer continuity, although conversion still depends on execution and the timing of project shipments.
Negative Factors
Declining revenue and weak profitability
Falling revenue combined with negative EBIT and net margins indicates that current operations are not producing adequate earnings from the company’s industrial platform. Persistently weak profitability can reduce reinvestment capacity and make earnings recovery dependent on both volume improvement and cost discipline.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog visibility
The substantial backlog provides meaningful revenue visibility over the next several quarters, with most orders scheduled for near-term delivery. This supports production planning and customer continuity, although conversion still depends on execution and the timing of project shipments.
Read all positive factors
Velan Inc. SV (VLN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$377.53M
Dividend Yield3.2%
Average Volume (3M)1.13K
Price to Earnings (P/E)―
Beta (1Y)0.67
Revenue Growth-9.05%
EPS Growth73.48%
CountryCA
Employees1,296
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)-1.18
Shares Outstanding8,309,143
10 Day Avg. Volume2,551
30 Day Avg. Volume1,128
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.40
Price to Sales (P/S)0.84
P/FCF Ratio-1.49
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)N/A
Revenue Forecast (FY)N/A
Velan Inc. SV Business Overview & Revenue Model
Company Description
Velan Inc. designs, manufactures, and markets industrial valves worldwide. The company offers quarter-turn valves; gate, globe, and check valves; API 600 cast steel gate, globe, and check valves; corrosion-resistant steel gate, globe, and check va...
How the Company Makes Money
Velan makes money primarily by selling engineered valves and related flow-control products (and associated components) to industrial customers and project contractors. Revenue is generated from: (1) Original equipment sales: supplying valves for n...
Velan Inc. SV Earnings Call Summary
Earnings Call Date:Oct 07, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Jan 13, 2027
Earnings Call Sentiment Neutral
The call presented a mixed outlook. Near-term financial performance was weak, with sales, bookings, backlog, gross profit, adjusted EBITDA, and net income all declining, alongside shipment delays, restructuring activity, and the suspension of dividends. These challenges were balanced by solid underlying demand in core markets, a substantial nuclear, defense, and power opportunity pipeline, resilient aftermarket activity, improved operating cash use, and increased liquidity. Management remained confident in the long-term outlook, but the combination of current financial pressure and positive strategic positioning results in a balanced sentiment.Positive Updates
Solid Backlog with Near-Term Deliveries
Backlog stood at $262.5 million at quarter-end, with $101.1 million, or 76.2%, expected to be delivered within the next 12 months and $62.4 million scheduled for the following 12 months.
Negative Updates
Sales Declined 14.9%
Second-quarter sales were $57.5 million, down $10.1 million, or 14.9%, from $67.6 million last year. Management attributed the decline to shipment timing and complexity, tariffs and geopolitical tensions, operational and customer constraints, lower shipment volumes in North America and China, delayed large project deliveries, and production and logistics challenges.
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Q2-2027 Updates
Positive
Negative
Solid Backlog with Near-Term Deliveries
Backlog stood at $262.5 million at quarter-end, with $101.1 million, or 76.2%, expected to be delivered within the next 12 months and $62.4 million scheduled for the following 12 months.
