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 9 industry peers in the Passenger Airlines industry. There are concerns on the financial health of AC while its profitability can be described as average. 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.
AC had a positive operating cash flow in the past year.
In multiple years AC reported negative net income over the last 5 years.
In multiple years AC reported negative operating cash flow during the last 5 years.
1.2 Ratios
The Return On Assets of AC (5.32%) is better than 100.00% of its industry peers.
AC has a better Return On Equity (85.29%) than 100.00% of its industry peers.
With a Return On Invested Capital value of 4.33%, AC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| 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
AC's Profit Margin of 7.64% is amongst the best of the industry. AC outperforms 100.00% of its industry peers.
AC's Profit Margin has been stable in the last couple of years.
The Operating Margin of AC (5.15%) is worse than 66.67% of its industry peers.
In the last couple of years the Operating Margin of AC has declined.
Looking at the Gross Margin, with a value of 60.98%, AC is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
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
AC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, AC has less shares outstanding
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
AC has an Altman-Z score of 0.76. This is a bad value and indicates that AC is not financially healthy and even has some risk of bankruptcy.
AC has a Altman-Z score of 0.76. This is in the lower half of the industry: AC underperforms 66.67% of its industry peers.
The Debt to FCF ratio of AC is 11.90, which is on the high side as it means it would take AC, 11.90 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 11.90, AC is doing good in the industry, outperforming 66.67% of the companies in the same industry.
AC has a Debt/Equity ratio of 5.38. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AC (5.38) is worse than 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.38 | ||
| Debt/FCF | 11.9 | ||
| Altman-Z | 0.76 |
ROIC/WACC0.6
WACC7.19%
2.3 Liquidity
A Current Ratio of 0.70 indicates that AC may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.70, AC is doing worse than 77.78% of the companies in the same industry.
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.
The Quick ratio of AC (0.67) is worse than 77.78% of its industry peers.
| 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 -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 0.24% in the last year.
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)-23.43%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%-36.59%
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 very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -16.19% yearly.
The Revenue is expected to grow by 5.48% on average over the next years.
EPS Next Y-40.48%
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
EPS Next 5Y-16.19%
Revenue Next Year4.1%
Revenue Next 2Y5.25%
Revenue Next 3Y5.92%
Revenue Next 5Y5.48%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 5.27, 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.
When comparing the Price/Earnings ratio of AC to the average of the S&P500 Index (25.91), we can say AC is valued rather cheaply.
A Price/Forward Earnings ratio of 7.13 indicates a rather cheap valuation of AC.
100.00% of the companies in the same industry are more expensive than AC, based on the Price/Forward Earnings ratio.
AC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.27 | ||
| Fwd PE | 7.13 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AC indicates a rather cheap valuation: AC is cheaper than 100.00% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, AC is valued a bit cheaper than 77.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.62 | ||
| EV/EBITDA | 2.64 |
4.3 Compensation for Growth
A cheap valuation may be justified as AC's earnings are expected to decrease with -5.07% in the coming years.
PEG (NY)N/A
PEG (5Y)6.05
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
5. Dividend
5.1 Amount
AC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:AC (5/22/2025, 7:00:00 PM)
18.62
+0.26 (+1.42%)
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 Cap6.01B
Analysts80.8
Price Target22.78 (22.34%)
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)-1.27%
Min Revenue beat(2)-4.75%
Max Revenue beat(2)2.21%
Revenue beat(4)1
Avg Revenue beat(4)-1.93%
Min Revenue beat(4)-4.75%
Max Revenue beat(4)2.21%
Revenue beat(8)3
Avg Revenue beat(8)-1.03%
Revenue beat(12)6
Avg Revenue beat(12)0.55%
Revenue beat(16)8
Avg Revenue beat(16)1.15%
PT rev (1m)-11.38%
PT rev (3m)-18.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-9.86%
EPS NY rev (1m)0%
EPS NY rev (3m)-19.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.4%
Revenue NY rev (1m)-1.58%
Revenue NY rev (3m)-0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.27 | ||
| Fwd PE | 7.13 | ||
| P/S | 0.27 | ||
| P/FCF | 5.62 | ||
| P/OCF | 1.56 | ||
| P/B | 3.02 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.64 |
EPS(TTM)3.53
EY18.96%
EPS(NY)2.61
Fwd EY14.02%
FCF(TTM)3.31
FCFY17.79%
OCF(TTM)11.97
OCFY64.3%
SpS68.87
BVpS6.17
TBVpS-7.63
PEG (NY)N/A
PEG (5Y)6.05
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
WACC7.19%
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)-23.43%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%-36.59%
EPS Next Y-40.48%
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
EPS Next 5Y-16.19%
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 5Y5.48%
EBIT growth 1Y-50.37%
EBIT growth 3YN/A
EBIT growth 5Y-5.21%
EBIT Next Year117.27%
EBIT Next 3Y38.41%
EBIT Next 5Y24.35%
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%