Stock Analysis & Valuation Zedcor Inc. (ZDC.V)

• Previous Close: $5.94
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	42.69	619
Intrinsic value (DCF)	86.74	1360
Graham-Dodd Method	0.30	-95
Graham Formula	0.50	-92

Strategic Investment Analysis

Company Overview

Zedcor Inc. is a Canadian security technology company providing innovative surveillance solutions across Western and Central Canada. Headquartered in Calgary, Alberta, Zedcor specializes in technology-based security services including proprietary MobileyeZ security towers, remote monitoring, and security personnel. The company's core business model revolves around renting, servicing, and remotely monitoring its fleet of 265 MobileyeZ security towers, which include solar hybrid, electric, and diesel-powered units. Zedcor serves diverse industrial sectors including pipeline construction, civil and municipal construction, warehousing, auto storage yards, and solar power generation facilities. Operating in the Security & Protection Services industry within the Industrials sector, Zedcor has established itself as a technology-forward security provider since its founding in 2005. The company's focus on proprietary security tower technology and remote monitoring capabilities positions it uniquely in the Canadian security market, offering scalable solutions for temporary and permanent security needs across resource-rich Western Canada.

Investment Summary

Zedcor presents a mixed investment profile with several notable strengths and risks. The company demonstrates solid revenue generation with CAD 33 million in annual revenue and positive net income of CAD 1.63 million, indicating operational profitability. Strong operating cash flow of CAD 11 million provides financial flexibility, though significant capital expenditures of CAD 21.4 million suggest ongoing investment in fleet expansion and technology. The company's high beta of 1.488 indicates above-average volatility relative to the market, which may concern risk-averse investors. With CAD 5.8 million in cash against CAD 28.3 million in total debt, leverage remains a consideration. The company's focus on industrial security in Western Canada provides sector specialization but also creates geographic concentration risk. The absence of dividends reflects a reinvestment strategy focused on growth rather than shareholder returns.

Competitive Analysis

Zedcor's competitive positioning centers on its proprietary MobileyeZ security tower technology, which provides a distinct advantage in the mobile surveillance market. The company's fleet of 265 units, particularly the 190 solar hybrid towers, offers environmental and operational benefits that differentiate it from traditional security providers. Zedcor's technology-first approach allows for remote monitoring capabilities that reduce labor costs and increase scalability compared to conventional security guard services. The company's focus on industrial clients in Western Canada provides deep sector expertise but also creates geographic concentration risk. While larger competitors may have broader national coverage, Zedcor's specialized knowledge of the oil and gas, construction, and resource sectors in Alberta and surrounding provinces represents a meaningful competitive edge. The company's ability to serve both temporary project-based needs and permanent installations provides revenue diversification within its niche. However, Zedcor faces competition from both large national security firms and local providers, requiring continuous technology investment to maintain its advantage. The capital-intensive nature of maintaining and expanding the MobileyeZ fleet presents both a barrier to entry for smaller competitors and a ongoing cost challenge for Zedcor itself.

Major Competitors

• Gardaworld (GDI.TO): Gardaworld is Canada's largest security services company with global operations, offering comprehensive security solutions including guarding, cash services, and technology solutions. Their massive scale and national coverage provide significant competitive advantages in bidding for large contracts. However, their broad focus may limit specialization in mobile surveillance technology where Zedcor excels. Gardaworld's extensive resources allow for competitive pricing but may lack the technological specialization of Zedcor's MobileyeZ platform.
• Securitas AB (SECU.TO): Securitas is a global security services giant with strong presence in Canada, offering integrated security solutions including technology, monitoring, and guarding services. Their international scale and technological resources pose significant competition to Zedcor. However, Securitas's broad global focus may limit their specialization in the specific mobile tower surveillance market that Zedcor dominates in Western Canada. Their size enables competitive pricing but may reduce flexibility in serving specialized industrial clients.
• ADT Inc. (ADT): ADT is a leading residential and commercial security monitoring company with technology-focused solutions. While primarily focused on fixed-site security, ADT's technological capabilities and brand recognition represent competitive pressure. However, ADT's limited presence in mobile surveillance and industrial security in Canada reduces direct competition with Zedcor. Their strength in residential and commercial monitoring differs from Zedcor's industrial focus, creating distinct market segments.
• Black Diamond Group Limited (BRP.V): Black Diamond provides modular space and workforce solutions, including some security services, primarily to resource and construction sectors in Western Canada. Their overlapping client base in industrial sectors creates competitive pressure. However, Black Diamond's focus on workforce accommodations differs from Zedcor's specialized security technology approach. Their established presence in Western Canadian industrial markets represents both competitive threat and potential partnership opportunity.