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: 67.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 38 Underperform
• Price Target: C$20.50 ▲(4.06% Upside)

AutoCanada's overall stock score is heavily impacted by poor financial performance and bearish technical indicators. The company's high leverage, declining revenues, and negative profit margins pose significant risks. Additionally, the stock's valuation metrics are unattractive, with a negative P/E ratio and no dividend yield. Despite some positive aspects from the earnings call, such as cost savings and growth in the Collision business, the overall outlook remains challenging.

Positive Factors

Cost Transformation Achievements

The significant cost savings through headcount optimization and expense management enhance operational efficiency, supporting long-term profitability.

Collision Business Growth

The growth in the Collision business indicates a strong demand and potential for sustained revenue increase, contributing positively to the company's diversification strategy.

Debt Reduction Strategy

Proceeds from U.S. dealership sales aimed at debt reduction will improve financial stability and lower leverage, enhancing long-term financial health.

Negative Factors

Revenue Decline

The decline in revenue across key segments reflects challenges in market demand and operational execution, impacting long-term growth prospects.

High Leverage

High leverage poses financial risks, limiting flexibility and increasing vulnerability to economic downturns, affecting long-term sustainability.

Cash Flow Challenges

Declining free cash flow indicates difficulties in generating cash, which can hinder reinvestment and debt servicing, affecting 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 is facing challenges across its financial statements, including declining revenues and profitability, high leverage, and cash flow difficulties. These factors indicate potential financial instability and risks that need to be addressed for future growth.

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	4.91B	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	235.04M	309.87M	79.31M
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: 19.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 19.7 is below the 20-day moving average (MA) of 24.27, below the 50-day MA of 28.74, and below the 200-day MA of 23.34, indicating a bearish trend. The MACD of -2.37 indicates Positive momentum. The RSI at 20.46 is Positive, neither overbought nor oversold. The STOCH value of 24.63 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
LNR	77 Outperform	$4.49B	21.39	4.01%	1.37%	-5.33%	-57.58%
MG	76 Outperform	$19.45B	13.56	8.31%	4.09%	0.66%	-0.61%
XTC	64 Neutral	$245.31M	10.43	6.01%	6.55%	-3.50%	-22.76%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MRE	54 Neutral	C$734.43M	―	-2.64%	1.98%	-7.25%	-143.07%
DOO	54 Neutral	$6.57B	―	38.70%	0.97%	-13.78%	-115.58%
ACQ	38 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.

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 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.

The most recent analyst rating on (TSE:ACQ) stock is a Hold with a C$27.00 price target. To see the full list of analyst forecasts on AutoCanada stock, see the TSE:ACQ Stock Forecast page.

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.