Why I'm Not (Yet) Buying This Apparently Cheap Turnaround: A Deep Dive into Zoomd Technologies's & Its Risks
This profitable fast-growing AdTech company trades at a FCF yield exceeding 10%, but can investors get comfortable with the risks?
Disclaimer: Currently, I do not own shares of Zoomd Technologies, Inc. I may decide to purchase or sell shares at any time without prior notice. Do your own research and size positions appropriately if you invest. Nothing here is meant to be understood as investment or financial advice. My research and writing process is assisted by AI tools to enhance analytical efficiency and clarity.
TL;DR
Zoomd Technologies is a profitable, high-growth AdTech company with a strong balance sheet that has executed a turnaround, now trading at a 10%+ FCF yield. The market is severely handicapping the share price due to two prominent risks: customer concentration and corporate governance.
Introduction
Last week, Zoomd Technologies ($ZOMD.V) passed the initial ‘Airlock Protocol’ screening. The company presents a puzzle for investors. On one hand, the company has executed a significant turnaround... On the other hand, this performance is built on a foundation of significant customer concentration and corporate governance concerns. At the outset, I was captivated by the strong numbers, but with more analysis, the risks seem to high for me currently. As such, I see Zoomd Technologies as a high-risk investment opportunity with the potential for high rewards, and as such, I stay on the sidelines until the risks are mitigated.
Note that as the company reports its financials in USD, the “$” denotes USD in this article. Beware: the share price of ZOMD.V is denominated in CAD, therefore, I will convert CAD to $ for valuation purposes.