Haivision (TSE:HAI) — mrkt cap $150mm; Price $5.26; EV/EBITDA 11
SPECULATIVE POSITION INITIATED. Haivision provides essential hardware and software solutions for live monitoring and broadcasting. The company is renowned for its intuitive video management software, which integrates advanced analytics and remote access capabilities. Its solutions are optimized for low-latency, high-bandwidth environments. While historically recognized for commercial contracts, such as those with the NFL, Haivision is increasingly shifting its focus toward defense applications. The ability to ingest video and sensor data, process it for downstream applications, and rapidly share it with AI systems is in growing demand. Recently, Haivision secured a $60 million contract with the U.S. Navy and announced a strategic partnership with Shield AI. The capability to deliver real-time processed video feeds to AI models is critical for enabling object detection and autonomous operations, positioning Haivision to benefit from substantial growth in defense sector demand.
CAE Inc (NYSE:CAE) — mrkt cap $7.6B; Price $23.72; EV/EBITDA 18
PASS. CAE is a global leader in training and simulation solutions across the aerospace, defense, and healthcare sectors. The company is undergoing a leadership transition, with both the CEO and CFO positions changing, following a period of underwhelming performance and stagnant share prices over the past five years. Leadership transitions carry inherent risks, as aligning the new leadership’s expertise with the company’s strategic direction is critical. With the increasing adoption of UAVs replacing human operators, the future operating environment presents challenges that will require much more adaptation than the past.
SmartRent Inc (NYSE:SMRT) — mrkt cap $335mm; Price $1.7; EV/EBITDA NA
MORE RESEARCH NEEDED. SmartRent is a leader in “proptech” — aiming to revolutionize the rental housing market with smart technology like smart locks, thermostats, sensors, and integrated solutions. While SaaS revenue is up 23% yoy, hardware revenue, which still makes up over 60% of the business, has declined sharply as landlord customers delay spending. The stock price has plummeted ~90% from its peak, and the company is searching for a new CEO to address execution challenges in a tough macro environment. Despite burning cash, (EBITDA loss of 3.8mm in Q3), they’ve repurchased $17 mm worth of shares this year, with an additional $20 mm authorized—arguably the height of corporate stupidity (we discuss this more generally here). If they can overcome their execution and operational challenges, there is significant market opportunity given their tech leadership. The valuation is low enough where the risk reward skew is starting to look favorable but more work needs to be done to understand the state of operations.