AIR CANADA (AC.CA) Stock Fundamental Analysis
TSX:AC - Toronto Stock Exchange - CA0089118776 - Common Stock - Currency: CAD
Overall AC gets a fundamental rating of 3 out of 10. We evaluated AC against 9 industry peers in the Passenger Airlines industry. While AC is still in line with the averages on profitability rating, there are concerns on its financial health. AC is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year AC was profitable.
AC had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: AC reported negative net income in multiple years.
The reported operating cash flow has been mixed in the past 5 years: AC reported negative operating cash flow in multiple years.
1.2 Ratios
AC's Return On Assets of 5.51% is amongst the best of the industry. AC outperforms 100.00% of its industry peers.
AC's Return On Equity of 72.03% is amongst the best of the industry. AC outperforms 100.00% of its industry peers.
AC has a worse Return On Invested Capital (4.60%) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.51% | ||
| ROE | 72.03% | ||
| ROIC | 4.6% |
ROA(3y)2.43%
ROA(5y)-4.11%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of AC (7.73%) is better than 100.00% of its industry peers.
In the last couple of years the Profit Margin of AC has remained more or less at the same level.
AC's Operating Margin of 5.68% is on the low side compared to the rest of the industry. AC is outperformed by 66.67% of its industry peers.
AC's Operating Margin has declined in the last couple of years.
AC has a better Gross Margin (60.90%) than 66.67% of its industry peers.
In the last couple of years the Gross Margin of AC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.68% | ||
| PM (TTM) | 7.73% | ||
| GM | 60.9% |
OM growth 3YN/A
OM growth 5Y-8.03%
PM growth 3YN/A
PM growth 5Y0.03%
GM growth 3Y10.66%
GM growth 5Y0.35%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AC is destroying value.
Compared to 1 year ago, AC has less shares outstanding
Compared to 5 years ago, AC has more shares outstanding
Compared to 1 year ago, AC has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.84, we must say that AC is in the distress zone and has some risk of bankruptcy.
AC's Altman-Z score of 0.84 is in line compared to the rest of the industry. AC outperforms 44.44% of its industry peers.
The Debt to FCF ratio of AC is 9.79, which is on the high side as it means it would take AC, 9.79 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AC (9.79) is better than 66.67% of its industry peers.
AC has a Debt/Equity ratio of 4.57. This is a high value indicating a heavy dependency on external financing.
AC has a worse Debt to Equity ratio (4.57) than 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.57 | ||
| Debt/FCF | 9.79 | ||
| Altman-Z | 0.84 |
ROIC/WACC0.7
WACC6.54%
2.3 Liquidity
A Current Ratio of 0.79 indicates that AC may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.79, AC is doing worse than 77.78% of the companies in the same industry.
AC has a Quick Ratio of 0.79. This is a bad value and indicates that AC is not financially healthy enough and could expect problems in meeting its short term obligations.
AC's Quick ratio of 0.76 is in line compared to the rest of the industry. AC outperforms 55.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
The earnings per share for AC have decreased strongly by -23.43% in the last year.
The Earnings Per Share has been growing slightly by 0.87% on average over the past years.
Looking at the last year, AC shows a small growth in Revenue. The Revenue has grown by 1.93% in the last year.
AC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.07% yearly.
EPS 1Y (TTM)-23.43%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%308.33%
Revenue 1Y (TTM)1.93%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%4.43%
3.2 Future
The Earnings Per Share is expected to decrease by -16.19% on average over the next years. This is quite bad
Based on estimates for the next years, AC will show a small growth in Revenue. The Revenue will grow by 5.48% on average per year.
EPS Next Y-40.48%
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
EPS Next 5Y-16.19%
Revenue Next Year5.78%
Revenue Next 2Y6.06%
Revenue Next 3Y6.53%
Revenue Next 5Y5.48%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 3.99, the valuation of AC can be described as very cheap.
Based on the Price/Earnings ratio, AC is valued cheaper than 100.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.79. AC is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 6.70, the valuation of AC can be described as very cheap.
