AIR CANADA (AC.CA) Stock Fundamental Analysis
TSX:AC - Toronto Stock Exchange - CA0089118776 - Common Stock - Currency: CAD
We assign a fundamental rating of 3 out of 10 to AC. AC was compared to 8 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
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.
In multiple years AC reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.32%, AC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
AC's Return On Equity of 85.29% is amongst the best of the industry. AC outperforms 100.00% of its industry peers.
AC has a worse Return On Invested Capital (4.33%) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.32% | ||
| ROE | 85.29% | ||
| ROIC | 4.33% |
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
With an excellent Profit Margin value of 7.64%, AC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
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 5.15% is on the low side compared to the rest of the industry. AC is outperformed by 62.50% of its industry peers.
AC's Operating Margin has declined in the last couple of years.
AC has a better Gross Margin (60.98%) than 75.00% 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 | 5.15% | ||
| PM (TTM) | 7.64% | ||
| GM | 60.98% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AC is destroying value.
The number of shares outstanding for AC has been reduced compared to 1 year ago.
AC has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, AC has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.76, we must say that AC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.76, AC is doing worse than 75.00% of the companies in the same industry.
AC has a debt to FCF ratio of 11.90. This is a negative value and a sign of low solvency as AC would need 11.90 years to pay back of all of its debts.
AC's Debt to FCF ratio of 11.90 is fine compared to the rest of the industry. AC outperforms 75.00% of its industry peers.
A Debt/Equity ratio of 5.38 is on the high side and indicates that AC has dependencies on debt financing.
AC has a Debt to Equity ratio of 5.38. This is in the lower half of the industry: AC underperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.38 | ||
| Debt/FCF | 11.9 | ||
| Altman-Z | 0.76 |
ROIC/WACC0.6
WACC7.18%
2.3 Liquidity
A Current Ratio of 0.70 indicates that AC may have some problems paying its short term obligations.
With a Current ratio value of 0.70, AC is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
AC has a Quick Ratio of 0.70. 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 0.67, AC is doing worse than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
The earnings per share for AC have decreased strongly by -31.21% in the last year.
AC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.87% yearly.
AC shows a small growth in Revenue. In the last year, the Revenue has grown by 0.24%.
Measured over the past years, AC shows a small growth in Revenue. The Revenue has been growing by 3.07% on average per year.
EPS 1Y (TTM)-31.21%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%-66.67%
Revenue 1Y (TTM)0.24%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%-0.57%
3.2 Future
AC is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.21% yearly.
Based on estimates for the next years, AC will show a small growth in Revenue. The Revenue will grow by 5.10% on average per year.
EPS Next Y-40.48%
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
EPS Next 5Y-0.21%
Revenue Next Year4.1%
Revenue Next 2Y5.25%
Revenue Next 3Y5.92%
Revenue Next 5Y5.1%
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.
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 5.53, which indicates a rather cheap valuation of AC.
Based on the Price/Earnings ratio, AC is valued cheaper than 100.00% of the companies in the same industry.
AC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.32.
A Price/Forward Earnings ratio of 7.10 indicates a rather cheap valuation of AC.
Based on the Price/Forward Earnings ratio, AC is valued cheaper than 100.00% of the companies in the same industry.
AC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.53 | ||
| Fwd PE | 7.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AC is valued cheaper than 100.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AC is valued a bit cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.59 | ||
| EV/EBITDA | 2.63 |
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)6.34
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 (6/13/2025, 7:00:00 PM)
18.53
-0.24 (-1.28%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners15.43%
Inst Owner ChangeN/A
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap5.98B
Analysts83.2
Price Target24.48 (32.11%)
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)5.3%
Min EPS beat(2)-8.01%
Max EPS beat(2)18.62%
EPS beat(4)3
Avg EPS beat(4)18.18%
Min EPS beat(4)-8.01%
Max EPS beat(4)58.34%
EPS beat(8)5
Avg EPS beat(8)-23.92%
EPS beat(12)7
Avg EPS beat(12)-16.48%
EPS beat(16)8
Avg EPS beat(16)-14.72%
Revenue beat(2)1
Avg Revenue beat(2)-1.21%
Min Revenue beat(2)-4.63%
Max Revenue beat(2)2.21%
Revenue beat(4)1
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-4.63%
Max Revenue beat(4)2.21%
Revenue beat(8)3
Avg Revenue beat(8)-1.02%
Revenue beat(12)6
Avg Revenue beat(12)0.56%
Revenue beat(16)8
Avg Revenue beat(16)1.16%
PT rev (1m)7.46%
PT rev (3m)-3.43%
EPS NQ rev (1m)6.31%
EPS NQ rev (3m)4.57%
EPS NY rev (1m)0%
EPS NY rev (3m)-14.04%
Revenue NQ rev (1m)-3.42%
Revenue NQ rev (3m)-3.86%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.53 | ||
| Fwd PE | 7.1 | ||
| P/S | 0.27 | ||
| P/FCF | 5.59 | ||
| P/OCF | 1.55 | ||
| P/B | 3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.63 |
EPS(TTM)3.35
EY18.08%
EPS(NY)2.61
Fwd EY14.09%
FCF(TTM)3.31
FCFY17.88%
OCF(TTM)11.97
OCFY64.61%
SpS68.87
BVpS6.17
TBVpS-7.63
PEG (NY)N/A
PEG (5Y)6.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.32% | ||
| ROE | 85.29% | ||
| ROCE | 6.02% | ||
| ROIC | 4.33% | ||
| ROICexc | 6.9% | ||
| ROICexgc | 11.02% | ||
| OM | 5.15% | ||
| PM (TTM) | 7.64% | ||
| GM | 60.98% | ||
| FCFM | 4.81% |
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-Score5
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.38 | ||
| Debt/FCF | 11.9 | ||
| Debt/EBITDA | 3.57 | ||
| Cap/Depr | 150.92% | ||
| Cap/Sales | 12.58% | ||
| Interest Coverage | 1.83 | ||
| Cash Conversion | 128.97% | ||
| Profit Quality | 62.92% | ||
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.67 | ||
| Altman-Z | 0.76 |
F-Score5
WACC7.18%
ROIC/WACC0.6
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)-31.21%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%-66.67%
EPS Next Y-40.48%
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
EPS Next 5Y-0.21%
Revenue 1Y (TTM)0.24%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%-0.57%
Revenue Next Year4.1%
Revenue Next 2Y5.25%
Revenue Next 3Y5.92%
Revenue Next 5Y5.1%
EBIT growth 1Y-50.37%
EBIT growth 3YN/A
EBIT growth 5Y-5.21%
EBIT Next Year114.69%
EBIT Next 3Y37.18%
EBIT Next 5Y23.7%
FCF growth 1Y-36.82%
FCF growth 3YN/A
FCF growth 5Y-18.89%
OCF growth 1Y12.39%
OCF growth 3YN/A
OCF growth 5Y-7.21%