Alaris Royalty (AD.UN) AI Stock Analysis

• Market Cap: C$904.06M
• Dividend Yield: 6.43%
• Average Volume (3M): 72.61K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.98
• Revenue Growth: 11.16%
• EPS Growth: -14.26%
• Country: CA
• Employees: 25
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management - Income
• EPS (TTM): >-0.01
• Shares Outstanding: 45,338,810
• 10 Day Avg. Volume: 76,803
• 30 Day Avg. Volume: 72,608
• PEG Ratio: -0.17
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 4.20
• P/FCF Ratio: -7.50
• 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$25.25
• Price Target Upside: 26.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.34
• Revenue Forecast (FY): C$207.01M

• Rating: 60 Neutral
• Price Target: C$21.50 ▲(7.82% Upside)
• Action: Downgraded Date: 03/12/26
• Date: Action: Downgraded 03/12/26

The score is held back primarily by the sharp deterioration in 2025 cash flow and overall earnings/cash-flow volatility, reinforced by weak technical momentum. These risks are partially offset by an attractive valuation (low P/E and high dividend yield) and a generally positive earnings-call outlook with record book value growth and active deployment.

Positive Factors

Recurring royalty cash flows

Alaris’s core model generates contractual, recurring royalties and distributions from private partners, creating predictable cash inflows less tied to day-to-day operations. This durable cash stream supports steady distributions, risk-managed deployment, and long-term income generation for unitholders.

Diversified partner portfolio

A broad mix of partners and a 1.5x weighted coverage ratio reduce single-asset exposure and enhance collectability. With most partners lowly levered, portfolio diversification and partner balance-sheet strength improve resilience across economic cycles and lower idiosyncratic distribution risk.

Proven capital deployment and book value growth

Consistent deployment and record book value growth show Alaris’s ability to originate and structure accretive royalty investments. Demonstrated deal flow and follow-on investing capacity support long-term NAV growth and the firm’s capacity to recycle capital into yield-accretive opportunities.

Negative Factors

Sharp cash flow deterioration in 2025

The swing to negative operating and free cash flow is a material quality-of-earnings issue. Persistent cash shortfalls would constrain distributions, limit new investments, and force greater reliance on external financing, raising structural liquidity and financing cost risks.

Earnings volatility and non-operating items

Significant non-operating gains and volatile margins reduce transparency into recurring profitability. This makes forecasting distributable cash flows harder, undermines confidence in sustainable earnings power, and complicates long-term distribution planning and capital allocation.

Increased leverage in 2025

Rising leverage amid weaker cash generation elevates refinancing and covenant risk. Higher debt increases sensitivity to partner payment variability and macro stress, reducing balance-sheet flexibility to fund new investments or absorb partner-specific shocks over the medium term.

Alaris Royalty Business Overview & Revenue Model

Company Description

Alaris Equity Partners Income Trust is a private equity firm specializing in management buyouts, growth capital, lower & middle market, later stage, industry consolidation, growth capital, and mature investments. The firm does not invest in turnarounds and start-ups. It prefers to invest in the companies based in all industries except for those with a declining asset base, such as oil and gas resource companies, or any industry that carry the risk of obsolescence such as high tech and focuses on business services, professional services, information services, healthcare services, distribution & logistics, industrials, consumer products. The firm seeks to invest in companies raising capital for a partial liquidity, generational transfer, recapitalization, and growth and who do not want to give up control or chance the added risk that comes with high leverage levels. It prefers to invest in companies that are mostly individual or family controlled. The firm typically provides alternative financing for a diversified group of private businesses ("Private Company Partners") in exchange for royalties or distributions from the Private Company Partners, with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. It seeks to invest in the companies based in Europe, North America with the focus on Canada, and United States. It typically invests between $5 million and $100 million in companies with an enterprise values between $10 million and $400 million and EBITDA between $5 million and $50 million, historical EBITDA in excess of $10 million, and Low levels of debt and capital expenditure. The firm also makes small cap investments upto $20 million in private companies that have historical EBITDA in excess of $2 million. However, for larger companies, transactions can be structured to include additional investments. The firm seeks to invest in industries that do not experience large cyclical swings. It does not own any shares and does not require board representation. The firm invests through balance sheet and seeks equity dividend distribution from portfolios. It prefers to make non control equity, minority and majority investments in its portfolio companies. Alaris Royalty Corp. was founded in 2008 and is based in Calgary, Canada.