Based on the Price/Forward Earnings ratio, AC is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.38, AC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.99 | ||
| Fwd PE | 6.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AC is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
AC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AC is cheaper than 77.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.51 | ||
| EV/EBITDA | 1.91 |
4.3 Compensation for Growth
AC's earnings are expected to decrease with -5.07% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)4.57
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
5. Dividend
5.1 Amount
No dividends for AC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:AC (4/25/2025, 7:00:00 PM)
14.07
-0.27 (-1.88%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners16.94%
Inst Owner ChangeN/A
Ins Owners0.18%
Ins Owner ChangeN/A
Market Cap4.54B
Analysts82.4
Price Target25.7 (82.66%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)25.16%
Min EPS beat(2)-8.01%
Max EPS beat(2)58.34%
EPS beat(4)2
Avg EPS beat(4)-50.54%
Min EPS beat(4)-256.26%
Max EPS beat(4)58.34%
EPS beat(8)5
Avg EPS beat(8)-22.44%
EPS beat(12)6
Avg EPS beat(12)-22.19%
EPS beat(16)7
Avg EPS beat(16)-17.66%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-2.12%
Max Revenue beat(2)2.21%
Revenue beat(4)1
Avg Revenue beat(4)-1.29%
Min Revenue beat(4)-3.06%
Max Revenue beat(4)2.21%
Revenue beat(8)4
Avg Revenue beat(8)0.68%
Revenue beat(12)6
Avg Revenue beat(12)0.5%
Revenue beat(16)9
Avg Revenue beat(16)1.81%
PT rev (1m)1.4%
PT rev (3m)-8.52%
EPS NQ rev (1m)-14.01%
EPS NQ rev (3m)-191.77%
EPS NY rev (1m)-14.04%
EPS NY rev (3m)-33.6%
Revenue NQ rev (1m)-0.91%
Revenue NQ rev (3m)-2.08%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.99 | ||
| Fwd PE | 6.7 | ||
| P/S | 0.2 | ||
| P/FCF | 3.51 | ||
| P/OCF | 1.16 | ||
| P/B | 1.9 | ||
| P/tB | N/A | ||
| EV/EBITDA | 1.91 |
EPS(TTM)3.53
EY25.09%
EPS(NY)2.1
Fwd EY14.93%
FCF(TTM)4.01
FCFY28.5%
OCF(TTM)12.18
OCFY86.55%
SpS68.96
BVpS7.4
TBVpS-6.37
PEG (NY)N/A
PEG (5Y)4.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.51% | ||
| ROE | 72.03% | ||
| ROCE | 6.39% | ||
| ROIC | 4.6% | ||
| ROICexc | 7.12% | ||
| ROICexgc | 10.91% | ||
| OM | 5.68% | ||
| PM (TTM) | 7.73% | ||
| GM | 60.9% | ||
| FCFM | 5.81% |
ROA(3y)2.43%
ROA(5y)-4.11%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-2.05%
ROICexc growth 3YN/A
ROICexc growth 5Y-3.33%
OM growth 3YN/A
OM growth 5Y-8.03%
PM growth 3YN/A
PM growth 5Y0.03%
GM growth 3Y10.66%
GM growth 5Y0.35%
F-Score6
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.57 | ||
| Debt/FCF | 9.79 | ||
| Debt/EBITDA | 3.56 | ||
| Cap/Depr | 146.53% | ||
| Cap/Sales | 11.84% | ||
| Interest Coverage | 1.81 | ||
| Cash Conversion | 128.35% | ||
| Profit Quality | 75.23% | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 0.84 |
F-Score6
WACC6.54%
ROIC/WACC0.7
Cap/Depr(3y)111.41%
Cap/Depr(5y)93.12%
Cap/Sales(3y)9.5%
Cap/Sales(5y)13.18%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-23.43%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%308.33%
EPS Next Y-40.48%
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
EPS Next 5Y-16.19%
Revenue 1Y (TTM)1.93%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%4.43%
Revenue Next Year5.78%
Revenue Next 2Y6.06%
Revenue Next 3Y6.53%
Revenue Next 5Y5.48%
EBIT growth 1Y-44.53%
EBIT growth 3YN/A
EBIT growth 5Y-5.21%
EBIT Next Year117.27%
EBIT Next 3Y38.41%
EBIT Next 5Y24.35%
FCF growth 1Y-53.05%
FCF growth 3YN/A
FCF growth 5Y-18.89%
OCF growth 1Y-9.03%
OCF growth 3YN/A
OCF growth 5Y-7.21%