Firan Technology Group (TSX:FTG) is a Canadian technology leader specializing in printed circuit boards and aerospace components. Listed on the Toronto Stock Exchange, FTG operates in two segments: FTG Circuits and FTG Aerospace. Over 70% of its revenue comes from high-complexity circuits for defence and telecommunications applications.
FTG manufactures custom-printed circuit boards that are the foundation for computer chips and avionic subsystem hardware, including backlit control panels and integrated switch panels. It focuses on high-value, specialized products rather than standard consumer electronics components.
With approximately 75% of total sales from the United States in OEM (original equipment manufacturer) and subcontract markets, FTG is positioned to capitalize on the $8-9 billion North American PCB (printed circuit board) industry.
FTG has ambitious growth targets. It aims to double its size every five years through organic growth and acquisitions while maintaining a debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio below one.
FTG’s strategic focus on operational excellence and expanding into new markets within the aerospace and defence electronics industries drives its vision as a “partner in performance” with leading companies in these sectors.
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Is the TSX tech stock a good buy right now?
Firan Technology Group delivered record financial results for the fourth quarter and full year 2024. In the fourth quarter (Q4), it reported revenue of $45 million, while annual sales surpassed $162 million, a 20% increase year over year.
“2024 was another record year for FTG, and our fourth quarter was another record quarter,” said Chief Executive Officer Brad Bourne, highlighting FTG’s strong performance across key metrics. Bookings reached $184.5 million for the year, up 25% from 2023, helping build a robust backlog of $122.4 million, a 26% increase from the previous year.
The printed circuit board and aerospace components manufacturer saw its adjusted EBITDA rise to $25.8 million, compared to $19.4 million in 2023, while adjusted net earnings increased 47% to $10.3 million. FTG maintained a strong balance sheet, ending the year with just $0.7 million in net debt despite investing over $14.7 million.
The company’s circuits business primarily drove its growth, with sales jumping 28% year over year. Comparatively, aerospace sales increased by 3%, but this was hampered by a six-week work stoppage at its Toronto facility earlier in the year.
What’s next for the TSX stock?
FTG is preparing for potential U.S. tariffs under the new administration by diversifying its global footprint. For instance, last December, it acquired FLYHT Aerospace, adding aftermarket revenue streams and expanding its customer base beyond the United States. The company is also establishing a new manufacturing facility in India, with an estimated investment of $2 million.
“The new U.S. administration appears committed to implementing tariffs on imports into the U.S. This could negatively impact FTG as we estimate about $55 million of sales to customers located in the U.S. originate at FTG sites in Canada or China,” Bourne explained.
FTG’s mitigation strategy includes prioritizing non-U.S. customers for its Canadian operations, focusing on Airbus programs over Boeing due to Airbus’s stronger market position, and strategically aligning manufacturing locations with customer geography.
For 2025, FTG expects continued growth driven by the FLYHT acquisition and mid- to high single-digit organic growth, supported by strong demand from commercial aerospace programs like China’s C919 aircraft and its expanding global operations.
Is FTG stock undervalued?
Analysts tracking the tech stock expect it to increase sales from $162 million in 2024 to $203 million in 2026. Comparatively, earnings are forecast to expand from $0.45 per share in 2024 to $0.61 per share in 2026. In the next two years, its free cash flow is forecast to improve to $22.4 million from $6.9 million.
Priced at 11.8 times forward earnings and 8.1 times forward FCF, the tech stock is cheap and trades at a discount almost 60% given consensus price targets.