How the Company Makes Money

Alaris makes money primarily by investing capital into private companies (its “partner” businesses) and receiving ongoing cash payments under contractual royalty/distribution agreements. These agreements are typically structured to provide recurring payments (often monthly or quarterly), and the amounts are generally designed to deliver a targeted return on the invested capital. In addition to base royalties/distributions, Alaris may earn incremental returns through contractual features such as payment escalators, performance-based adjustments, or other return-enhancing provisions when applicable; if specific terms are not publicly disclosed for a given partner, null. Alaris can also generate earnings from one-time events such as transaction fees, restructuring outcomes, or gains/losses when it exits or modifies an investment (for example, when a partner repurchases Alaris’s interest, refinances, or when Alaris sells its stake); if specific instances are not publicly disclosed, null. The company’s ability to pay distributions to its own unitholders depends largely on the stability, diversification, and collectability of these partner payments, as well as its funding costs and access to capital to originate new royalty investments.

Alaris Royalty Financial Statement Overview

Summary

Reported profitability and a generally solid balance sheet are offset by a major quality-of-earnings concern: 2025 operating and free cash flow turned sharply negative despite positive net income. Revenue and earnings volatility (including non-operating impacts, notably in 2024) and higher leverage in 2025 further weaken visibility.

Income Statement

Revenue growth has been volatile (strong rebounds in 2021–2022 and 2025, but declines in 2020 and 2024), which lowers visibility. Profitability looks very strong on paper, with consistently high gross and operating margins and generally healthy net margins; however, 2024 shows an unusually high net margin (above 100%), suggesting material non-operating items are influencing earnings and making year-to-year comparability weaker. Net income fell sharply in 2025 versus 2024 despite higher revenue, signaling earnings sensitivity to items beyond core revenue.

Balance Sheet

The balance sheet appears solid with a sizable equity base and moderate leverage overall. Debt levels and the debt-to-equity ratio improved meaningfully from 2021 to 2024, but leverage stepped up again in 2025, which increases financial risk versus the prior year. Returns on equity have been strong in most years (notably 2021–2024) but dropped in 2025, indicating weaker profitability relative to the capital base despite higher revenue.

Cash Flow

Cash generation deteriorated significantly in 2025, with operating and free cash flow turning sharply negative despite positive net income, a major quality-of-earnings red flag. Prior years were generally positive on operating cash flow and often well above net income, but free cash flow has been inconsistent (including a negative year in 2021 and a large reversal in 2025). Overall, the recent swing to negative cash flow meaningfully weakens financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	222.63M	154.99M	241.25M	227.99M	157.59M
Gross Profit	193.43M	154.99M	179.08M	227.99M	157.59M
EBITDA	186.23M	240.59M	202.66M	183.36M	191.24M
Net Income	90.81M	234.41M	138.45M	130.68M	144.24M
Balance Sheet
Total Assets	1.42B	1.20B	1.47B	1.37B	1.28B
Cash, Cash Equivalents and Short-Term Investments	6.38M	4.20M	15.18M	60.19M	18.45M
Total Debt	263.74M	64.64M	403.39M	372.49M	416.66M
Total Liabilities	296.83M	97.72M	514.07M	471.85M	486.35M
Stockholders Equity	1.12B	1.10B	960.82M	898.25M	788.86M
Cash Flow
Free Cash Flow	-124.71M	59.37M	82.96M	152.42M	-15.44M
Operating Cash Flow	-124.71M	59.37M	82.96M	152.42M	104.16M
Investing Cash Flow	0.00	0.00	-98.32M	14.85M	-228.99M
Financing Cash Flow	126.94M	-62.12M	-29.91M	-125.16M	128.47M

Alaris Royalty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AD.UN, the sentiment is Negative. The current price of 19.94 is below the 20-day moving average (MA) of 21.31, below the 50-day MA of 21.69, and above the 200-day MA of 19.68, indicating a neutral trend. The MACD of -0.55 indicates Positive momentum. The RSI at 29.71 is Positive, neither overbought nor oversold. The STOCH value of 24.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AD.UN.

