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Water Treatment Co. Poised for Another Record Year in 2024
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After reporting 2023 full-year financial results, BQE Water looks like its set up for another record year, according to an Atrium Research note.

BQE Water (BQE:TSXV;BTQNF:OTC) reported its fourth quarter (Q4) and full-year 2023 financial results yesterday, beating expectations on revenue and aligning with EBITDA estimates, as reported by Atrium Research analysts Nicholas Cortellucci and Ben Pirie in an April 26, 2024 research note.

"Q4 marked another excellent quarter for BQE, beating our estimates on revenue and being in line with EBITDA. The beat was driven by the operation services (recurring) segment, which grew 114% YoY," the analysts commented. "We remain highly confident in our investment thesis in BQE, which was laid out in our initiation report last month."

Cortellucci and Pirie maintained their Buy rating on BQE Water and increased their target price to CA$71.00/share from CA$55.00/share, based on 11.0x 2025E EBITDA.

In Q4/23, BQE Water's proportional revenue reached CA$5.4M (+21% YoY), surpassing the analysts' estimate of CA$4.2M. The company's gross margin was 55%, compared to the expected 45% and 41% in Q4/22. Adjusted EBITDA came in at CA$541K (10% margin), close to the analysts' estimate of CA$600K and a significant improvement from the (CA$0.1M) in Q4/22.

For the full year 2023, BQE Water's proportional revenue was CA$22.7M (+20% YoY), exceeding the expected CA$21.5M. Gross margin was 50%, compared to the estimated 48% and 42% in 2022. Adjusted EBITDA reached CA$4.7M (20% margin), in line with the analysts' estimate and up from CA$3.1M (16% margin) in 2022.

"BQE remains well positioned for another record year in 2024; we are expecting 8% revenue growth and 36% EBITDA growth," the analysts noted, highlighting the company's strong performance and growth prospects.

BQE Water's strategic focus on expanding its recurring revenue stream through its operation services segment has been a key driver of its success. The company's technical expertise and innovative water treatment solutions have positioned it as a leader in the industry, with a growing client base across various sectors, including mining, oil and gas, and industrial wastewater treatment.

The company's management team, led by CEO David Kratochvil, has been instrumental in executing its growth strategy and securing new contracts. BQE Water's strong financial position, with a healthy balance sheet and increasing cash flow generation, provides the company with the flexibility to pursue further growth opportunities and strategic partnerships.

With a target price of CA$71.00/share, Atrium Research sees significant upside potential for BQE Water's stock as the company continues to deliver strong financial results and capitalize on the growing demand for sustainable water treatment solutions.

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  1.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Atrium Research, BQE Water, April 26, 2024

Analyst Certification Each authoring analyst of Atrium Research on this report certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated securities discussed (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the research, (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer, (iv) the analyst does not own common shares, options, or warrants in the company under coverage, and (v) the analysts adhere to the CFA Institute guidelines for analyst independence.

About Atrium Research Atrium Research provides institutional quality issuer paid research on public equities in North America. Our investment philosophy takes a 3-5 year view on equities currently being overlooked by the market. Our research process emphasizes understanding the key performance metrics for each specific company, trustworthy management teams, unit economics, and an in-depth valuation analysis. For further information on our team, please visit

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