AutoCanada (ACQ) AI Stock Analysis

• Market Cap: C$497.73M
• Dividend Yield: N/A
• Average Volume (3M): 40.41K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.58
• Revenue Growth: -18.16%
• EPS Growth: -275.09%
• Country: CA
• Employees: 2,550
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Auto - Dealerships
• EPS (TTM): 0.37
• Shares Outstanding: 23,150,232
• 10 Day Avg. Volume: 20,864
• 30 Day Avg. Volume: 40,408
• PEG Ratio: 0.13
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -5.32
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$21.25
• Price Target Upside: -1.25% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 63 Neutral
• Price Target: C$24.50 ▲(13.85%Upside)

The overall stock score is influenced significantly by financial challenges, including high leverage and declining profits. Positive technical momentum and corporate events offer some offsetting strengths, while valuation remains a concern due to recent losses.

Positive Factors

Cost Savings

AutoCanada achieved faster-than-anticipated progress on cost-saving initiatives, contributing to a significant earnings beat.

Earnings

AutoCanada reported better-than-expected earnings results, with adjusted EBITDA from continuing operations significantly surpassing forecasts.

Revenue Growth

Revenue from continuing operations for the quarter reflects growth and exceeded both the company's and consensus forecasts.

Negative Factors

Consumer Sentiment

AutoCanada remains cautious on the outlook for the year, expecting consumer sentiment to weaken due to tariffs.

Demand Slowdown

There is some slowdown in demand for AutoCanada, as indicated by a softening in vehicle volumes.

Leverage Concerns

Leverage is expected to remain elevated until the company sells its US business, which is a factor of concern.

AutoCanada Business Overview & Revenue Model

Company Description

AutoCanada Inc. (ACQ) is a leading multi-location automobile dealership group in Canada, specializing in the sale of new and used vehicles. The company operates a network of franchised automobile dealerships, offering a diverse range of automotive brands across several provinces. In addition to vehicle sales, AutoCanada provides associated services such as automotive repair, maintenance, and the sale of parts and accessories.

How the Company Makes Money

AutoCanada generates revenue through multiple streams, primarily from the sale of new and used vehicles, which constitutes the largest portion of its income. The company also earns significant revenue from its after-sales services, including automotive repair and maintenance, as well as the sale of parts and accessories. Additionally, AutoCanada benefits from finance and insurance products offered to its customers, which include extended warranties, insurance contracts, and vehicle leasing and financing options. The company's partnerships with major automotive manufacturers for dealership rights and access to a wide range of vehicle inventory are crucial to its operations and revenue generation.

AutoCanada Financial Statement Overview

Summary

AutoCanada shows strengths in gross margin management and a slightly improved equity ratio. However, significant revenue and net income declines in 2024, coupled with high leverage, pose risks. Cash flow has weakened but operational cash still supports the company. Overall, financial health is challenged by profitability and leverage concerns.

Income Statement

The company experienced a significant decline in revenue from 2023 to 2024, alongside a negative net income for 2024. Despite this, gross profit margin improved over the years, indicating better cost management. The EBIT and EBITDA margins have shown volatility, reflecting the challenges in maintaining consistent profitability.

Balance Sheet

The debt-to-equity ratio is high, indicating significant leverage, which could be risky during downturns. However, the equity ratio shows a slight improvement, suggesting a gradual increase in equity base relative to assets. Return on equity is negative for 2024, driven by the net loss.

