AutoCanada (ACQ) AI Stock Analysis

• Market Cap: C$579.45M
• Dividend Yield: N/A
• Average Volume (3M): 41.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.93
• Revenue Growth: -26.93%
• EPS Growth: 84.17%
• Country: CA
• Employees: 2,550
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): -0.14
• Shares Outstanding: 23,150,232
• 10 Day Avg. Volume: 43,249
• 30 Day Avg. Volume: 41,142
• PEG Ratio: 0.02
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 0.07
• P/FCF Ratio: -163.96
• 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$33.00
• Price Target Upside: 54.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 40 Underperform
• Price Target: C$21.00 ▼(-1.96% Downside)

AutoCanada's overall stock score is primarily impacted by its weak financial performance, characterized by declining revenue, negative profitability, and high leverage. Technical analysis suggests a bearish trend with limited momentum, while valuation metrics highlight the company's unprofitability. Despite some positive developments in cost management and the Collision business, significant challenges remain.

Positive Factors

Cost Management

Effective cost management through headcount optimization and expense control enhances operational efficiency, supporting long-term profitability.

Collision Business Growth

Growth in the Collision business indicates strong demand and successful strategic initiatives, contributing positively to revenue diversification.

Debt Reduction Strategy

The strategy to sell U.S. dealerships and reduce debt aligns with financial stability goals, improving leverage ratios and financial health.

Negative Factors

Declining Revenue

A decline in revenue reflects challenges in vehicle sales and market demand, impacting overall financial performance and growth prospects.

High Leverage

Significant leverage limits financial flexibility and increases risk, potentially affecting the company's ability to invest in growth opportunities.

Negative Cash Flow

Negative cash flow growth indicates difficulties in converting earnings into cash, challenging the company's ability to fund operations and investments.

AutoCanada Business Overview & Revenue Model

Company Description

AutoCanada Inc. (ACQ) is one of Canada's largest multi-location automotive dealership groups, operating a diverse portfolio of dealerships across various provinces. The company specializes in the retailing of new and used vehicles, offering a wide range of automotive brands and models. Additionally, AutoCanada provides essential after-sales services, including vehicle maintenance, repairs, and financing solutions, ensuring a comprehensive automotive experience for its customers.

How the Company Makes Money

AutoCanada generates revenue primarily through the sale of new and used vehicles, which constitutes a significant portion of its earnings. The company also earns money through after-sales services, including parts, service, and repair operations, which provide recurring income streams. Another key revenue stream comes from financing and insurance products offered to customers, often in partnership with banks and financial institutions. These partnerships enable AutoCanada to facilitate vehicle financing and enhance customer satisfaction while also generating additional revenue. Furthermore, the company benefits from strategic acquisitions of dealerships, expanding its footprint and diversifying its income sources, contributing to its overall financial growth.

AutoCanada Financial Statement Overview

Summary

AutoCanada is facing challenges across its financial statements, with declining revenues, negative net profit margins, high leverage, and cash flow difficulties, indicating potential financial instability.

Income Statement

AutoCanada's revenue has been declining, with a negative growth rate of -5.08% in the TTM. The company is experiencing negative net profit margins, indicating losses, and a declining gross profit margin. However, the EBIT and EBITDA margins show some operational efficiency, though they are relatively low.

Balance Sheet

The company has a high debt-to-equity ratio of 4.18, indicating significant leverage, which poses a risk. The return on equity is negative, reflecting poor profitability. The equity ratio is low, suggesting a reliance on debt financing.

Cash Flow

Free cash flow has significantly declined, with a growth rate of -164.86% in the TTM. The operating cash flow to net income ratio is low, indicating challenges in converting income into cash. The negative free cash flow to net income ratio further highlights cash flow issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.48B	5.35B	6.44B	6.04B	4.65B	3.33B
Gross Profit	749.10M	882.28M	479.23M	1.04B	834.18M	547.33M
EBITDA	195.92M	164.34M	217.30M	235.04M	309.87M	79.31M
Net Income	-7.90M	-68.23M	50.49M	85.44M	164.21M	-6.62M
Balance Sheet
Total Assets	2.72B	3.01B	3.16B	2.86B	2.26B	1.90B
Cash, Cash Equivalents and Short-Term Investments	91.89M	67.34M	103.15M	108.30M	102.48M	107.70M
Total Debt	1.82B	2.01B	2.23B	2.03B	1.45B	1.35B
Total Liabilities	2.22B	2.51B	2.59B	2.37B	1.74B	1.54B
Stockholders Equity	484.25M	468.03M	534.85M	457.90M	493.41M	341.87M
Cash Flow
Free Cash Flow	-23.29M	-2.45M	40.02M	95.31M	78.37M	116.90M
Operating Cash Flow	-1.17M	31.63M	119.53M	147.97M	112.94M	137.87M
Investing Cash Flow	96.96M	67.86M	-125.43M	-228.02M	-215.37M	-35.12M
Financing Cash Flow	-86.08M	-93.92M	183.60M	83.21M	97.00M	-51.02M

AutoCanada Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 21.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Negative. The current price of 21.42 is above the 20-day moving average (MA) of 20.74, below the 50-day MA of 24.18, and below the 200-day MA of 23.55, indicating a neutral trend. The MACD of -0.67 indicates Negative momentum. The RSI at 44.36 is Neutral, neither overbought nor oversold. The STOCH value of 78.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ACQ.

AutoCanada Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MG	77 Outperform	$20.10B	14.01	8.31%	3.82%	0.66%	-0.61%
LNR	77 Outperform	$4.49B	21.39	4.01%	1.38%	-5.33%	-57.58%
XTC	71 Outperform	$245.31M	10.43	6.05%	6.12%	-3.53%	-17.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BYD	58 Neutral	$4.80B	432.97	1.90%	0.28%	4.24%	-60.60%
MRE	51 Neutral	$703.13M	―	-2.64%	1.89%	-7.25%	-143.07%
ACQ	40 Underperform	C$579.45M	-32.14	18.07%	―	-26.93%	84.17%

AutoCanada Corporate Events

AutoCanada Reports Third Quarter Results Amidst Ongoing Transformation

AutoCanada reported a decrease in revenue from continuing operations for the third quarter, with a decline of $211 million compared to the previous year. Despite the drop in top-line performance, the company achieved a significant increase in net income from total operations, rising to $16.8 million. The company’s transformation plan aims to improve operational efficiency and drive profitable growth, with a focus on expanding collision operations and enhancing dealership performance under the new ACX framework.

AutoCanada Appoints Sam Cochrane as Interim CEO Amid Leadership Transition

AutoCanada has appointed Sam Cochrane as Interim Chief Executive Officer following the transition of Paul Antony, who is stepping down as Executive Chair and Director to explore opportunities in automotive technology and data. This leadership change is part of a strategic move to strengthen the company’s growth trajectory, with Cochrane’s deep understanding of the business and Antony’s continued advisory role ensuring a smooth transition. The company is focused on finding a permanent CEO to continue building on the strong foundation established for long-term growth. Additionally, Chris Harris has been appointed as the new Chair of the Board, and Peter Hong will transition out of his role as Chief Strategy Officer & General Counsel later this year.

AutoCanada Expands Collision Network with Strategic Acquisition in Edmonton

AutoCanada Inc. has expanded its collision network by acquiring Doug’s Place Strathcona, a collision and refinish repair facility in Edmonton, Alberta. This acquisition enhances AutoCanada’s service capacity and strengthens its partnerships with leading OEMs and insurance companies, positioning the company to capture more repair volume and improve service availability in the region.