AIR CANADA (AC.CA) Stock Fundamental Analysis
Canada - TSX:AC - CA0089118776 - Common Stock
17.88 CAD
-0.1 (-0.56%)
AC gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 7 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year AC was profitable.
In the past year AC had a positive cash flow from operations.
In multiple years AC reported negative net income over the last 5 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
The Return On Assets of AC (4.74%) is better than 85.71% of its industry peers.
Looking at the Return On Equity, with a value of 82.54%, AC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Return On Invested Capital of AC (4.38%) is worse than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.74% | ||
| ROE | 82.54% | ||
| ROIC | 4.38% |
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 6.60% is amongst the best of the industry. AC outperforms 85.71% 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 has a Operating Margin (4.91%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of AC has declined.
With a decent Gross Margin value of 61.81%, AC is doing good in the industry, outperforming 71.43% of the companies in the same industry.
AC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.91% | ||
| PM (TTM) | 6.6% | ||
| GM | 61.81% |
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
Compared to 1 year ago, AC has an improved debt to assets ratio.
2.2 Solvency
AC has an Altman-Z score of 0.73. 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 (0.73) is worse than 85.71% of its industry peers.
The Debt to FCF ratio of AC is 14.72, which is on the high side as it means it would take AC, 14.72 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 14.72, AC is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
A Debt/Equity ratio of 5.73 is on the high side and indicates that AC has dependencies on debt financing.
AC has a worse Debt to Equity ratio (5.73) than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.73 | ||
| Debt/FCF | 14.72 | ||
| Altman-Z | 0.73 |
ROIC/WACC0.63
WACC6.93%
2.3 Liquidity
AC has a Current Ratio of 0.63. 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 Current ratio of 0.63 is on the low side compared to the rest of the industry. AC is outperformed by 85.71% of its industry peers.
AC has a Quick Ratio of 0.63. 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 (0.60) is worse than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
AC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -25.75%.
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 0.33%.
The Revenue has been growing slightly by 3.07% on average over the past years.
EPS 1Y (TTM)-25.75%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%-38.78%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%2.05%
3.2 Future
Based on estimates for the next years, AC will show a small growth in Earnings Per Share. The EPS will grow by 5.41% on average per year.
Based on estimates for the next years, AC will show a small growth in Revenue. The Revenue will grow by 5.61% on average per year.
EPS Next Y-49.98%
EPS Next 2Y-11.31%
EPS Next 3Y-2.44%
EPS Next 5Y5.41%
Revenue Next Year0.76%
Revenue Next 2Y4.19%
Revenue Next 3Y5.06%
Revenue Next 5Y5.61%
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 accelerating.
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
AC is valuated cheaply with a Price/Earnings ratio of 6.02.
AC's Price/Earnings ratio is rather cheap when compared to the industry. AC is 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 (27.42), we can say AC is valued rather cheaply.
With a Price/Forward Earnings ratio of 6.44, 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.
AC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.02 | ||
| Fwd PE | 6.44 |
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 rather cheap when compared to the industry. AC is cheaper than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.61 | ||
| EV/EBITDA | 2.58 |
4.3 Compensation for Growth
AC's earnings are expected to decrease with -2.44% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)6.9
EPS Next 2Y-11.31%
EPS Next 3Y-2.44%
5. Dividend
5.1 Amount
AC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:AC (10/17/2025, 7:00:00 PM)
17.88
-0.1 (-0.56%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners18.67%
Inst Owner ChangeN/A
Ins Owners0.23%
Ins Owner ChangeN/A
Market Cap5.30B
Analysts81.74
Price Target25.42 (42.17%)
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)-0.04%
Min EPS beat(2)-18.71%
Max EPS beat(2)18.62%
EPS beat(4)2
Avg EPS beat(4)12.56%
Min EPS beat(4)-18.71%
Max EPS beat(4)58.34%
EPS beat(8)4
Avg EPS beat(8)-46.88%
EPS beat(12)7
Avg EPS beat(12)-15.86%
EPS beat(16)8
Avg EPS beat(16)-15.48%
Revenue beat(2)0
Avg Revenue beat(2)-3.06%
Min Revenue beat(2)-4.63%
Max Revenue beat(2)-1.49%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-4.63%
Max Revenue beat(4)2.21%
Revenue beat(8)2
Avg Revenue beat(8)-1.5%
Revenue beat(12)6
Avg Revenue beat(12)0.68%
Revenue beat(16)8
Avg Revenue beat(16)1.33%
PT rev (1m)-4.42%
PT rev (3m)0.23%
EPS NQ rev (1m)-38.23%
EPS NQ rev (3m)-51.48%
EPS NY rev (1m)-14.05%
EPS NY rev (3m)-15.95%
Revenue NQ rev (1m)-4.23%
Revenue NQ rev (3m)-5.77%
Revenue NY rev (1m)-1.24%
Revenue NY rev (3m)-3.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.02 | ||
| Fwd PE | 6.44 | ||
| P/S | 0.24 | ||
| P/FCF | 6.61 | ||
| P/OCF | 1.38 | ||
| P/B | 2.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.58 |
EPS(TTM)2.97
EY16.61%
EPS(NY)2.78
Fwd EY15.53%
FCF(TTM)2.7
FCFY15.12%
OCF(TTM)12.95
OCFY72.41%
SpS75.42
BVpS6.03
TBVpS-9.09
PEG (NY)N/A
PEG (5Y)6.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.74% | ||
| ROE | 82.54% | ||
| ROCE | 6.09% | ||
| ROIC | 4.38% | ||
| ROICexc | 6.78% | ||
| ROICexgc | 11.02% | ||
| OM | 4.91% | ||
| PM (TTM) | 6.6% | ||
| GM | 61.81% | ||
| FCFM | 3.59% |
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 Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.73 | ||
| Debt/FCF | 14.72 | ||
| Debt/EBITDA | 3.43 | ||
| Cap/Depr | 160.11% | ||
| Cap/Sales | 13.58% | ||
| Interest Coverage | 1.77 | ||
| Cash Conversion | 128.22% | ||
| Profit Quality | 54.31% | ||
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 0.73 |
F-Score6
WACC6.93%
ROIC/WACC0.63
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)-25.75%
EPS 3YN/A
EPS 5Y0.87%
EPS Q2Q%-38.78%
EPS Next Y-49.98%
EPS Next 2Y-11.31%
EPS Next 3Y-2.44%
EPS Next 5Y5.41%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%2.05%
Revenue Next Year0.76%
Revenue Next 2Y4.19%
Revenue Next 3Y5.06%
Revenue Next 5Y5.61%
EBIT growth 1Y-44.39%
EBIT growth 3YN/A
EBIT growth 5Y-5.21%
EBIT Next Year106.82%
EBIT Next 3Y38.06%
EBIT Next 5Y24.54%
FCF growth 1Y-64.06%
FCF growth 3YN/A
FCF growth 5Y-18.89%
OCF growth 1Y-0.75%
OCF growth 3YN/A
OCF growth 5Y-7.21%