AutoCanada (ACQ) AI Stock Analysis

• Market Cap: C$640.10M
• Dividend Yield: N/A
• Average Volume (3M): 41.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.88
• Revenue Growth: -20.36%
• EPS Growth: 50.19%
• Country: CA
• Employees: 2,550
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 0.72
• Shares Outstanding: 23,150,232
• 10 Day Avg. Volume: 43,249
• 30 Day Avg. Volume: 41,142
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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$36.33
• Price Target Upside: 33.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 45 Neutral
• Price Target: C$27.00 ▼(-0.48% Downside)

AutoCanada's overall stock score is primarily impacted by its financial challenges, including declining revenues and high leverage. Technical analysis and valuation metrics also reflect a negative outlook. However, the recent earnings call provided some positive insights into cost savings and improved profitability, slightly offsetting the negative factors.

Positive Factors

Cost Savings

Significant cost savings enhance operational efficiency and profitability, providing a stronger financial foundation for future growth.

Improved Earnings and Margins

Higher EBITDA and improved margins indicate enhanced operational efficiency, contributing to better profitability and financial health.

Successful U.S. Divestiture

Proceeds from divestitures will reduce leverage, improving balance sheet strength and providing more financial flexibility.

Negative Factors

Declining Revenue

A decline in revenue indicates challenges in maintaining sales volume, which could impact long-term growth and market position.

High Leverage

High leverage can strain financial resources and limit the company's ability to invest in growth opportunities, affecting long-term stability.

Cash Flow Challenges

Declining free cash flow indicates difficulties in generating cash from operations, which may hinder the company's ability to fund future growth.

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 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 faces declining revenue and profitability, with negative net income and high leverage. However, the balance sheet provides some asset backing, offering stability against liabilities.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.91B	5.35B	6.44B	6.04B	4.65B	3.33B
Gross Profit	826.68M	882.28M	479.23M	1.04B	834.18M	547.33M
EBITDA	216.49M	164.34M	217.30M	273.15M	326.40M	100.74M
Net Income	-18.01M	-68.23M	50.49M	85.44M	164.21M	-6.62M
Balance Sheet
Total Assets	2.76B	3.01B	3.16B	2.86B	2.26B	1.90B
Cash, Cash Equivalents and Short-Term Investments	62.41M	67.34M	103.15M	108.30M	102.48M	107.70M
Total Debt	1.80B	2.01B	2.23B	2.03B	1.45B	1.35B
Total Liabilities	2.26B	2.51B	2.59B	2.37B	1.74B	1.54B
Stockholders Equity	476.45M	468.03M	534.85M	457.90M	493.41M	341.87M
Cash Flow
Free Cash Flow	2.70M	-2.45M	40.02M	95.31M	78.37M	116.90M
Operating Cash Flow	26.35M	31.63M	119.53M	147.97M	112.94M	137.87M
Investing Cash Flow	82.71M	67.86M	-125.43M	-228.02M	-215.37M	-35.12M
Financing Cash Flow	-220.17M	-93.92M	183.60M	83.21M	97.00M	-51.02M

AutoCanada Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.13
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 27.13 is below the 20-day moving average (MA) of 29.22, below the 50-day MA of 31.71, and above the 200-day MA of 22.96, indicating a neutral trend. The MACD of -1.39 indicates Positive momentum. The RSI at 30.75 is Neutral, neither overbought nor oversold. The STOCH value of 46.46 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	―	$18.23B	10.97	10.06%	4.27%	-0.54%	26.31%
LNR	―	$4.29B	20.45	3.61%	1.42%	-2.60%	-64.22%
XTC	―	$258.68M	10.96	6.01%	6.27%	-3.50%	-22.76%
MRE	―	$745.35M	―	-4.10%	1.93%	-8.84%	-148.15%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DOO	―	$6.88B	―	38.70%	0.91%	-13.78%	-115.58%
ACQ	―	C$640.10M	-35.51	20.23%	―	-20.36%	50.19%

AutoCanada Corporate Events

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.

The most recent analyst rating on (TSE:ACQ) stock is a Buy with a C$38.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

AutoCanada’s Earnings Call Highlights Cost Savings and Growth

The recent earnings call for AutoCanada Inc. painted a generally positive picture, with significant achievements in cost savings and profitability. Despite facing challenges such as a decline in revenue and volume softness due to transitional activities, the company’s strategic efforts in cost management and earnings growth were highlighted as outweighing these negative aspects.

AutoCanada Sells North City Honda to Streamline Operations

AutoCanada Inc. has completed the sale of North City Honda in Chicago, Illinois, a move that aligns with the reclassification of some U.S. dealerships as discontinued operations. The sale, which generated $18.2 million in cash, will help reduce the company’s revolving credit facility. This strategic decision is expected to streamline AutoCanada’s operations and potentially improve its financial stability by focusing on more profitable segments.

The most recent analyst rating on (TSE:ACQ) stock is a Buy with a C$38.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

AutoCanada Sells Illinois Dealerships to Streamline Operations

AutoCanada has completed the sale of its Chevrolet and Hyundai dealerships in Palatine, Illinois, which were classified as discontinued operations at the end of 2024. The sale generated $9.3 million in cash, which will be used to reduce the company’s revolving credit facility. This move is part of AutoCanada’s strategy to streamline its operations and focus on its core Canadian market, potentially improving financial stability and operational efficiency.

The most recent analyst rating on (TSE:ACQ) stock is a Hold with a C$34.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

AutoCanada Sells Loss-Making U.S. Dealership to Reduce Debt

AutoCanada Inc. has completed the sale of its Crystal Lake Chrysler Dodge Jeep Ram dealership in Illinois, which had been generating a loss. The sale, part of a previously announced agreement, brought in approximately $9.9 million, which will be used to reduce the company’s revolving credit facility. This move is likely to improve AutoCanada’s financial position by offloading a loss-making asset and reducing debt.

The most recent analyst rating on (TSE:ACQ) stock is a Hold with a C$17.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.