TRANSALTA CORP (TA.CA) Fundamental Analysis & Valuation

TSX:TA • CA89346D1078

Current stock price

18.76 CAD
+0.26 (+1.41%)
Last:

This TA.CA fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

5

1. TA.CA Profitability Analysis

1.1 Basic Checks

  • TA had positive earnings in the past year.
  • In the past year TA had a positive cash flow from operations.
  • In multiple years TA reported negative net income over the last 5 years.
  • Each year in the past 5 years TA had a positive operating cash flow.
TA.CA Yearly Net Income VS EBIT VS OCF VS FCFTA.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M -500M 1B

1.2 Ratios

  • TA's Return On Assets of -2.19% is in line compared to the rest of the industry. TA outperforms 56.25% of its industry peers.
  • With a Return On Equity value of -13.58%, TA perfoms like the industry average, outperforming 56.25% of the companies in the same industry.
  • The Return On Invested Capital of TA (1.39%) is comparable to the rest of the industry.
  • The Average Return On Invested Capital over the past 3 years for TA is above the industry average of 2.54%.
  • The 3 year average ROIC (6.58%) for TA is well above the current ROIC(1.39%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA -2.19%
ROE -13.58%
ROIC 1.39%
ROA(3y)2.37%
ROA(5y)0.18%
ROE(3y)12.82%
ROE(5y)0.48%
ROIC(3y)6.58%
ROIC(5y)5.82%
TA.CA Yearly ROA, ROE, ROICTA.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20 40

1.3 Margins

  • TA has a Operating Margin of 5.28%. This is comparable to the rest of the industry: TA outperforms 53.13% of its industry peers.
  • TA's Operating Margin has declined in the last couple of years.
  • TA has a better Gross Margin (83.91%) than 90.63% of its industry peers.
  • TA's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 5.28%
PM (TTM) N/A
GM 83.91%
OM growth 3Y-33.73%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.63%
GM growth 5Y0.65%
TA.CA Yearly Profit, Operating, Gross MarginsTA.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20 40 60 80

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3

2. TA.CA Health Analysis

2.1 Basic Checks

  • TA has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • The number of shares outstanding for TA has been reduced compared to 1 year ago.
  • Compared to 5 years ago, TA has more shares outstanding
  • TA has a worse debt/assets ratio than last year.
TA.CA Yearly Shares OutstandingTA.CA Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M
TA.CA Yearly Total Debt VS Total AssetsTA.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B 10B

2.2 Solvency

  • TA has an Altman-Z score of 0.28. This is a bad value and indicates that TA is not financially healthy and even has some risk of bankruptcy.
  • Looking at the Altman-Z score, with a value of 0.28, TA is in line with its industry, outperforming 50.00% of the companies in the same industry.
  • TA has a debt to FCF ratio of 11.31. This is a negative value and a sign of low solvency as TA would need 11.31 years to pay back of all of its debts.
  • TA has a better Debt to FCF ratio (11.31) than 84.38% of its industry peers.
  • A Debt/Equity ratio of 2.44 is on the high side and indicates that TA has dependencies on debt financing.
  • With a decent Debt to Equity ratio value of 2.44, TA is doing good in the industry, outperforming 62.50% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 2.44
Debt/FCF 11.31
Altman-Z 0.28
ROIC/WACC0.2
WACC6.8%
TA.CA Yearly LT Debt VS Equity VS FCFTA.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1B 2B 3B 4B

2.3 Liquidity

  • TA has a Current Ratio of 0.73. This is a bad value and indicates that TA is not financially healthy enough and could expect problems in meeting its short term obligations.
  • Looking at the Current ratio, with a value of 0.73, TA is in line with its industry, outperforming 56.25% of the companies in the same industry.
  • A Quick Ratio of 0.67 indicates that TA may have some problems paying its short term obligations.
  • TA has a Quick ratio (0.67) which is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 0.73
Quick Ratio 0.67
TA.CA Yearly Current Assets VS Current LiabilitesTA.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

3

3. TA.CA Growth Analysis

3.1 Past

  • The earnings per share for TA have decreased strongly by -64.29% in the last year.
  • Measured over the past years, TA shows a very strong growth in Earnings Per Share. The EPS has been growing by 171.44% on average per year.
  • The Revenue for TA has decreased by -15.47% in the past year. This is quite bad
  • Measured over the past years, TA shows a small growth in Revenue. The Revenue has been growing by 2.74% on average per year.
EPS 1Y (TTM)-64.29%
EPS 3Y171.44%
EPS 5YN/A
EPS Q2Q%72.73%
Revenue 1Y (TTM)-15.47%
Revenue growth 3Y-6.85%
Revenue growth 5Y2.74%
Sales Q2Q%-14.71%

