Cargojet (CGJTF) AI Stock Analysis

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Positive Factors

Competitive Position

Cargojet is a well-managed company with a dominant market position and strong, durable competitive advantages in Canada's air cargo network.

Growth Opportunities

Enhanced growth outlook as the company pivots to fund growth CAPEX to capitalize on commercial opportunities in international freight markets.

Operational Strategy

Cargojet has historically had success maintaining a high level of fleet utilization by emphasizing ad-hoc markets when demand for its core services is soft.

Negative Factors

Cost Pressures

Cost inflationary pressures remain elevated, and there is anticipation that this pressure could further escalate when the company faces a renewal of its collective agreement with its pilots.

Demand Forecast

Analyst is lowering the forecast for Cargojet to reflect expectations for a more muted freight demand environment.

Operating Leverage

Operating leverage was limited due to new contract start-up costs and ongoing elevated inflationary pressures in the aviation industry.

Cargojet (CGJTF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.09B

Dividend Yield1.4%

Average Volume (3M)3.59K

Price to Earnings (P/E)12.5

Beta (1Y)1.21

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees1,935

SectorIndustrials

Sector Strength92

IndustryIntegrated Freight & Logistics

Share Statistics

EPS (TTM)1.17

Shares Outstanding15,518,921

10 Day Avg. Volume3,395

30 Day Avg. Volume3,592

Financial Highlights & Ratios

PEG Ratio0.64

Price to Book (P/B)1.69

Price to Sales (P/S)0.00

P/FCF Ratio-37.14

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$107.81

Price Target Upside53.90% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

Cargojet Business Overview & Revenue Model

Company DescriptionCargojet Inc. provides time sensitive overnight air cargo services in Canada. Its air cargo business activities include operation of domestic air cargo network services between fourteen cities in North America; and provision of dedicated aircraft to customers on an aircraft, crew, maintenance, and insurance (ACMI) basis operating between points in Canada, North and South America, and Europe. The company also operates scheduled international routes for various cargo customers between the United States and Bermuda; and between Canada, the United Kingdom, and Germany. In addition, it offers aircraft to customers on an adhoc charter basis operating between points in Canada, the United States, and other international destinations; and specialty charter services for livestock shipments, military equipment movements, emergency relief supplies, and virtually large shipments across North America, South America, the Caribbean, and Europe. Further, the company is involved in the flight planning and dispatch, crew planning and training, ground handling, and commercial airline cargo management businesses. As of December 31, 2021, it operated a fleet of 31 aircraft. The company was founded in 2005 and is headquartered in Mississauga, Canada.

How the Company Makes Money

Cargojet Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 26.88%|

Next Earnings Date:Aug 19, 2025

Earnings Call Sentiment Positive

Cargojet's Q1 2025 earnings call presented strong revenue growth and operational performance, particularly in the domestic and charter segments. Despite challenges in the ACMI segment and a decrease in operating cash flow, the company's strategic expansion and high on-time performance contribute to a positive outlook.

Q1-2025 Updates

Positive Updates

Record Q1 Revenue Growth

Cargojet reported an 8.1% increase in total revenue to $249.9 million for Q1 2025, marking a record for the first quarter in the company's history. This growth was driven by strong performance in the domestic and charter segments.

Significant EBITDA Growth

Adjusted EBITDA for Q1 2025 increased by 3.1% to $80.8 million, maintaining a margin of 32.3%.

Strong On-Time Performance

Cargojet achieved an on-time performance rate of 99.1% for Q1 2025, highlighting the company's operational efficiency and customer commitment.

Expansion of Fleet

Cargojet plans to add four 767-300 freighters and return one leased 767-200, resulting in a net addition of three aircraft to the fleet.

Growth in Domestic and Charter Business

Cargojet experienced a 16% growth in domestic revenue, attributed to rising e-commerce demand in Canada. The charter business also saw strong performance with a significant increase in ad hoc charter flights.

Negative Updates

Softness in ACMI Segment

The ACMI segment experienced a decline in revenue due to shorter routes and changes in demand, particularly affecting aircraft operated for DHL.

Decrease in Operating Cash Flow

Operating cash flow for Q1 2025 was $64.8 million, down from $80.3 million in the same period last year, primarily due to non-cash working capital movements.

