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MARKHAM, Ontario - Sangoma Technologies Corporation (TSX: STC; Nasdaq: SANG), a provider of business communications solutions, has announced the launch of a Normal Course Issuer Bid (NCIB) to repurchase up to 5% of its common shares. Currently trading at $4.76, the stock has seen a significant decline of over 33% year-to-date, according to InvestingPro data. This move follows the company’s early achievement of its debt reduction goals, having reduced its total debt to approximately $53 million, surpassing the Fiscal 2025 capital allocation target. InvestingPro analysis indicates the stock is currently undervalued, with analysts setting price targets between $8.00 and $8.50.
On Monday, Sangoma issued a notice for an additional $2.9 million debt repayment, bringing the third quarter repayments to approximately $7.3 million. The repayment of Term Loan 1 was included in this total, which led to the early accomplishment of the debt reduction target, initially set between $55 million and $60 million. InvestingPro data reveals the company maintains a strong free cash flow yield and has generated $47.85 million in levered free cash flow over the last twelve months, demonstrating solid operational efficiency despite challenging market conditions.
The company’s Board of Directors authorized the share buyback program as a strategic use of capital, citing the current market price of its shares as an attractive investment opportunity given Sangoma’s solid fundamentals and prospects for long-term growth. With a market capitalization of approximately $157 million and an overall "GOOD" Financial Health score from InvestingPro, the repurchase plan is seen as a way to enhance shareholder value while maintaining financial flexibility to pursue strategic alternatives, including potential acquisitions. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 10 additional ProTips and detailed financial metrics in its Pro Research Report.
The Toronto Stock Exchange has approved Sangoma’s notice of intention to make the NCIB, which will be effective from March 27, 2025, to no later than March 26, 2026. The company may purchase up to 1,679,720 shares through the facilities of the TSX, the NASDAQ Global Select Market, or alternative Canadian trading systems. Purchases will be made at market price for cancellation, with daily purchases limited to 25% of the average daily trading volume, except for one block purchase per calendar week that may exceed this limit. The company’s current trading volume averages 10,000 shares daily, with the stock trading at a price-to-book ratio of 0.61, suggesting potential value opportunity.
Sangoma has also established an automatic share purchase plan with a designated broker to facilitate the NCIB during self-imposed blackout periods or when insider trading rules would typically prevent such purchases.
The company, known for its Unified Communications as a Service (UCaaS), Contact Center as a Service (CCaaS), Communications Platform as a Service (CPaaS), and Trunking technologies, has been recognized in the Gartner UCaaS Magic Quadrant for nine consecutive years. With a gross profit margin of 69% and annual revenue of $241.24 million, Sangoma emphasizes its commitment to continuous innovation in communication technology as the primary developer and sponsor of the open-source Asterisk and FreePBX projects. Discover more detailed financial analysis and expert insights about Sangoma and other technology companies through InvestingPro’s comprehensive research platform.
The information in this article is based on a press release statement from Sangoma Technologies Corporation.
In other recent news, Sangoma Technologies Corporation has unveiled new artificial intelligence capabilities within its Sangoma GenAI platform. These enhancements include an improved Conversational Interactive Voice Response system designed to streamline customer interactions and gather detailed feedback. A Michelin-starred restaurant has already implemented this technology to enhance its reservation process. Sangoma has also partnered with Sphinx Medical to launch a Patient Relationship Management System that integrates with Electronic Health Records, aiming to automate medical communication tasks. Additionally, Sangoma Scribe offers transcription and sentiment analysis for voice records, while Sangoma Meet provides live transcription and meeting summaries. For contact centers, the Sangoma CX platform now includes AI-powered chatbots and virtual assistants, along with AI Assist features to improve agent interactions. Sangoma continues to invest in AI solutions and supports global open-source projects, planning to showcase these advancements at the upcoming AstriCon conference.
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