AECON GROUP INC (ARE.CA) Stock Fundamental Analysis
Canada • Toronto Stock Exchange • TSX:ARE • CA00762V1094
35.3 CAD
-0.44 (-1.23%)
Last: Jan 30, 2026, 07:00 PM
Taking everything into account, ARE scores 3 out of 10 in our fundamental rating. ARE was compared to 8 industry peers in the Construction & Engineering industry. Both the profitability and financial health of ARE have multiple concerns. ARE is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year ARE was profitable.
- In the past year ARE has reported a negative cash flow from operations.
- Of the past 5 years ARE 4 years were profitable.
- In multiple years ARE reported negative operating cash flow during the last 5 years.
1.2 Ratios
- ARE's Return On Assets of 0.23% is on the low side compared to the rest of the industry. ARE is outperformed by 75.00% of its industry peers.
- The Return On Equity of ARE (0.92%) is worse than 75.00% of its industry peers.
- ARE has a Return On Invested Capital of 1.63%. This is in the lower half of the industry: ARE underperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.23% | ||
| ROE | 0.92% | ||
| ROIC | 1.63% |
ROA(3y)1.36%
ROA(5y)1.65%
ROE(3y)4.06%
ROE(5y)5.54%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- ARE's Profit Margin of 0.16% is on the low side compared to the rest of the industry. ARE is outperformed by 62.50% of its industry peers.
- Looking at the Operating Margin, with a value of 0.62%, ARE is doing worse than 62.50% of the companies in the same industry.
- ARE's Gross Margin of 6.92% is on the low side compared to the rest of the industry. ARE is outperformed by 62.50% of its industry peers.
- ARE's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.62% | ||
| PM (TTM) | 0.16% | ||
| GM | 6.92% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-22.44%
GM growth 5Y-16.54%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARE is destroying value.
- Compared to 1 year ago, ARE has more shares outstanding
- Compared to 5 years ago, ARE has more shares outstanding
- Compared to 1 year ago, ARE has a worse debt to assets ratio.
2.2 Solvency
- ARE has an Altman-Z score of 2.15. This is not the best score and indicates that ARE is in the grey zone with still only limited risk for bankruptcy at the moment.
- The Altman-Z score of ARE (2.15) is worse than 75.00% of its industry peers.
- ARE has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
- ARE's Debt to Equity ratio of 0.43 is fine compared to the rest of the industry. ARE outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.15 |
ROIC/WACC0.17
WACC9.38%
2.3 Liquidity
- A Current Ratio of 1.15 indicates that ARE should not have too much problems paying its short term obligations.
- ARE's Current ratio of 1.15 is fine compared to the rest of the industry. ARE outperforms 62.50% of its industry peers.
- ARE has a Quick Ratio of 1.14. This is a normal value and indicates that ARE is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of ARE (1.14) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 110.09% over the past year.
- Looking at the last year, ARE shows a very strong growth in Revenue. The Revenue has grown by 25.68%.
- The Revenue has been growing slightly by 4.16% on average over the past years.
EPS 1Y (TTM)110.09%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-37.65%
Revenue 1Y (TTM)25.68%
Revenue growth 3Y2.18%
Revenue growth 5Y4.16%
Sales Q2Q%19.98%
3.2 Future
- ARE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 44.25% yearly.
- ARE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.59% yearly.
EPS Next Y121.25%
EPS Next 2Y89.11%
EPS Next 3Y58.17%
EPS Next 5Y44.25%
Revenue Next Year26.6%
Revenue Next 2Y15.48%
Revenue Next 3Y12.96%
Revenue Next 5Y19.59%
3.3 Evolution
- 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
- ARE is valuated quite expensively with a Price/Earnings ratio of 320.91.
- Based on the Price/Earnings ratio, ARE is valued a bit more expensive than 75.00% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.30. ARE is valued rather expensively when compared to this.
- With a Price/Forward Earnings ratio of 21.74, ARE is valued on the expensive side.
- ARE's Price/Forward Earnings ratio is rather cheap when compared to the industry. ARE is cheaper than 87.50% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of ARE to the average of the S&P500 Index (25.57), we can say ARE is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 320.91 | ||
| Fwd PE | 21.74 |
4.2 Price Multiples
- ARE's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. ARE is more expensive than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 21.3 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- ARE's earnings are expected to grow with 58.17% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.65
PEG (5Y)N/A
EPS Next 2Y89.11%
EPS Next 3Y58.17%
5. Dividend
5.1 Amount
- ARE has a Yearly Dividend Yield of 2.13%. Purely for dividend investing, there may be better candidates out there.
- ARE's Dividend Yield is rather good when compared to the industry average which is at 0.90. ARE pays more dividend than 87.50% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, ARE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.13% |
5.2 History
- The dividend of ARE is nicely growing with an annual growth rate of 6.05%!
- ARE has paid a dividend for at least 10 years, which is a reliable track record.
- ARE has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.05%
Div Incr Years1
Div Non Decr Years17
5.3 Sustainability
- ARE pays out 563.75% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of ARE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP563.75%
EPS Next 2Y89.11%
EPS Next 3Y58.17%
AECON GROUP INC / ARE.CA FAQ
What is the fundamental rating for ARE stock?
ChartMill assigns a fundamental rating of 3 / 10 to ARE.CA.
What is the valuation status of AECON GROUP INC (ARE.CA) stock?
ChartMill assigns a valuation rating of 2 / 10 to AECON GROUP INC (ARE.CA). This can be considered as Overvalued.
Can you provide the profitability details for AECON GROUP INC?
AECON GROUP INC (ARE.CA) has a profitability rating of 1 / 10.
What is the valuation of AECON GROUP INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for AECON GROUP INC (ARE.CA) is 320.91 and the Price/Book (PB) ratio is 2.44.
What is the financial health of AECON GROUP INC (ARE.CA) stock?
The financial health rating of AECON GROUP INC (ARE.CA) is 3 / 10.