We are maintaining a Buy rating and our one-year price target of $6.55.
You can download our 9-page Equity Research Report by clicking on the following link: eResearch-DCM-2025_03_04_2025-Q4-Preview-and-Dividend_FINAL
Company Overview
DCM is a Canadian-based provider of marketing and business communication solutions to companies in North America. Its technology-enabled content and workflow management capabilities solve the complex branding, communications, logistics, and regulatory requirements of leading enterprises so its customers can accomplish more in less time. Its services include printing, content management, digital asset management (DAM), labels & asset tracking, location-specific marketing, social media analytics, and multimedia campaign management.
REPORT HIGHLIGHTS
- F2024 Preliminary Financial Results: DCM announced preliminary financial results for the fiscal year ended December 31, 2024. It expects revenue between $478 million and $480 million, slightly below the estimate of $484.7 million. Gross profit margin is projected at 27%, in line with our estimate. Adj. EBITDA between $62M and $64M, consistent with our prior estimate, and total net debt is expected to be approximately $79M, in line with our estimate.
- Key Operational Developments: DCM’s revenue was impacted by project timing shifts, the exit from low-margin accounts, and the Canada Post strike. However, the completion of the Moore Canada Corporation (MCC) integration ahead of schedule and within budget contributed positively to profitability. Management continues to target gross profit margins above 30%.
- Outlook: With MCC integration and restructuring complete, DCM is focused on profitable growth, product mix expansion, and cash flow improvement.
- Dividend Program: DCM announced a $0.20 per share special dividend payable on March 25, 2025, and a regular quarterly dividend of $0.025 per share, beginning April 4, 2025.
- Financial Strategy: The Company has allocated $12.4M for shareholder distributions, signaling confidence in its free cash flow and a shift toward capital return strategies.
Financial Analysis & Valuation:
- We have adjusted our model based on the Q4/2024 preview financials and slightly reduced revenue projection in 2025 accordingly.
- We estimate an equal-weighted price target of $6.58 based on a DCF valuation ($10.00/share), a Revenue Multiple valuation ($4.94/share), and an EBITDA Multiple valuation ($4.80/share).
We are maintaining a Buy rating and our one-year price target of $6.55.
You can download our 9-page Equity Research Report by clicking on the following link: eResearch-DCM-2025_03_04_2025-Q4-Preview-and-Dividend_FINAL
FIGURE 1: One-Year Stock Chart
Other DCM Research Reports over the last year:
- Update Report (November 16, 2024): Strategic Integration Drives Long-Term Growth at DCM Amid Short-Term Revenue Challenges in Q3
- Update Report (August 8, 2024): DCM Navigates Integration Challenges with Strategic Focus on H2/2024 Revenue Growth and Margin Improvements
- Video (July 22, 2024): Analyst Chris Thompson Discusses eResearch’s Latest Research Report on DCM and its Q1/2024 Financial Results
- Update Report (May 16, 2024): DCM Reports Strong First Quarter Results as Revenue Grows, Margins Strengthen, and Debt Reduction Continues
- Update Report (March 25, 2024): Record Revenue & EBITDA Growth Highlight MCC Acquisition Synergies and Improving Margins
- Update Report (March 1, 2024): MediaValet Acquisition Multiple Bodes Well for DCM’s Valuation as its Pays Down Debt and Focuses on Tech Strategy
Notes: All numbers in CAD unless otherwise stated. The author of this report, and employees, consultants, and family of eResearch may own stock positions in companies mentioned in this article and may have been paid by a company mentioned in the article or research report. eResearch offers no representations or warranties that any of the information contained in this article is accurate or complete. Articles on eresearch.com are provided for general informational purposes only and do not constitute financial, investment, tax, legal, or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this information should consult with a financial advisor. The article may contain “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are based on the opinions and assumptions of the Company’s management as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein. Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Please read eResearch’s full disclaimer.