Company Guidance

During the Cargojet conference call, significant guidance was provided, detailing the company's robust performance and strategic positioning. Cargojet reported that its Q1 2025 revenues more than doubled compared to Q1 2020, and adjusted EBITDA also mirrored this growth. The company achieved an 8.1% revenue increase in Q1 2025 to $249.9 million, marking a record first quarter. The Q1 adjusted EBITDA grew by 3.1% to $80.8 million, maintaining an expected margin of 32.3%. The company sustained a net debt-to-adjusted EBITDA leverage ratio of 2.5x as of March 31, 2025. Cargojet successfully navigated supply chain disruptions and capitalized on new e-commerce opportunities, evidenced by a 16% year-over-year increase in domestic revenue and a doubling of its charter business. The company plans to deploy three additional freighters later this year and continues to manage growth CapEx prudently. Furthermore, Cargojet's Q1 2025 on-time performance was an impressive 99.1%, highlighting its operational efficiency amidst evolving market conditions.

Cargojet Financial Statement Overview

Summary

Cargojet exhibits strong revenue growth and operational efficiency, with good profitability margins. However, the increasing leverage and negative free cash flow pose potential risks. The company should focus on managing debt levels and improving free cash flow to support long-term financial stability.

Income Statement

Positive

Cargojet has demonstrated a consistent increase in revenue over recent years, with a notable growth rate from 2023 to 2024 and into the TTM period. Gross Profit Margin and Net Profit Margin are solid, indicating profitability, although there was a decline in gross profit compared to 2022. EBIT and EBITDA margins are stable, reflecting strong operational efficiency. However, the net income has experienced some fluctuations, highlighting a potential area of risk.

Balance Sheet

Positive

The company's balance sheet shows a steady increase in stockholders' equity, contributing to a reasonable equity ratio. However, the Debt-to-Equity Ratio has increased, indicating rising leverage which could pose risks if not managed carefully. The Return on Equity is strong, suggesting effective use of equity to generate profits, but the increase in total debt is a concern that may affect future stability.

Cash Flow

Positive

Operating cash flow remains robust, but there is negative free cash flow in the TTM period due to high capital expenditures, limiting liquidity. The ratio of operating cash flow to net income is strong, suggesting that net income is well-supported by cash flow. The free cash flow to net income ratio indicates challenges in converting profits into free cash flow, which could impact financial flexibility moving forward.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.02B	1.00B	877.50M	979.90M	757.80M	668.50M
	Gross Profit
233.00M	225.80M	136.10M	247.50M	230.90M	250.50M
	EBIT
143.70M	135.20M	64.70M	170.50M	172.10M	156.90M
	EBITDA
349.90M	359.20M	329.50M	397.80M	348.10M	95.30M
	Net Income Common Stockholders
123.90M	108.40M	37.30M	190.60M	167.40M	-87.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.40M	1.50M	31.80M	6.10M	94.70M	3.70M
	Total Assets
1.99B	1.93B	2.04B	1.99B	1.49B	1.22B
	Total Debt
840.40M	755.10M	799.20M	707.00M	398.60M	572.80M
	Net Debt
833.00M	753.60M	767.40M	700.90M	303.90M	569.10M
	Total Liabilities
1.21B	1.19B	1.25B	1.15B	813.40M	1.05B
	Stockholders Equity
780.30M	737.70M	784.50M	831.50M	676.40M	175.20M
Cash Flow		Free Cash Flow
-35.90M	78.60M	-73.90M	-328.70M	-32.60M	146.00M
	Operating Cash Flow
313.10M	328.60M	192.80M	282.50M	245.00M	292.60M
	Investing Cash Flow
-341.80M	-142.70M	-127.50M	-615.10M	-280.40M	-127.70M
	Financing Cash Flow
16.20M	-216.20M	-39.60M	244.00M	126.40M	-162.80M

Cargojet Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CGJTF		$1.09B	12.51	15.65%	1.40%	―	―
Sector *	66 Neutral	$4.50B	12.28	5.32%	248.52%	4.13%	-12.36%
ACDVF		$4.77B	3.88	132.28%	―	―	―
MTL	79 Outperform	C$1.22B	11.35	10.81%	5.74%	3.28%	-14.21%
DXT	72 Outperform	C$556.11M	17.69	15.03%	3.92%	-10.24%	-23.79%
EIF	70 Outperform	C$2.92B	21.97	9.16%	4.64%	5.95%	-1.42%
ANDHF		$1.52B	30.76	15.10%	0.81%	―	―

* Industrials Sector Average

Performance Comparison

CGJTF

Cargojet

70.05

-13.31

-15.97%

ACDVF

Air Canada

13.54

0.74

5.78%

TSE:EIF

Exchange Income

56.84

13.60

31.45%

TSE:DXT

Dexterra Group

8.92

3.72

71.54%

TSE:MTL

Mullen Group

13.93

1.44

11.53%

ANDHF

Andlauer Healthcare Group

38.80

10.58

37.49%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.