3.2 Future

  • TA is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 62.38% yearly.
  • TA is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -3.09% yearly.
EPS Next Y-17.5%
EPS Next 2Y40.76%
EPS Next 3Y62.38%
EPS Next 5YN/A
Revenue Next Year-22.98%
Revenue Next 2Y-10.09%
Revenue Next 3Y-3.09%
Revenue Next 5YN/A

3.3 Evolution

  • Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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 decreasing.
TA.CA Yearly Revenue VS EstimatesTA.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1B 2B 3B
TA.CA Yearly EPS VS EstimatesTA.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0 1 -1 2

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4

4. TA.CA Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 93.80 indicates a quite expensive valuation of TA.
  • TA's Price/Earnings ratio is a bit cheaper when compared to the industry. TA is cheaper than 68.75% of the companies in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 26.21, TA is valued quite expensively.
  • TA is valuated quite expensively with a Price/Forward Earnings ratio of 113.69.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of TA is on the same level as its industry peers.
  • TA is valuated expensively when we compare the Price/Forward Earnings ratio to 23.13, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 93.8
Fwd PE 113.69
TA.CA Price Earnings VS Forward Price EarningsTA.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80 100

4.2 Price Multiples

  • TA's Enterprise Value to EBITDA is on the same level as the industry average.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of TA indicates a rather cheap valuation: TA is cheaper than 84.38% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 14.5
EV/EBITDA 13.29
TA.CA Per share dataTA.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6 8

4.3 Compensation for Growth

  • TA's earnings are expected to grow with 62.38% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y40.76%
EPS Next 3Y62.38%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

5

5. TA.CA Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 1.56%, TA has a reasonable but not impressive dividend return.
  • With a Dividend Yield of 1.56, TA pays less dividend than the industry average, which is at 3.39. 81.25% of the companies listed in the same industry pay a better dividend than TA!
  • TA's Dividend Yield is comparable with the S&P500 average which is at 1.89.
Industry RankSector Rank
Dividend Yield 1.56%

5.2 History

  • On average, the dividend of TA grows each year by 6.16%, which is quite nice.
  • TA has been paying a dividend for at least 10 years, so it has a reliable track record.
  • TA has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)6.16%
Div Incr Years6
Div Non Decr Years9
TA.CA Yearly Dividends per shareTA.CA Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.05 0.1 0.15 0.2 0.25

5.3 Sustainability

  • The earnings of TA are negative and hence is the payout ratio. TA will probably not be able to sustain this dividend level.
  • TA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-66.32%
EPS Next 2Y40.76%
EPS Next 3Y62.38%
TA.CA Yearly Income VS Free CF VS DividendTA.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200M -200M 400M -400M 600M

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TA.CA Fundamentals: All Metrics, Ratios and Statistics

TRANSALTA CORP

TSX:TA (4/2/2026, 7:00:00 PM)