Read all positive updates
Company Guidance
Management expects near term order activity to remain mixed across regions, with a portion of pipeline opportunities converting in the near term and a meaningful portion of nuclear opportunities converting into bookings; several defense opportunities could translate into orders and execution activity over the next 2 years. The company’s focus for the second half is on growing bookings and optimizing its cost structure, with restructuring costs currently estimated at approximately $2 million to $3 million to be recognized in the third quarter. Management cited a $262.5 million backlog, 76.2% deliverable within 12 months, $28.2 million in cash and cash equivalents, a new $80 million revolving credit facility, and $95.8 million of liquidity, and the board determined that the company will not pay a dividend for the remainder of fiscal 27.Velan Inc. SV Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
62
Positive
Cash Flow
24
Negative
| Breakdown | TTM | Feb 2026 | Feb 2024 | Feb 2022 | Feb 2021 | Feb 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 272.60M | 301.28M | 346.82M | 370.43M | 411.24M | 302.06M |
| Gross Profit | 68.89M | 78.49M | 93.21M | 112.47M | 134.97M | 80.54M |
| EBITDA | 1.73M | 20.12M | 5.64M | -34.65M | 50.61M | 11.83M |
| Net Income | -25.39M | 172.52M | -19.74M | -55.46M | -10.26M | 2.20M |
Balance Sheet | ||||||
| Total Assets | 319.46M | 346.30M | 479.39M | 477.86M | 508.43M | 580.83M |
| Cash, Cash Equivalents and Short-Term Investments | 29.52M | 53.68M | 41.72M | 50.55M | 62.74M | 74.97M |
| Total Debt | 49.92M | 35.62M | 41.42M | 40.91M | 44.02M | 84.05M |
| Total Liabilities | 166.49M | 164.36M | 296.13M | 277.02M | 242.92M | 280.61M |
| Stockholders Equity | 152.41M | 181.32M | 182.18M | 199.89M | 264.82M | 297.08M |
Cash Flow | ||||||
| Free Cash Flow | -22.37M | -169.97M | -4.94M | -6.07M | 9.25M | -20.00M |
| Operating Cash Flow | -15.45M | -162.77M | 4.30M | 522.00K | 17.87M | -9.10M |
| Investing Cash Flow | -10.22M | 187.04M | -14.13M | 1.76M | -26.00K | 2.90M |
| Financing Cash Flow | -15.01M | -8.65M | -4.66M | -2.62M | -23.52M | 33.10M |
Velan Inc. SV Technical Analysis
Negative
18.60
Price Trends
18.36
Negative
17.34
Positive
16.67
Positive
Market Momentum
-0.04
Positive
40.47
Neutral
63.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VLN, the sentiment is Negative. The current price of 18.6 is above the 20-day moving average (MA) of 18.27, above the 50-day MA of 18.36, and above the 200-day MA of 16.67, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 40.47 is Neutral, neither overbought nor oversold. The STOCH value of 63.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:VLN.
Velan Inc. SV Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | C$25.23M | 8.93 | 6.20% | 4.35% | 7.21% | ― | |
56 Neutral | C$52.06M | -4.68 | 112.32% | ― | 11.62% | 16.81% | |
53 Neutral | C$2.47B | 51.74 | 2.66% | ― | 13.75% | ― | |
50 Neutral | C$954.97M | -7.14 | -13.16% | ― | 45.07% | 73.98% | |
46 Neutral | C$25.52M | -13.69 | -16.94% | ― | 9.31% | -124.29% | |
45 Neutral | C$377.53M | -10.38 | -14.80% | 3.20% | -9.05% | 73.48% |
* Industrials Sector Average
TSE:VLN
Velan Inc. SV
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Velan Inc. SV Corporate Events
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Velan’s profits slide as sales, bookings fall amid tariffs and timing issues
Negative
Oct 8, 2026
Velan Inc. reported a sharp drop in second-quarter sales to $57.5 million from $67.6 million, as complex production orders slipped to later periods and customer demand was disrupted by tariff uncertainty and geopolitical tensions. Gross margin nar...
Financial Disclosures
Velan Inc. Sets Date for Q2 2026 Results and Analyst Call
Neutral
Sep 22, 2026
Velan Inc., based in Montreal and traded on the TSX as VLN, is a Canadian industrial manufacturer specializing in valve and flow-control products for global industrial markets. The company maintains a structured investor relations program, using r...
Executive/Board ChangesShareholder Meetings
Velan Inc. Confirms Board Elections and Appoints New Chair and Lead Director
Positive
Aug 26, 2026
Velan Inc. reported that all director nominees presented in its July 2026 Management Proxy Circular were elected to the board at the shareholders’ annual meeting held in Montréal on August 25, 2026. Each nominee received strong majority...
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.