Taking everything into account, CAE scores 4 out of 10 in our fundamental rating. CAE was compared to 73 industry peers in the Aerospace & Defense industry. There are concerns on the financial health of CAE while its profitability can be described as average. CAE is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CAE had positive earnings in the past year.
In the past year CAE had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: CAE reported negative net income in multiple years.
CAE had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With a decent Return On Assets value of 3.87%, CAE is doing good in the industry, outperforming 61.64% of the companies in the same industry.
The Return On Equity of CAE (8.45%) is better than 61.64% of its industry peers.
CAE has a Return On Invested Capital (5.96%) which is in line with its industry peers.
CAE had an Average Return On Invested Capital over the past 3 years of 5.18%. This is below the industry average of 8.56%.
The last Return On Invested Capital (5.96%) for CAE is above the 3 year average (5.18%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	3.87%
ROE	8.45%
ROIC	5.96%

ROA(3y)0.89%

ROA(5y)0.72%

ROE(3y)2.01%

ROE(5y)1.61%

ROIC(3y)5.18%

ROIC(5y)4.62%

1.3 Margins

Looking at the Profit Margin, with a value of 8.88%, CAE is in the better half of the industry, outperforming 75.34% of the companies in the same industry.
CAE's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 13.19%, CAE is in the better half of the industry, outperforming 78.08% of the companies in the same industry.
In the last couple of years the Operating Margin of CAE has declined.
CAE has a better Gross Margin (28.22%) than 64.38% of its industry peers.
CAE's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	13.19%
PM (TTM)	8.88%
GM	28.22%

OM growth 3Y4.74%

OM growth 5Y-1.9%

PM growth 3Y27%

PM growth 5Y0.03%

GM growth 3Y-0.86%

GM growth 5Y-1.58%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CAE is destroying value.
The number of shares outstanding for CAE has been increased compared to 1 year ago.
Compared to 5 years ago, CAE has more shares outstanding
CAE has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.34 indicates that CAE is not a great score, but indicates only limited risk for bankruptcy at the moment.
CAE has a worse Altman-Z score (2.34) than 71.23% of its industry peers.
CAE has a debt to FCF ratio of 7.20. This is a slightly negative value and a sign of low solvency as CAE would need 7.20 years to pay back of all of its debts.
CAE has a better Debt to FCF ratio (7.20) than 61.64% of its industry peers.
A Debt/Equity ratio of 0.61 indicates that CAE is somewhat dependend on debt financing.
The Debt to Equity ratio of CAE (0.61) is worse than 64.38% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.61
Debt/FCF	7.2
Altman-Z	2.34

ROIC/WACC0.66

WACC9.1%

2.3 Liquidity

CAE has a Current Ratio of 0.83. This is a bad value and indicates that CAE is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of CAE (0.83) is worse than 90.41% of its industry peers.
A Quick Ratio of 0.59 indicates that CAE may have some problems paying its short term obligations.
With a Quick ratio value of 0.59, CAE is not doing good in the industry: 87.67% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Current Ratio	0.83
Quick Ratio	0.59

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 13.21% over the past year.
Measured over the past years, CAE shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.17% on average per year.
Looking at the last year, CAE shows a quite strong growth in Revenue. The Revenue has grown by 9.12% in the last year.
CAE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.38% yearly.

EPS 1Y (TTM)13.21%

EPS 3Y12.94%

EPS 5Y-2.17%

EPS Q2Q%-4.17%

Revenue 1Y (TTM)9.12%

Revenue growth 3Y11.77%

Revenue growth 5Y5.38%

Sales Q2Q%8.8%

3.2 Future

Based on estimates for the next years, CAE will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.25% on average per year.
CAE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.95% yearly.

EPS Next Y1.92%

EPS Next 2Y11.93%

EPS Next 3Y14.29%

EPS Next 5Y15.25%

Revenue Next Year4.9%

Revenue Next 2Y5.14%

Revenue Next 3Y5.58%

Revenue Next 5Y5.95%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better 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 stable.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 38.14 indicates a quite expensive valuation of CAE.
Based on the Price/Earnings ratio, CAE is valued a bit cheaper than the industry average as 72.60% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.21. CAE is valued slightly more expensive when compared to this.
A Price/Forward Earnings ratio of 30.12 indicates a quite expensive valuation of CAE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CAE indicates a somewhat cheap valuation: CAE is cheaper than 76.71% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.98. CAE is around the same levels.

		Industry Rank	Sector Rank
PE	38.14
Fwd PE	30.12

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, CAE is valued cheaper than 87.67% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CAE is valued cheaper than 89.04% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	31.4
EV/EBITDA	16.51

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as CAE's earnings are expected to grow with 14.29% in the coming years.