Haivision's Record Q4: Is the Momentum Already Priced In?

Haivision delivered a clear beat on the numbers. For the fourth quarter, the company posted record revenue of $40.2 million, a 33.3% year-over-year increase. Profitability also surged, with Adjusted EBITDA of $7.1 million, a 144% increase from the prior year. The headline EPS surprise was staggering, with actual earnings of $0.11 per share versus an estimate of $0.01, a 1,000% beat.

Yet the market's reaction was muted. On the day of the earnings release, shares were essentially flat. This disconnect between stellar results and stock price action is the core of the sentiment gap. Management's reaffirmation of fiscal 2026 guidance-calling for revenue above CAD 150 million and at least 50% growth in Adjusted EBITDA-suggests the company sees a clear path forward. The thesis here is one of strong execution meeting a market that has already priced in the good news. The record quarter validates the turnaround narrative, but the lack of a celebratory pop indicates little new upside remains to be captured.

Assessing the Quality of the Growth

The growth story here is built on tangible product innovation. Management explicitly cited rising core-product revenue and the launch of new products like the AI-enabled KX1 edge processor and the Falkon X2 transmitter as key drivers. This isn't just a sales team effort; it's a product-led expansion. The strategic pivot to a next-generation private 5G platform for its entire transmitter line is a critical move. By enhancing price competitiveness, this transition aims to open new market segments and defend against commoditization, providing a durable growth vector beyond one-off wins.

Profitability, however, presents a more nuanced picture. While the company held steady at a gross margin of 73.0%, the path to the historically discussed 20%+ EBITDA margin at scale remains a future target. The recent quarter's Adjusted EBITDA margin of 17.6% is a significant improvement from 9.8% a year ago, but it's still below that aspirational level. Management itself noted the company is "very close" to demonstrating that earnings potential, suggesting the margin expansion is a function of revenue scale and operating leverage, not an immediate near-term certainty.

The bottom line is that growth appears sustainable and well-distributed. The control room business is shifting toward a more profitable, manufacturer-driven model, with sales of that segment up over 35%. Recurring revenue from maintenance and cloud services also grew, providing a steadier cash flow stream. Yet the consensus view seems to be that this quality of growth is already priced in. The market has seen the record quarter and the reaffirmed guidance, and the muted reaction suggests investors are waiting for the next proof point: the clear demonstration that higher revenue volumes will finally unlock the premium profitability the company has long promised.

Valuation and the Risk/Reward Asymmetry

The market's cautious stance is now reflected in the valuation. With no analyst ratings in the past three months and a consensus of Hold, there is little new institutional conviction to drive the stock. The forward-looking measure is telling: based on the next quarter's EPS estimate of C$0.06, the stock trades at a multiple that appears elevated. This is especially true given the company's own history of significant quarterly earnings volatility, as seen in the 1,000% beat last quarter and a 500% miss just a year prior. The market is paying for a future of consistency, not the erratic past.

The primary risk is execution. The company must consistently deliver on its ambitious fiscal 2026 guidance-revenue above CAD 150 million and at least 50% growth in Adjusted EBITDA-to justify this valuation. Any stumble in hitting those targets, or any sign that the path to the 20%+ EBITDA margin is longer than expected, is likely to trigger a sharp re-rating. The recent record quarter validated the turnaround, but it also set a high bar. The stock's muted reaction suggests the market has already priced in the good news and is now waiting for flawless execution to follow.

Viewed through a risk/reward lens, the asymmetry is tilted toward the downside if execution falters. The upside potential is capped by the high bar already set, while the downside is amplified by the stock's elevated multiple relative to its earnings history. For now, the thesis is one of a company that has proven it can deliver a strong quarter, but the market is giving it no credit for it. The next move depends entirely on whether Haivision can prove it can repeat the performance, quarter after quarter.