Kraken Robotics (TSXV:PNG) Following Its Deal Wins And Acquisition Looks Undervalued

Kraken Robotics (TSXV:PNG) is in focus after closing the Covelya Group acquisition, signing a long term subsea battery supply deal, and delivering advanced sonar systems to a navy customer.

Despite these contract wins, Kraken Robotics has seen its share price retreat, with a 30 day share price return down 22.48% and a 90 day share price return down 36.71%, even as the 3 year total shareholder return is roughly 9x higher. Momentum has recently cooled.

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So is Kraken Robotics now pricing in doubt about the business itself, or has sentiment simply swung too far after a sharp multi month pullback and strong multi year run, setting up a valuation reset?

Most Popular Narrative: 52% Undervalued

Against a last close of CA$4.62, the most followed narrative for Kraken Robotics points to a fair value of about CA$9.58, so the market price sits well below the modelled outcome using an 8.0% discount rate.

The acquisitions of 3D at Depth and the expected addition of Covelya Group broaden Kraken Robotics technology coverage across sonar, navigation, positioning and LiDAR. This can support cross selling to shared defense and commercial customers and influence consolidated revenue and adjusted EBITDA margins as higher margin products and services scale.

See why 21 investors see Kraken Robotics as 52% undervalued.

Result: Fair Value of CA$9.58 (UNDERVALUED)

Still, Kraken Robotics leans heavily on defence budgets and smooth integration of Covelya. As a result, weaker orders or deal friction could quickly challenge this upbeat narrative.

Find out about the key risks to this Kraken Robotics narrative.

Next Steps

If this mix of discounted fair value and execution questions around Kraken Robotics leaves you on the fence, act while sentiment is still resetting and test the story against the underlying numbers by weighing up the 2 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Kraken Robotics?

If Kraken Robotics has sharpened your sense of what a compelling story looks like, do not stop here. Broaden your opportunity set with a few targeted screens.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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