AutoCanada (ACQ) AI Stock Analysis

• Market Cap: C$597.51M
• Dividend Yield: N/A
• Average Volume (3M): 23.88K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.62
• Revenue Growth: -18.16%
• EPS Growth: -275.09%
• Country: CA
• Employees: 2,550
• Sector: Consumer Cyclical
• Sector Strength: 65
• Industry: Auto - Dealerships
• EPS (TTM): 0.37
• Shares Outstanding: 23,150,232
• 10 Day Avg. Volume: 29,922
• 30 Day Avg. Volume: 23,879
• PEG Ratio: 3.54
• Price to Book (P/B): 1.26
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -141.57
• 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$24.00
• Price Target Upside: -5.03% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 63 Neutral
• Price Target: C$26.00 ▲(2.89%Upside)

AutoCanada's stock score is primarily influenced by strong technical indicators, suggesting current market optimism. However, the company's financial performance and valuation present significant risks. Strategic initiatives and leadership changes provide some positive outlook, but the financial and valuation challenges need to be addressed for long-term stability.

Positive Factors

Cost Savings

AutoCanada is driving onwards with cost-cutting efforts and expects $100 million of annualized cost savings by year-end.

Earnings Performance

AutoCanada reported better-than-expected earnings results, with adjusted EBITDA from continuing operations of $43 million.

Inventory Management

AutoCanada finished the quarter with a better supply of new and used vehicles, reducing inventory days significantly year-over-year.

Negative Factors

Demand Slowdown

There is some slowdown in demand for ACQ, 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., through its subsidiaries, operates franchised automobile dealerships. The company offers a range of automotive products and services, including new and used vehicles, vehicle leasing, vehicle parts, vehicle maintenance and collision repair services, extended service contracts, and vehicle protection and other after-market products. It also arranges financing and insurance for vehicle purchases by its customers through third-party finance and insurance sources. The company sells its vehicles under the Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC, Buick, Cadillac, Ford, Infiniti, Nissan, Hyundai, Subaru, Audi, Volkswagen, Kia, Mazda, Mercedes-Benz, BMW, MINI, Volvo, Toyota, Lincoln, Porsche, and Honda brands. As of March 2, 2022, it operated 78 franchised dealerships in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, and New Brunswick in Canada, as well as in Illinois, the United States. The company also offers used vehicles online. AutoCanada Inc. was incorporated in 2009 and is headquartered in Edmonton, Canada.

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 is facing challenges with declining revenue and profitability. The company shows high leverage with significant debt, and there are liquidity concerns due to negative free cash flow. However, the balance sheet offers some asset backing, providing limited stability.

Income Statement

The company shows declining revenue and profitability, with TTM revenue decreasing significantly from previous years. The net income has turned negative in the latest TTM period, indicating a significant profitability issue. Gross profit margin has decreased, suggesting cost pressures or pricing challenges. These trends point to potential difficulties in sustaining revenue growth and profitability in a competitive auto dealership market.

Balance Sheet

The balance sheet indicates high leverage, with significant debt levels compared to equity, but the equity has remained relatively stable. The debt-to-equity ratio is high, reflecting potential financial risk if revenue declines further. However, the equity ratio suggests a reasonable level of asset backing, providing some stability against liabilities.

Cash Flow

Cash flow from operations has decreased, and free cash flow is negative in the TTM, highlighting liquidity challenges. The operating cash flow to net income ratio indicates that cash generation is weak relative to accounting earnings. There is a need for improved cash management to enhance liquidity and support ongoing 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
EBITDA	164.34M	217.30M	273.15M	326.40M	100.74M
Net Income	-68.23M	50.49M	85.44M	164.21M	-6.62M
Balance Sheet
Total Assets	3.01B	3.16B	2.86B	2.26B	1.90B
Cash, Cash Equivalents and Short-Term Investments	67.34M	103.15M	108.30M	102.48M	107.70M
Total Debt	2.01B	2.23B	2.03B	1.45B	1.35B
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: Positive
• Last Price: 25.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACQ, the sentiment is Positive. The current price of 25.27 is above the 20-day moving average (MA) of 22.73, above the 50-day MA of 21.51, and above the 200-day MA of 18.17, indicating a bullish trend. The MACD of 1.00 indicates Negative momentum. The RSI at 72.21 is Negative, neither overbought nor oversold. The STOCH value of 86.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ACQ.

AutoCanada Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACQ	63 Neutral	C$597.51M	―	9.31%	―	-18.16%	-275.09%
Sector *	56 Neutral	HK$25.30B	3.94	-2.03%	6.16%	-0.31%	-67.70%
MGA	―	$11.85B	10.49	9.85%	4.62%	―	―
EXCOF	―	$187.30M	9.79	6.86%	6.36%	―	―
LIMAF	―	$2.92B	16.04	4.66%	1.72%	―	―
MRETF	―	$453.57M	5.32	-3.98%	2.36%	―	―
DOOO	―	$3.58B	18.62	26.57%	1.28%	―	―

AutoCanada Corporate Events

AutoCanada to Divest 13 U.S. Dealerships in Strategic Shift

AutoCanada Inc. has announced definitive agreements to divest 13 of its U.S. dealerships for approximately $82.7 million, as part of its strategy to discontinue its U.S. Operations segment. The divestiture, expected to close in the second half of 2025, marks a significant shift in AutoCanada’s operational focus, potentially impacting its market positioning by concentrating efforts on its Canadian operations. The company remains engaged in selling its remaining four U.S. dealerships, signaling a complete exit from the U.S. market.

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 Q2 2025 Financial Results

AutoCanada Inc. announced it will release its Q2 2025 financial results on August 13, 2025, followed by a conference call and webcast for analysts and the public. This announcement allows stakeholders to gain insights into the company’s performance and strategic direction, potentially impacting its market position and investor relations.

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 Announces Leadership Transition Amidst Strategic Growth

AutoCanada Inc. announced the transition of Paul Antony from Executive Chair to non-executive Chair of the Board, following the appointment of a new CEO. Under Antony’s leadership since 2018, the company has stabilized its operations, reduced debt, and integrated advanced data analytics, positioning itself as a credible consolidator in the Canadian auto retail market. The transition marks a strategic move as the company is now poised for scalable growth, with a strong foundation and operational overhaul in place.

The most recent analyst rating on (TSE:ACQ) stock is a Hold with a C$19.50 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

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.