A Look At Zedcor (TSXV:ZDC) Valuation After Recent Insider Buying By Major Shareholder Dean Sylvan Swanberg

Recent insider buying at Zedcor (TSXV:ZDC) is drawing attention after Senior Officer, Director, and 10% holder Dean Sylvan Swanberg acquired 100,000 common shares through direct ownership.

See our latest analysis for Zedcor.

Zedcor’s share price closed at CA$5.46. While the 1 day share price return of 1.87% offers a short-term bump, recent 7 day and year to date share price returns are negative. This is set against a very strong 1 year and multi year total shareholder return that suggests longer term momentum has previously been strong, even as shorter term sentiment has cooled, with insider buying arriving at a time when near term share price performance has softened.

If this kind of insider interest has your attention, it could be a good moment to widen your search and check out fast growing stocks with high insider ownership.

With shares off their recent highs despite a 51% 1 year total return and analysts seeing room up to about CA$7.76, the key question is simple: is Zedcor still undervalued or is the market already pricing in future growth?

Most Popular Narrative: 29.6% Undervalued

With Zedcor last closing at CA$5.46 against a narrative fair value of about CA$7.76, the current setup centers on whether the market is underappreciating its earnings potential.

Ongoing digital transformation among clients and Zedcor’s increasing investment in in-house, AI-enabled monitoring (such as Live Verified Monitoring and advanced camera features) differentiates its offerings, expands the high-margin VSaaS platform, and is expected to drive further improvement in net margins.

Read the complete narrative.

Curious what kind of revenue mix and margin profile need to hold for that valuation to stack up? The narrative focuses on rapid top line expansion, a sharply higher earnings base, and a future P/E multiple that assumes investors remain comfortable paying a premium for this earnings profile. The details behind those forecasts are where the story becomes more detailed.

Result: Fair Value of $7.76 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, the story could change quickly if US margin pressure persists or if rising capital spending fails to translate into the revenue and earnings analysts are banking on.

Find out about the key risks to this Zedcor narrative.

Another View: Rich On Sales Multiple

If you step away from the narrative of fair value and just look at what you are paying for each dollar of sales, the picture looks tougher. Zedcor trades on a P/S of 11.2x, compared with a fair ratio of 7.4x, the North American Trade Distributors average of 1x and peer average of 0.2x. That gap suggests expectations already carry plenty of optimism, so how comfortable are you paying that kind of premium?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Zedcor Narrative

If you look at these numbers and reach a different conclusion, or simply want to test your own thesis using the same data, you can quickly build a custom view of Zedcor’s story and stress test your assumptions in just a few minutes: Do it your way.

A great starting point for your Zedcor research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Zedcor has sharpened your interest, do not stop here, use the screener to uncover more focused ideas that fit how you like to invest.

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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