AutoCanada (ACQ) AI Stock Analysis

• Market Cap: C$521.81M
• Dividend Yield: N/A
• Average Volume (3M): 41.14K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 1.27
• 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$32.75
• Price Target Upside: 45.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 3.31
• Revenue Forecast (FY): C$5.01B

• Rating: 45 Neutral
• Price Target: C$28.00 ▲(24.22% Upside)
• Action: Upgraded Date: 02/03/26
• Date: Action: Upgraded 02/03/26

The score is held down primarily by weak financial performance (loss-making results, high leverage, and deteriorating/free cash flow). Technicals are constructive but overbought, providing only partial support. Valuation is unfavorable due to negative earnings, while the earnings call was mixed with cost-savings and Collision growth offset by declining revenue/EBITDA and delayed asset-sale closures.

Positive Factors

Collision Business Growth

Sustained 19% YoY growth in Collision indicates durable aftermarket demand and successful OEM certification expansion. Collision services are recurring, higher-margin, and less cyclical than new-vehicle sales, providing a structural revenue and margin diversification tailwind over the next several quarters.

Cost Transformation Progress

Capturing $100M of targeted run-rate savings demonstrates material structural cost base reduction via headcount optimization and process improvements. These permanent savings support margin sustainability, improve cash flow conversion potential, and enhance resilience to volume downturns over the medium term.

Deleveraging via U.S. Dispositions

Planned $130M of disposal proceeds provides a clear path to reduce leverage. Applying proceeds to debt completionally shifts balance-sheet risk, helps move net funded debt/EBITDA from ~3.4x toward the 2–3x target, and improves financial flexibility for capex and working-capital needs over coming quarters.

Negative Factors

Declining Revenue Trend

Persistent top-line contraction reduces scale economics across new, used and after-sales channels. Lower volumes pressure fixed-cost absorption and F&I and parts revenue, making margin recovery harder and extending the time needed to rebuild earnings power absent sustained volume or mix improvements.

Weak Profitability Margins

Near-zero to negative net margins and low operating margins limit retained earnings and reinvestment capacity. Low profitability reduces buffer against cyclical declines, slows deleveraging, and constrains the company's ability to invest in franchise growth or technology, pressuring long-term competitiveness.

Cash Flow Stress and High Leverage

Severely negative FCF growth and minimal cash conversion, combined with a high debt-to-equity ratio, create structural liquidity and solvency risks. Persistent weak cash generation limits ability to service debt, fund capex, or absorb shocks without further asset sales or equity issuance, hindering strategic options.

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

Weak fundamentals: declining revenue (-8.69% TTM), negative net margin (-0.37%), high leverage (debt-to-equity 3.79) with negative ROE (-3.78%), and very poor free cash flow trend (FCF growth -963.34%) with low cash conversion (operating cash flow to net income 0.02).

Income Statement

AutoCanada's income statement shows declining revenue with a negative growth rate of -8.69% in the TTM period. The gross profit margin is stable at 16.84%, but the net profit margin is negative at -0.37%, indicating a loss. The EBIT and EBITDA margins are low at 3.20% and 4.41%, respectively, reflecting challenges in operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.79, indicating significant leverage. Return on equity is negative at -3.78%, suggesting the company is not generating sufficient returns on shareholder investments. The equity ratio is relatively low, highlighting potential financial instability.

Cash Flow

Cash flow analysis shows negative free cash flow growth of -963.34% in the TTM period, with a low operating cash flow to net income ratio of 0.02. The free cash flow to net income ratio is 0.10, indicating challenges in converting earnings into cash flow.

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: 22.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 22.54 is below the 20-day moving average (MA) of 27.53, below the 50-day MA of 26.32, and below the 200-day MA of 26.17, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 32.59 is Neutral, neither overbought nor oversold. The STOCH value of 4.05 is Positive, 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
LNR	73 Outperform	C$5.66B	6.59	4.01%	1.32%	-5.33%	-57.58%
XTC	71 Outperform	C$293.66M	13.48	6.05%	6.21%	-3.53%	-17.19%
MG	66 Neutral	$23.46B	17.79	6.90%	3.69%	0.66%	-0.61%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BYD	58 Neutral	C$6.39B	116.16	1.90%	0.28%	4.24%	-60.60%
MRE	51 Neutral	C$759.70M	5.39	-2.64%	1.93%	-7.25%	-143.07%
ACQ	45 Neutral	C$521.81M	11.20	18.07%	―	-26.93%	84.17%

AutoCanada Corporate Events

AutoCanada Sells Chicago Toyota Dealership as Part of U.S. Exit Strategy

AutoCanada has completed the sale of Toyota of Lincoln Park in Chicago, one of the U.S. dealerships it has designated as discontinued operations, as part of its strategic exit from its U.S. Operations segment. The store generated approximately $64.7 million in sales and $1.0 million in net income in the 12 months ended September 30, 2025, and the company received about $11.2 million in cash for goodwill and fixed assets, excluding inventory and working capital, with the proceeds used to pay down its revolving credit facility, advancing its plan to deleverage and strengthen its balance sheet.

The most recent analyst rating on (TSE:ACQ) stock is a Hold with a C$26.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

AutoCanada Expands Edmonton Collision Network with Acquisition of Modern Autobody

AutoCanada has acquired Modern Autobody, a long-established Edmonton collision and refinish repair facility, in a move that expands its collision repair footprint and strengthens its luxury and electric vehicle certification coverage in the region. The strategically located shop, which holds an extensive suite of OEM certifications from brands such as Mercedes-Benz, BMW, Tesla, Porsche and Rivian, is expected to generate operational synergies with nearby AutoCanada collision centres and dealerships, while the absence of existing direct repair programs offers an immediate opportunity to build insurer partnerships, increase repair volumes and capture additional revenue through the company’s existing insurance relationships.

The most recent analyst rating on (TSE:ACQ) stock is a Hold with a C$24.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

AutoCanada Strengthens Leadership with Key Appointments

AutoCanada has appointed Fade Bouras as Chief Operating Officer and John North to its Board of Directors, marking significant leadership changes aimed at enhancing operational performance and strategic growth. Bouras, with over 22 years of experience in automotive retail, will focus on improving dealership operations and implementing a robust used vehicle strategy, while North brings extensive expertise in automotive retail and public company governance, expected to contribute to AutoCanada’s long-term value creation.

The most recent analyst rating on (TSE:ACQ) stock is a Sell 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 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.

The most recent analyst rating on (TSE:ACQ) stock is a Hold with a C$24.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.