18.76

+0.26 (+1.41%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)02-27
Earnings (Next)05-01
Inst Owners70.88%
Inst Owner ChangeN/A
Ins Owners0.22%
Ins Owner ChangeN/A
Market Cap5.57B
Revenue(TTM)2.40B
Net Income(TTM)-190.00M
Analysts80
Price Target23.97 (27.77%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.56%
Yearly Dividend0.42
Dividend Growth(5Y)6.16%
DP-66.32%
Div Incr Years6
Div Non Decr Years9
Ex-Date06-01
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-144.04%
Min EPS beat(2)-171.69%
Max EPS beat(2)-116.39%
EPS beat(4)1
Avg EPS beat(4)-63.39%
Min EPS beat(4)-171.69%
Max EPS beat(4)55.69%
EPS beat(8)3
Avg EPS beat(8)-52.36%
EPS beat(12)6
Avg EPS beat(12)6.8%
EPS beat(16)7
Avg EPS beat(16)1.32%
Revenue beat(2)2
Avg Revenue beat(2)6.32%
Min Revenue beat(2)1.71%
Max Revenue beat(2)10.93%
Revenue beat(4)3
Avg Revenue beat(4)4.83%
Min Revenue beat(4)-14.2%
Max Revenue beat(4)20.88%
Revenue beat(8)6
Avg Revenue beat(8)11.02%
Revenue beat(12)10
Avg Revenue beat(12)25.98%
Revenue beat(16)14
Avg Revenue beat(16)29.09%
PT rev (1m)3.82%
PT rev (3m)0.98%
EPS NQ rev (1m)-27.68%
EPS NQ rev (3m)-14.01%
EPS NY rev (1m)0%
EPS NY rev (3m)-59.92%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-4.55%
Valuation
Industry RankSector Rank
PE 93.8
Fwd PE 113.69
P/S 2.32
P/FCF 14.5
P/OCF 8.62
P/B 3.98
P/tB 8.7
EV/EBITDA 13.29
EPS(TTM)0.2
EY1.07%
EPS(NY)0.17
Fwd EY0.88%
FCF(TTM)1.29
FCFY6.9%
OCF(TTM)2.18
OCFY11.6%
SpS8.1
BVpS4.71
TBVpS2.16
PEG (NY)N/A
PEG (5Y)N/A
Graham Number4.61
Profitability
Industry RankSector Rank
ROA -2.19%
ROE -13.58%
ROCE 1.86%
ROIC 1.39%
ROICexc 1.47%
ROICexgc 1.67%
OM 5.28%
PM (TTM) N/A
GM 83.91%
FCFM 15.97%
ROA(3y)2.37%
ROA(5y)0.18%
ROE(3y)12.82%
ROE(5y)0.48%
ROIC(3y)6.58%
ROIC(5y)5.82%
ROICexc(3y)7.13%
ROICexc(5y)6.63%
ROICexgc(3y)8.05%
ROICexgc(5y)7.5%
ROCE(3y)8.79%
ROCE(5y)7.77%
ROICexgc growth 3Y-39.73%
ROICexgc growth 5YN/A
ROICexc growth 3Y-39.7%
ROICexc growth 5YN/A
OM growth 3Y-33.73%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.63%
GM growth 5Y0.65%
F-Score5
Asset Turnover0.28
Health
Industry RankSector Rank
Debt/Equity 2.44
Debt/FCF 11.31
Debt/EBITDA 4.84
Cap/Depr 45.25%
Cap/Sales 10.89%
Interest Coverage 0.45
Cash Conversion 91.5%
Profit Quality N/A
Current Ratio 0.73
Quick Ratio 0.67
Altman-Z 0.28
F-Score5
WACC6.8%
ROIC/WACC0.2
Cap/Depr(3y)82.9%
Cap/Depr(5y)95.03%
Cap/Sales(3y)16.22%
Cap/Sales(5y)19.7%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-64.29%
EPS 3Y171.44%
EPS 5YN/A
EPS Q2Q%72.73%
EPS Next Y-17.5%
EPS Next 2Y40.76%
EPS Next 3Y62.38%
EPS Next 5YN/A
Revenue 1Y (TTM)-15.47%
Revenue growth 3Y-6.85%
Revenue growth 5Y2.74%
Sales Q2Q%-14.71%
Revenue Next Year-22.98%
Revenue Next 2Y-10.09%
Revenue Next 3Y-3.09%
Revenue Next 5YN/A
EBIT growth 1Y-80.61%
EBIT growth 3Y-38.27%
EBIT growth 5YN/A
EBIT Next Year76.05%
EBIT Next 3Y29.89%
EBIT Next 5Y25.56%
FCF growth 1Y-19.16%
FCF growth 3YN/A
FCF growth 5Y13.71%
OCF growth 1Y-18.84%
OCF growth 3Y-9.69%
OCF growth 5Y-1.65%

TRANSALTA CORP / TA.CA Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for TRANSALTA CORP?

ChartMill assigns a fundamental rating of 4 / 10 to TA.CA.


What is the valuation status of TRANSALTA CORP (TA.CA) stock?

ChartMill assigns a valuation rating of 4 / 10 to TRANSALTA CORP (TA.CA). This can be considered as Fairly Valued.


What is the profitability of TA stock?

TRANSALTA CORP (TA.CA) has a profitability rating of 5 / 10.


What are the PE and PB ratios of TRANSALTA CORP (TA.CA) stock?

The Price/Earnings (PE) ratio for TRANSALTA CORP (TA.CA) is 93.8 and the Price/Book (PB) ratio is 3.98.


What is the expected EPS growth for TRANSALTA CORP (TA.CA) stock?

The Earnings per Share (EPS) of TRANSALTA CORP (TA.CA) is expected to decline by -17.5% in the next year.