AIR CANADA (AC.CA) Stock Fundamental Analysis
TSX:AC - CA0089118776 - Common Stock
19.47 CAD
-0.14 (-0.71%)
Overall AC gets a fundamental rating of 4 out of 10. We evaluated AC against 8 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, while showing a decent growth score. This is a good combination!
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.
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
AC's Return On Assets of 4.74% is amongst the best of the industry. AC outperforms 100.00% 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.
Looking at the Return On Invested Capital, with a value of 4.38%, AC is doing worse than 62.50% of the companies in the same industry.
| 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
With an excellent Profit Margin value of 6.60%, 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.
The Operating Margin of AC (4.91%) is worse than 62.50% of its industry peers.
In the last couple of years the Operating Margin of AC has declined.
AC has a better Gross Margin (61.81%) 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 | 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
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
The number of shares outstanding for AC has been increased compared to 5 years ago.
The debt/assets ratio for AC has been reduced compared to a year ago.
2.2 Solvency
AC has an Altman-Z score of 0.74. 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 (0.74) is worse than 75.00% of its industry peers.
AC has a debt to FCF ratio of 14.72. This is a negative value and a sign of low solvency as AC would need 14.72 years to pay back of all of its debts.
AC's Debt to FCF ratio of 14.72 is fine compared to the rest of the industry. AC outperforms 75.00% of its industry peers.
AC has a Debt/Equity ratio of 5.73. This is a high value indicating a heavy dependency on external financing.
AC's Debt to Equity ratio of 5.73 is on the low side compared to the rest of the industry. AC is outperformed by 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.73 | ||
| Debt/FCF | 14.72 | ||
| Altman-Z | 0.74 |
ROIC/WACC0.61
WACC7.2%
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 has a worse Current ratio (0.63) than 75.00% of its industry peers.
A Quick Ratio of 0.60 indicates that AC may have some problems paying its short term obligations.
With a Quick ratio value of 0.60, AC is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
The earnings per share for AC have decreased strongly by -25.75% in the last year.
Measured over the past 5 years, AC shows a small growth in Earnings Per Share. The EPS has been growing by 0.87% on average per year.
Looking at the last year, AC shows a small growth in Revenue. The Revenue has grown by 0.33% 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)-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
AC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.14% yearly.
Based on estimates for the next years, AC will show a small growth in Revenue. The Revenue will grow by 5.38% on average per year.
EPS Next Y-41.8%
EPS Next 2Y-9.88%
EPS Next 3Y-2.41%
EPS Next 5Y5.14%
Revenue Next Year5.07%
Revenue Next 2Y5.64%
Revenue Next 3Y5.13%
Revenue Next 5Y5.38%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 6.56 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 27.17.
With a Price/Forward Earnings ratio of 6.79, the valuation of AC can be described as very cheap.
AC's Price/Forward Earnings ratio is rather cheap when compared to the industry. AC is cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.78, AC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.56 | ||
| Fwd PE | 6.79 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AC indicates a rather cheap valuation: AC is cheaper than 87.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.2 | ||
| EV/EBITDA | 2.73 |
4.3 Compensation for Growth
AC's earnings are expected to decrease with -2.41% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)7.52
EPS Next 2Y-9.88%
EPS Next 3Y-2.41%
5. Dividend
5.1 Amount
No dividends for AC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:AC (8/28/2025, 7:00:00 PM)
19.47
-0.14 (-0.71%)
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 Cap5.77B
Analysts83.2
Price Target26.15 (34.31%)
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)3.09%
PT rev (3m)14.79%
EPS NQ rev (1m)-1.24%
EPS NQ rev (3m)-8.5%
EPS NY rev (1m)-2.21%
EPS NY rev (3m)-2.21%
Revenue NQ rev (1m)0.69%
Revenue NQ rev (3m)-4.33%
Revenue NY rev (1m)0.93%
Revenue NY rev (3m)0.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.56 | ||
| Fwd PE | 6.79 | ||
| P/S | 0.26 | ||
| P/FCF | 7.2 | ||
| P/OCF | 1.5 | ||
| P/B | 3.23 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.73 |
EPS(TTM)2.97
EY15.25%
EPS(NY)2.87
Fwd EY14.72%
FCF(TTM)2.7
FCFY13.89%
OCF(TTM)12.95
OCFY66.51%
SpS75.42
BVpS6.03
TBVpS-9.09
PEG (NY)N/A
PEG (5Y)7.52
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 | 0.74 |
F-Score6
WACC7.2%
ROIC/WACC0.61
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-41.8%
EPS Next 2Y-9.88%
EPS Next 3Y-2.41%
EPS Next 5Y5.14%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%2.05%
Revenue Next Year5.07%
Revenue Next 2Y5.64%
Revenue Next 3Y5.13%
Revenue Next 5Y5.38%
EBIT growth 1Y-44.39%
EBIT growth 3YN/A
EBIT growth 5Y-5.21%
EBIT Next Year114.69%
EBIT Next 3Y37.18%
EBIT Next 5Y24.3%
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%