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My highest conviction Canadian inventory to purchase in 2026 is Zedcor (TSXV:ZDC), a Calgary-based cell surveillance firm.

Valued at a market cap of $627 million, Zedcor inventory has returned a staggering 1,730% over the previous 5 years. Nevertheless, it additionally down nearly 20% from all-time highs.

What Zedcor does and why its U.S. enlargement issues

Zedcor builds, rents, and remotely displays solar-powered safety towers referred to as MobileyeZ items. Consider a transportable digicam tower that watches over a building website, a retail lot, or a logistics yard, and a stay group that responds when an alarm is about off.

What units Zedcor aside is that it does all the things underneath one roof. It makes the {hardware}, rents the towers, and owns the monitoring course of.

Zedcor retains stock at its branches and its Houston plant so it might probably deploy rapidly. That “white glove” service is the way it wins contracts away from rivals who hold shoppers ready.

America is a a lot bigger market than Canada, and Zedcor is rapidly gaining traction south of the border.

The bull case for the small-cap Canadian inventory

Within the first quarter (Q1) of 2026, Zedcor reported document income of $19.4 million, a rise of 69% 12 months over 12 months. Its adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) rose 86% to $7.6 million, indicating a margin of 39%, up from 36% within the year-ago interval.

Zedcor is an organization that’s rising its high line whereas bettering revenue margins because it advantages from economies of scale.

It was the primary quarter wherein U.S. gross sales topped home income.

• American gross sales nearly tripled 12 months over 12 months to $9.7 million, accounting for greater than 50% of whole income.
• Zedcor ended the quarter with 3,261 towers, up 108% 12 months over 12 months, whereas the U.S. fleet grew 233%.
• Adjusted free money movement earlier than working-capital swings rose 80% to $6.4 million.

CEO Todd Ziniuk famous Zedcor now serves about 1,000 clients, with many small shoppers that would develop into a lot greater ones. He pointed to accounts that went from 4 towers to 60, and from 10 towards 100.

Amin Ladha, the CFO at Zedcor, said, “We additionally diversified our buyer base and diminished the contribution from anybody customary income. Within the U.S., we added a number of enterprise clients this quarter throughout homebuilding, specialty retail, business building and logistics.”

Zedcor ended Q1 with a internet debt-to-EBITDA ratio of 1.25 occasions, which is conservative. It lately raised $30.5 million in fairness and has a $75 million credit score line out there to fund future progress.

Is Zedcor inventory a purchase proper now?

Analysts monitoring the Canadian inventory challenge income to rise from $58.9 million in 2025 to $404 million in 2030. It’s forecast to report a free money movement of $120 million in 2030, in comparison with an outflow of $48.5 million in 2025.

If Zedcor inventory is priced at 15 occasions ahead free money movement, which is kind of low cost, it might greater than double inside the subsequent 4 years.

Zedcor is a small-cap progress inventory that shall be unstable within the near-term. Its revenue margins might wobble because it hires gross sales workers and scales its U.S. monitoring middle. And a building slowdown would hit demand.

However right here’s my take: it is a worthwhile, fast-growing Canadian firm increasing into an enormous U.S. market, with a widening manufacturing capability and a robust stability sheet.

Analysts, too, stay bullish and forecast the Canadian inventory to return 40% over the following 12 months, primarily based on consensus value targets.