Kalkine Media explores 5 TSX tech penny stocks to watch in Q4

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 Kalkine Media explores 5 TSX tech penny stocks to watch in Q4
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Highlights

  • In Q2 2022, Pivotree’s revenue was C$ 26.43 million.
  • POET’s sales in Q3 2022 were noted at US$ 0.23 million.
  • In Q3 2022, Wecommerce’s adjusted EBITDA was reported at C$ 1.9 million.

Canada’s technology sector consists of companies that deal in consumer electronics, software, electronic components, cloud computing, etc. Along with the tech giants, there are many businesses that are categorized as penny stocks. This sector has a broader market and micro-market capitalizations. Typically, penny stocks are traded at or under US$ five.

During the pandemic, to fulfill stay-at-home orders, many tech companies made investments in providing solutions for the same. There has been consistent innovation and developments in the technology sector, leading to constant fluctuations and price shifts. These can be in any direction, basis the announcements made by the industry.

As new investor aims for pocket-friendly stocks, most of them go with tech penny stocks. So, since the market is governed by fluctuations and uncertainties, there must be a balanced approach while aligning the stocks with the portfolio. Sometimes, the decisions may invite unfavorable results also. Hence, the investor needs to be prepared and back the stock selection with thorough research.

Here, we try to assess five penny stocks along with their recent financial highlights:

  1. Pivotree Inc. (TSXV: PVT)

Pivotree Inc. provides commerce services globally and caters to clients including deployment, platform selection, strategy, and hosting. The company facilitates clients in choosing enterprise-proven solutions, including MDM platforms and Commerce. Further, the company is engaged in connecting and building critical systems for smooth movements in a commerce business. Pivotree operates in two segments-professional and managed services.

In Q2 2022, Pivotree’s revenue rose to C$ 26.43 million compared to C$ 14.34 million in the year-ago quarter. Further, the gross profit increased to C$ 11.88 million from C$ 6.26 million for the same comparative period. Its net cash from operating activities grew to C$ 0.25 million from C$ 55,228 in the reported quarter. The company’s net loss was reported at C$ 3.7 million compared to a net loss of C$ 2.9 million. The adjusted EBITDA also fell to C$ 0.1 million from C$ 1.7 million.

On November 8, 2022, Pivotree announced a strategic partnership with GreyOrange Inc. to transform Supply Chain Capabilities.

  1. POET Technologies Inc. (TSXV: POET)

POET Technologies Inc. is engaged in providing integration solutions based on the POET Optical Interposer. Through this interposer, the company works on seamless integration of photonic and electronic devices into a single module. It uses advanced packaging methods and wafer-level manufacturing techniques. Additionally, POET manufactures and designs semiconductor products and services for commercial applications.

In Q3 2022, POET’s revenue was noted at US$ 0.23 million.

In the reported quarter, the company’s sales rose to US$ 0.23 million from US$ 0.12 million in the same year’s previous quarter. The operating expenses grew to US$ 4.43 million from US$ US$ 4.07 million for the same comparable period.

As on September 30, 2022, the company’s cash and cash equivalents declined to US$ 10.26 million from US$ 14.94 million on December 31, 2021. 

  1. Kraken Robotics Inc. (TSXV: PNG)

Kraken Robotics Inc. is a Canada-based company that is engaged in the sale, designing, and manufacturing of underwater robotic systems and software-centric sensors. The company operates in business segments of platforms and sensors.

In Q2 2022, Kraken’s revenue increased to C$ 14.3 million versus C$ 1.9 million in the year-ago quarter. The gross margin also rose to 44.8 per cent from 39 per cent for the same comparable period. The adjusted EBITDA grew to C$ three million from a loss of C$ 0.2 million. Meanwhile, the company’s net profit jumped to C$ 0.5 million from a net loss of C$ 0.9 million.  

  1. Wecommerce Holdings Ltd. (TSXV: WE)

WeCommerce Holdings Ltd. works with a focus to acquire, build, and grow businesses that serve the Shopify Partner ecosystem. The partner brands include Yopify, Pixel Union, Foursixty, Stamped, Out of the Sandbox, and SuppleApps.

In Q3 2022, Wecommerce’s revenue grew to C$ 11.45 million compared to C$ 10.94 million in Q3 2021. The adjusted EBITDA was reported at C$ 1.9 million versus C$ 3.39 million for the same comparative period.

Market Capitalization of PVT, POET, PNG, WE, and EQ:

  1. EQ Inc. (TSXV: EQ)

EQ Inc. is a digital marketing service provider. The company works on improving web, mobile and social, and video performances by using real-time technology and advanced analytics. The company has technical platforms-DSP and DMP that focus on tracking and optimizing campaigns by providing managed service solutions for businesses.

In Q3 2022, EQ’s revenue declined to C$ 2.1 million relative to C$ 3.1 million in the year-ago quarter. The company’s net loss rose to C$ 1.76 million from C$ 1.67 million for the same comparative period. The company’s cash shrank to C$ 3.01 million from C$ 9.8 million in the same comparable period. The total assets were reported at C$ 11.01 million versus C$ 19.05 million.

Bottom Line

Trading in tech penny stocks may have both upsides and downsides. It is important to analyze both sides and pick the ones that match your portfolio. Look for stocks that match your financial goals and meet your investment criteria.

Carefully analyze the financials of the company along with the valuations and the governing market trends. Tapping on the right opportunity will contribute to a balanced portfolio and improve your overall performance. 

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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