Printing and marketing services company Data Communications Management Corp. (DCM:TSX; DCMDF:OTCQX) announced that its revenue for the third quarter of 2022 was up 11.4% or CA$6.5 million YOY.

The company’s stock has been “nudging higher toward an upside breakout,” technical analyst Clive Maund of CliveMaund.com wrote.

Its gross profit was up 15.8%, its net income rose 175.8%, and EDITDA rose 25.7% over that time, the company said.

Over the nine months that ended Sept. 30, revenue was up 15.1%, gross profit was up 17.1%, net income was up 201%, and EDITDA was up 34.2% compared to 2021.

The company’s stock has been “nudging higher toward an upside breakout,” technical analyst Clive Maund of CliveMaund.com wrote.

“With volume indicators overall positive, momentum-swinging positive again, and moving averages in quite strongly bullish alignment, it is in a position to break into another upleg imminently,” he wrote shortly before its stock went up CA$0.04 this week.

Debt was also lowered by 26.2% or CA$8.9 million to CA$25.1 million, the company said.

The Catalyst

This is not the first time the company has reported impressive growth. It continues to gain momentum after COVID and posted a 23.4% increase in revenue for the second quarter of 2022 compared to Q2 2021, results which analyst Noel Atkinson of Clarus Securities called “monster.”

“DCM achieved a spectacular quarter, driven by strong customer demand and the ability to start passing through some input cost increases to clients,” he wrote in an August update note.

Atkinson reiterated his Buy rating for the stock then and raised his target from CA$2.50 to CA$3.

“We have now delivered three sequential quarters of year over year growth, bringing our revenue up just over 15%,” DCM President and Chief Executive Officer Richard Kellam said. “This growth has been driven by a combination of expansion revenue with existing clients and new business wins of over CA$30 million through the year.”

The Digital Journey

In 2021, the company launched its digital asset management (DAM) cloud solution, ASMBL, to manage corporate media files and other content. The technology has the potential to become a substantial contributor to DCM’s income as it is deployed to the company’s 2,500 corporate clients.

“We continue to make positive progress on our digital journey,” Kellam said. “Substantially, all our new business wins are tech-enabled, and our digitally enabled subscription service and fees are pacing nicely ahead of last year.”

On the print side, the company also noted that it has reforested nearly 470,000 trees, “offsetting 100% of our clients’ paper use.”

DCM has been in business for 60 years. It helps companies with branding, communications, and logistics and provides customer loyalty programs, data and content management, location-specific marketing, labels and asset tracking, multimedia campaign management, and workflow management. Its clients are in many industries, including financial services, health care, emerging markets, retail, non-profits, energy, hospitality, and transportation.

Ownership, Coverage, and Share Structure

DCM Directors and officers hold 31.1% of the company, and employees own close to 4 percent through an employee share program.

The company is covered by Noel Atkinson of Clarus Securities and Chris Thompson of PI Financial. Newsletter writer Clive Maund also covers the stock. Click “See More Live Data” in the data box above to read more from them.

It has a market cap of CA$62.13 million with 44.06 million shares outstanding, with 27.3 million shares free-floating. It trades in the 52-week range of CA$1.46 and CA$1.01.