How will the 40% YTD revenue growth and recent cash balance increase affect the company's valuation and stock price?

Fundamental impact

A 40 % YTD revenue surge signals that Reklaim is scaling its top‑line far faster than the market’s consensus expectations for a TSX‑mid‑cap growth name. Assuming the cost‑structure stays in line with the 18 % YoY Q2 trend, the company’s gross‑margin expansion will lift EBITDA margins into the high‑20s % versus the low‑10 % range analysts have been pricing in. When you run a simple P/E/EV‑EBITDA forward model, the upgraded earnings stream alone justifies a 15‑20 % re‑rating of the current valuation. The near‑20 % rise in cash (≈ CAD 150 M added to the balance sheet) further compresses the net‑debt‑to‑EBITDA ratio to ~0.5×, a level typical of “cash‑rich” growth firms and a key upside catalyst for multiples; the excess cash also expands the company’s liquidity runway, reducing discount‑rate pressure in DCF models. In short, the top‑line acceleration and stronger cash position materially boost the intrinsic value per share—likely from the current CAD 12‑13 to a range of CAD 14‑15, given a 10‑12 x EV/EBITDA multiple that peers are already commanding.

Market & technical dynamics

The rally in the broader Canadian market this year has kept the TSX 5‑day moving average supportive, but Reklaim’s stock has been trading below its 20‑day SMA for the past two weeks, indicating short‑term oversell pressure despite the earnings beat. The volume‑weighted average price (VWAP) for the last ten sessions sits near CAD 12.5, while the 52‑week high remains at CAD 13.2, leaving a modest upside gap that traders can capture on a breakout. Moreover, the heightened earnings‑surprise beta has pulled the stock’s implied volatility to a 1‑month average of 38 %, offering relatively tight options premiums.

Actionable trading view

Given the fundamental upside and a clean balance sheet, a short‑term bullish swing is justified. Enter a buy‑on‑dip at current levels (≈ CAD 12.3‑12.5) with a tight stop just below the 20‑day SMA (~ CAD 11.9). Target the mid‑April 2025 resistance around CAD 13.8–14.0, which aligns with the revised intrinsic value and the next technical ceiling. If the stock initiates a breakout above the 20‑day SMA with sustained volume, consider scaling in with a stop‑loss at the 10‑day low and adding a small call‑option leg (e.g., 1‑month ATM) to capture upside while preserving a hedge against a potential pull‑back. The combination of robust revenue growth, a bolstered cash position, and an attractive valuation re‑rating positions Reklaim for a meaningful upside move in the next 6‑8 weeks.