Little-known Pulse Seismic (TSX:PSD) is a company many investors may not have heard of. But this is also a stock that’s come on my radar. I thought I’d touch on it for a number of reasons, but most importantly because this is one undervalued stock I think could have big upside over the long term for those who are patient and willing to average into this name over time.
Let’s dive into Pulse Seismic’s recent surge over the past month (bringing the company’s year-to-date returns to more than 65%), and where this stock could be headed from here.
Can this momentum continue?
Pulse Seismic is in an interesting place in terms of the company’s overall business model. Providing two and three-dimensional seismic data systems for the energy sector, the company operates at the crossroads of the technology and energy worlds.
These two sectors are both ones I think could have tremendous long-term upside, for those who are patient. And as more oil and natural gas exploration takes place as our population grows, this is a company with a unique business model that could certainly see much more upside due to structural and cyclical forces.
In its fiscal first half of 2025, Pulse Seismic reported absolutely astronomical revenue growth of 172% year-over-year. In that context, the stock’s year-to-date rise of just 65% may seem muted. And with earnings surging more than five-fold over the same timeframe, this company is now a value story, and one that looks really compelling.
Why Pulse Seismic looks like a buy to me
Given the company’s strong underlying fundamental momentum, I think Pulse Seismic could be a hidden gem worth exploring. With excellent operational efficiency and strong margins, the kind of outsized revenue growth we’ve seen has bled through to an outsized degree to Pulse Seismic’s bottom line.
Until this trend discontinues, the company’s price-earnings multiple of just 8-times (alongside a dividend yield of nearly 2%) looks too attractive to me to be ignored. I’m going to highlight this company in future pieces, due to how attractive of an opportunity this company looks like at its current level.
Of course, things can change and the risk-on environment we’re in right now can always take a turn. But even if such a situation materializes, this is one stock I think may be worth buying at current levels and holding long term.