Cash Flow

Free cash flow has decreased significantly, largely due to the decrease in operating cash flow and higher capital expenditures. The operating cash flow to net income ratio indicates that cash generation relative to net income has weakened, but the company maintains a level of operational cash flow that supports its operations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.35B	6.44B	6.04B	4.65B	3.33B
	Gross Profit
882.28M	479.23M	1.04B	834.18M	547.33M
	EBIT
171.32M	206.52M	254.55M	270.07M	70.21M
	EBITDA
164.34M	217.30M	273.15M	326.40M	100.74M
	Net Income Common Stockholders
-68.23M	50.49M	85.44M	164.21M	-6.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
67.34M	103.15M	108.30M	102.48M	107.70M
	Total Assets
3.01B	3.16B	2.86B	2.26B	1.90B
	Total Debt
2.01B	2.23B	2.03B	1.45B	1.35B
	Net Debt
1.94B	2.13B	1.92B	1.34B	1.24B
	Total Liabilities
2.51B	2.59B	2.37B	1.74B	1.54B
	Stockholders Equity
468.03M	534.85M	457.90M	493.41M	341.87M
Cash Flow		Free Cash Flow
-2.45M	40.02M	95.31M	78.37M	116.90M
	Operating Cash Flow
31.63M	119.53M	147.97M	112.94M	137.87M
	Investing Cash Flow
67.86M	-125.43M	-228.02M	-215.37M	-35.12M
	Financing Cash Flow
-93.92M	183.60M	83.21M	97.00M	-51.02M

AutoCanada Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 21.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACQ, the sentiment is Neutral. The current price of 21.52 is below the 20-day moving average (MA) of 21.99, above the 50-day MA of 18.97, and above the 200-day MA of 17.47, indicating a neutral trend. The MACD of 0.70 indicates Positive momentum. The RSI at 56.92 is Neutral, neither overbought nor oversold. The STOCH value of 24.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ACQ.

AutoCanada Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
XTC	79 Outperform	$264.36M	10.01	6.86%	6.09%	-2.84%	-8.22%
MG	73 Outperform	$14.53B	9.33	9.85%	7.18%	0.36%	15.87%
LNR	71 Outperform	$3.80B	15.06	4.66%	2.50%	2.26%	-54.00%
ACQ	63 Neutral	C$497.73M	―	9.31%	―	-18.16%	-275.09%
MRE	63 Neutral	$612.15M	5.65	-3.98%	2.40%	-9.36%	-145.18%
Sector *	62 Neutral	$6.76B	11.07	2.80%	6.34%	2.68%	-24.87%
DOO	58 Neutral	$4.77B	19.66	26.57%	1.32%	-22.34%	-110.04%

AutoCanada Corporate Events

AutoCanada Announces Successful Election of Directors

AutoCanada Inc. announced the successful election of its board of directors at the Annual and Special Meeting of Shareholders, with all resolutions passed. The meeting saw participation from shareholders representing 57.12% of the company’s issued and outstanding common shares. This election solidifies the company’s governance structure, potentially impacting its strategic direction and stakeholder confidence positively.

The most recent analyst rating on (TSE:ACQ) stock is a Buy with a C$21.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

AutoCanada Sees Revenue Growth Amid Cost Transformation Efforts

AutoCanada reported a revenue increase of 2.3% to $1,240.1 million in the first quarter of 2025 compared to the previous year, driven by strong new vehicle sales and collision repair, despite declines in used vehicle sales and parts and service. The company is actively working on cost transformation efforts to mitigate economic uncertainties, achieving significant savings and aiming for $100 million in annual run rate cost savings by the end of 2025.

The most recent analyst rating on (TSE:ACQ) stock is a Buy with a C$21.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

AutoCanada to Announce Q1 2025 Financial Results and Host Virtual Shareholders Meeting

AutoCanada Inc. announced the release of its Q1 2025 financial results on May 14, 2025, followed by a conference call and webcast for analysts and the public. The company also detailed its virtual Annual and Special Shareholders Meeting scheduled for May 15, 2025. These announcements highlight AutoCanada’s commitment to transparency and engagement with stakeholders, potentially impacting its market positioning and investor relations.

AutoCanada Adjusts Credit Facility Amid Tariff Concerns

AutoCanada has announced a temporary adjustment to its credit facility, increasing its maximum permitted Total Net Funded Debt to EBITDA ratio from 5.50:1.00 to 6.00:1.00 for the second quarter of 2025, before reducing it to 4.50:1.00 in July. This measure is a precautionary response to the uncertain impact of the current tariff environment on the company’s financial performance, indicating a strategic approach to maintaining financial flexibility amidst potential market challenges.