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 9 industry peers in the Passenger Airlines industry. AC has a medium profitability rating, but doesn't score so well on its financial health evaluation. AC has a bad growth rate and is valued cheaply.
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
AC has a Return On Assets of 4.74%. This is amongst the best in 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.
With a Return On Invested Capital value of 4.38%, 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 | 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 has a Profit Margin of 6.60%. This is amongst the best in the industry. AC outperforms 100.00% of its industry peers.
AC's Profit Margin has been stable in the last couple of years.
AC has a Operating Margin of 4.91%. This is in the lower half of the industry: AC underperforms 66.67% of its industry peers.
AC's Operating Margin has declined in the last couple of years.
AC has a Gross Margin of 61.81%. This is in the better half of the industry: AC outperforms 66.67% of its industry peers.
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.
AC has less shares outstanding than it did 1 year ago.
The number of shares outstanding for AC has been increased compared to 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 0.73, we must say that AC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AC (0.73) is worse than 77.78% 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.
The Debt to FCF ratio of AC (14.72) is better than 66.67% 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.
The Debt to Equity ratio of AC (5.73) is worse than 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.73 | ||
| Debt/FCF | 14.72 | ||
| Altman-Z | 0.73 |
ROIC/WACC0.62
WACC7.08%
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.
Looking at the Current ratio, with a value of 0.63, AC is doing worse than 77.78% of the companies in the same industry.
A Quick Ratio of 0.60 indicates that AC may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.60, AC is doing worse than 77.78% of the companies in the same industry.
| 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.
The Revenue has been growing slightly by 0.33% in the past year.
AC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.07% yearly.
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 decrease in Earnings Per Share. The EPS will decrease by -0.21% on average per year.
Based on estimates for the next years, AC will show a small growth in Revenue. The Revenue will grow by 5.37% 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 Year2.01%
Revenue Next 2Y3.92%
Revenue Next 3Y4.97%
Revenue Next 5Y5.37%
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.
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
The Price/Earnings ratio is 6.36, which indicates a rather cheap valuation of AC.
Compared to the rest of the industry, the Price/Earnings ratio of AC indicates a rather cheap valuation: AC is cheaper than 100.00% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of AC to the average of the S&P500 Index (27.03), we can say AC is valued rather cheaply.
The Price/Forward Earnings ratio is 7.23, which indicates a rather cheap valuation of AC.
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 36.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.36 | ||
| Fwd PE | 7.23 |
4.2 Price Multiples
100.00% of the companies in the same industry are more expensive than AC, based on the Enterprise Value to EBITDA ratio.
AC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AC is cheaper than 77.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.98 | ||
| EV/EBITDA | 2.68 |
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)7.29
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 (8/5/2025, 7:00:00 PM)
18.89
-0.17 (-0.89%)
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 Cap5.59B
Analysts83.2
Price Target25.36 (34.25%)
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)3.61%
PT rev (3m)8.75%
EPS NQ rev (1m)1.67%
EPS NQ rev (3m)-8.09%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.97%
Revenue NQ rev (3m)-4.3%
Revenue NY rev (1m)-2.01%
Revenue NY rev (3m)-2.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.36 | ||
| Fwd PE | 7.23 | ||
| P/S | 0.25 | ||
| P/FCF | 6.98 | ||
| P/OCF | 1.46 | ||
| P/B | 3.13 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.68 |
EPS(TTM)2.97
EY15.72%
EPS(NY)2.61
Fwd EY13.82%
FCF(TTM)2.7
FCFY14.32%
OCF(TTM)12.95
OCFY68.56%
SpS75.43
BVpS6.03
TBVpS-9.09
PEG (NY)N/A
PEG (5Y)7.29
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
WACC7.08%
ROIC/WACC0.62
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-40.48%
EPS Next 2Y-13.99%
EPS Next 3Y-5.07%
EPS Next 5Y-0.21%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y51.5%
Revenue growth 5Y3.07%
Sales Q2Q%2.05%
Revenue Next Year2.01%
Revenue Next 2Y3.92%
Revenue Next 3Y4.97%
Revenue Next 5Y5.37%
EBIT growth 1Y-44.39%
EBIT growth 3YN/A
EBIT growth 5Y-5.21%
EBIT Next Year114.69%
EBIT Next 3Y37.18%
EBIT Next 5Y24.01%
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%