The S&P/TSX Capped Information Technology Index fell 1.38% on Tuesday, April 25. Today, I want to zero-in on an exciting tech stock that has flown under the radar on the TSX in 2023. Converge Technology (TSX:CTS) is a Toronto-based company that provides software-enabled IT and cloud solutions in the United States and Canada. Shares of this tech stock have dropped 20% month-over-month as of close on April 25. Meanwhile, the stock has plunged 33% so far in 2023.
This company released its fourth quarter and full year fiscal 2022 results on March 15, 2023. In the fourth quarter, Converge achieved record breaking results. The company reported gross revenue growth of 49% to $956 million. Meanwhile, gross profit surged 46% to $168 million in Q4 2022. Adjusted EBITDA also increased 24% from the fourth quarter of fiscal 2021 to $43.1 million.
For the full year, this company posted gross revenue growth of 57% to $3.09 billion. Shaune Maine, CEO of Converge, boasted that the company “grew faster than any comparable public provider globally, expanding gross profit by 59% year-over-year, translating to gross profit organic growth of 10.5%.” Maine predicted that Converge would improve on these results in fiscal 2023 as it looks to take advantage of high-value solution areas like data analytics.
Shares of this tech stock currently possess a price-to-earnings ratio of 25. Converge is trading in more favourable value territory compared to its industry peers. It is on track for strong earnings growth going forward.
