AIR CANADA (AC.CA) Stock Fundamental Analysis
TSX:AC - Toronto Stock Exchange - CA0089118776 - Common Stock - Currency: CAD
AC gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 10 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 valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
AC had positive earnings in the past year.
In the past year AC had a positive cash flow from operations.
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
Looking at the Return On Assets, with a value of 5.51%, AC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Return On Equity value of 72.03%, AC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
AC has a worse Return On Invested Capital (4.60%) than 70.00% 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
AC has a better Profit Margin (7.73%) than 100.00% of its industry peers.
AC's Profit Margin has been stable in the last couple of years.
AC's Operating Margin of 5.68% is on the low side compared to the rest of the industry. AC is outperformed by 70.00% of its industry peers.
In the last couple of years the Operating Margin of AC has declined.
AC's Gross Margin of 60.90% is fine compared to the rest of the industry. AC outperforms 70.00% 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.
The number of shares outstanding for AC has been reduced compared to 1 year ago.
Compared to 5 years ago, AC has more shares outstanding
AC has a better debt/assets ratio than last year.
2.2 Solvency
AC has an Altman-Z score of 0.85. This is a bad value and indicates that AC is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of AC (0.85) is worse than 60.00% 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.
AC has a better Debt to FCF ratio (9.79) than 70.00% of its industry peers.
A Debt/Equity ratio of 4.57 is on the high side and indicates that AC has dependencies on debt financing.
AC has a Debt to Equity ratio of 4.57. This is amonst the worse of the industry: AC underperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.57 | ||
| Debt/FCF | 9.79 | ||
| Altman-Z | 0.85 |
ROIC/WACC0.66
WACC6.95%
2.3 Liquidity
A Current Ratio of 0.79 indicates that AC may have some problems paying its short term obligations.
With a Current ratio value of 0.79, AC is not doing good in the industry: 80.00% of the companies in the same industry are doing better.
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.
Looking at the Quick ratio, with a value of 0.76, AC is doing worse than 80.00% of the companies in the same industry.
| 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 -25.54% in the last year.
Measured over the past years, AC shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.39% on average per year.
The Revenue has been growing slightly by 1.93% in the past 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)-25.54%
EPS 3YN/A
EPS 5Y-3.39%
EPS Q2Q%-474.77%
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 -2.70% on average over the next years.
The Revenue is expected to grow by 6.58% on average over the next years.
EPS Next Y-33.52%
EPS Next 2Y-10.64%
EPS Next 3Y0.53%
EPS Next 5Y-2.7%
Revenue Next Year5.27%
Revenue Next 2Y5.74%
Revenue Next 3Y6.26%
Revenue Next 5Y6.58%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 3.77, which indicates a rather cheap valuation of AC.
Compared to the rest of the industry, the Price/Earnings ratio of AC indicates a rather cheap valuation: AC is cheaper than 100.00% of the companies listed in the same industry.
AC is valuated cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 6.89, which indicates a rather cheap valuation of AC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AC indicates a rather cheap valuation: AC is cheaper than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, AC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.77 | ||
| Fwd PE | 6.89 |
4.2 Price Multiples
AC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AC is cheaper than 100.00% of the companies in the same industry.
90.00% of the companies in the same industry are more expensive than AC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.26 | ||
| EV/EBITDA | 2.2 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-10.64%
EPS Next 3Y0.53%
5. Dividend
5.1 Amount
No dividends for AC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:AC (2/21/2025, 7:00:00 PM)
16.84
-0.38 (-2.21%)
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 Cap5.51B
Analysts82.5
Price Target26.72 (58.67%)
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)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)0.09%
Min Revenue beat(2)-2.12%
Max Revenue beat(2)2.29%
Revenue beat(4)1
Avg Revenue beat(4)-1.27%
Min Revenue beat(4)-3.06%
Max Revenue beat(4)2.29%
Revenue beat(8)4
Avg Revenue beat(8)0.69%
Revenue beat(12)6
Avg Revenue beat(12)0.51%
Revenue beat(16)9
Avg Revenue beat(16)1.82%
PT rev (1m)-4.91%
PT rev (3m)18.38%
EPS NQ rev (1m)-61.3%
EPS NQ rev (3m)-945.72%
EPS NY rev (1m)-22.76%
EPS NY rev (3m)-8.52%
Revenue NQ rev (1m)-0.61%
Revenue NQ rev (3m)-1.42%
Revenue NY rev (1m)0.38%
Revenue NY rev (3m)-0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.77 | ||
| Fwd PE | 6.89 | ||
| P/S | 0.25 | ||
| P/FCF | 4.26 | ||
| P/OCF | 1.4 | ||
| P/B | 2.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.2 |
EPS(TTM)4.47
EY26.54%
EPS(NY)2.44
Fwd EY14.51%
FCF(TTM)3.96
FCFY23.5%
OCF(TTM)12.02
OCFY71.37%
SpS68.06
BVpS7.3
TBVpS-6.28
PEG (NY)N/A
PEG (5Y)N/A
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 | 0.85 |
F-Score6
WACC6.95%
ROIC/WACC0.66
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)-25.54%
EPS 3YN/A
EPS 5Y-3.39%
EPS Q2Q%-474.77%
EPS Next Y-33.52%
EPS Next 2Y-10.64%
EPS Next 3Y0.53%
EPS Next 5Y-2.7%
Revenue 1Y (TTM)1.93%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%4.43%
Revenue Next Year5.27%
Revenue Next 2Y5.74%
Revenue Next 3Y6.26%
Revenue Next 5Y6.58%
EBIT growth 1Y-44.53%
EBIT growth 3YN/A
EBIT growth 5Y-5.21%
EBIT Next Year129.26%
EBIT Next 3Y41.56%
EBIT Next 5Y32.64%
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%