Alaris Royalty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AGF.B	79 Outperform	C$1.20B	7.10	9.85%	3.01%	11.23%	30.44%
CVG	71 Outperform	C$1.00B	2.39	5.72%	0.14%	-44.78%	-95.84%
MKP	69 Neutral	C$890.81M	11.86	11.93%	7.33%	7.74%	-31.96%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AD.UN	60 Neutral	C$904.06M	10.30	8.17%	6.43%	11.16%	-14.26%
ECN	53 Neutral	C$867.74M	21.77	10.01%	1.32%	27.37%	―
DLCG	50 Neutral	C$627.66M	23.57	-85.46%	1.51%	36.52%	-1243.96%

Alaris Royalty Corporate Events

Alaris Equity Partners Sets March 9 Release for 2025 Year-End Results

Alaris Equity Partners Income Trust will release its year-end financial results for the period ended December 31, 2025, after markets close on March 9, 2026, with management hosting a conference call the following morning to discuss performance and provide an outlook. The scheduled webcast and archived replay underscore the Trust’s continued emphasis on investor communication and transparency as it executes its structured equity strategy for income-focused unitholders.

The timing and format of the disclosure give analysts and investors a clear window to assess recent portfolio performance and the outlook for distributions, which are central to Alaris’s value proposition. The engagement effort may help reinforce market confidence in its private-company investment model at a time when visibility into private assets remains a key concern for income-oriented investors.

The most recent analyst rating on ($TSE:AD.UN) stock is a Buy with a C$27.50 price target. To see the full list of analyst forecasts on Alaris Royalty stock, see the TSE:AD.UN Stock Forecast page.

Alaris Equity Partners Declares Q4 Distribution of $0.37 per Unit

Alaris Equity Partners Income Trust has declared a fourth-quarter 2025 distribution of $0.37 per trust unit, equivalent to $1.48 per unit on an annualized basis, payable on January 15, 2026 to unitholders of record as of December 31, 2025. The announcement underscores the trust’s ongoing commitment to delivering consistent income to its investors, reflecting the cash-generating capacity of its structured equity portfolio and reinforcing its positioning as a provider of stable, yield-oriented exposure to private company investments.

The most recent analyst rating on ($TSE:AD.UN) stock is a Buy with a C$27.00 price target. To see the full list of analyst forecasts on Alaris Royalty stock, see the TSE:AD.UN Stock Forecast page.

Alaris Equity Partners Closes $115 Million Convertible Debentures Offering

Alaris Equity Partners has successfully closed a $115 million bought deal offering of 6.25% convertible unsecured senior debentures, which will begin trading on the Toronto Stock Exchange under the symbol ‘AD.DB.C’. The proceeds from this offering will be used to partially repay outstanding debts and support future investments, demonstrating the Trust’s strategic effort to strengthen its financial position and expand its portfolio of private business investments.

The most recent analyst rating on ($TSE:AD.UN) stock is a Buy with a C$27.00 price target. To see the full list of analyst forecasts on Alaris Royalty stock, see the TSE:AD.UN Stock Forecast page.

Alaris Equity Partners Announces $100 Million Debenture Offering

Alaris Equity Partners has announced the filing of a final short form prospectus for a $100 million offering of 6.25% convertible unsecured senior debentures, with an option for underwriters to purchase an additional $15 million. This move is part of Alaris’s strategy to strengthen its financial position and provide stable returns to its investors. The closing of the offering is expected on December 17, 2025, subject to customary conditions, and marks a significant step in Alaris’s ongoing efforts to enhance its market presence and investment capabilities.

The most recent analyst rating on ($TSE:AD.UN) stock is a Buy with a C$27.00 price target. To see the full list of analyst forecasts on Alaris Royalty stock, see the TSE:AD.UN Stock Forecast page.