Alaris Royalty (TSE:AD.UN)
TSX:AD.UN
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Alaris Royalty
(TSX:AD.UN)
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Rating:71Outperform
Price Target:
C$25.00
▲(11.41% Upside)
Action:Upgraded
Date:05/09/26
The score is driven primarily by mixed financial quality: strong reported profitability and moderate leverage are meaningfully weakened by negative operating/free cash flow. Offsetting that, valuation is compelling (low P/E and high yield) and technicals show a solid uptrend, while the latest earnings call was broadly positive with raised distributions, improved distributable cash flow, and supportive near-term revenue guidance despite some partner-specific and realization-timing risks.
Positive Factors
Recurring royalty business model
Alaris’s core model—upfront capital for contractual royalty streams—creates durable, contractually backed recurring cash inflows that are less cyclical than pure equity returns. This structure supports predictable revenue generation and portfolio-level cash resiliency over multiple quarters, aiding long-term distribution planning and reinvestment capacity.
Negative Factors
Negative operating and free cash flow
A material cash-earnings disconnect—positive net income but large negative operating and free cash flow—signals durability risk for distributions and reinvestment. Persistently negative cash flow elevates refinancing and liquidity risk, pressures internal funding of new deals, and may force reliance on credit or asset realizations if not normalized.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring royalty business model
Alaris’s core model—upfront capital for contractual royalty streams—creates durable, contractually backed recurring cash inflows that are less cyclical than pure equity returns. This structure supports predictable revenue generation and portfolio-level cash resiliency over multiple quarters, aiding long-term distribution planning and reinvestment capacity.
Read all positive factors
Alaris Royalty (AD.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.06B
Dividend Yield6.43%
Average Volume (3M)72.61K
Price to Earnings (P/E)5.8
Beta (1Y)0.95
Revenue Growth-13.30%
EPS Growth-40.79%
CountryCA
Employees25
SectorFinancial
Sector Strength70
IndustryAsset Management - Income
Share Statistics
EPS (TTM)2.39
Shares Outstanding45,338,810
10 Day Avg. Volume76,803
30 Day Avg. Volume72,608
Financial Highlights & Ratios
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 CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$26.25Price Target Upside16.98% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)2.05
Revenue Forecast (FY)C$211.65M
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 turnar...
How the Company Makes Money
Alaris makes money primarily by investing capital into private companies and receiving contractually defined royalty payments in return. These royalties are typically structured as recurring payments (often tied to a measure such as the partner co...
Alaris Royalty Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational and financial picture: revenue, partner distributions, distributable cash flow and net book value improved, management deployed capital actively (including a $75M Kubik investment), realized and unrealized gains were reported, and liquidity remains available to fund additional deals. Key challenges include modestly lower operating earnings driven by higher compensation expense, some partner-specific softness (Shipyard, partial distributions at FMP) and short-term volatility in certain portfolio companies (Sono Bello TTM weakness). Cash tax lumpiness and uncertainty around timing of common equity realizations add caution, but overall the positives (growth in cash flow, conservative payout, strong pipeline, redeployment capacity and partner recoveries) outweigh the negatives.Positive Updates
Revenue and Partner Distribution Growth
Total revenue and operating income increased 2.7% in the quarter. Partner distribution revenue rose 11% year-over-year, with preferred distributions up ~10% (driven by 2025 investments and distribution resets) and common distributions higher quarter-over-quarter (timing/variability).
Negative Updates
Modest Decline in Earnings from Operations
Earnings from operations were down modestly year-over-year, primarily due to higher compensation expense tied to the new participation/TRP plan, which reduced reported operating earnings for the quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Partner Distribution Growth
Total revenue and operating income increased 2.7% in the quarter. Partner distribution revenue rose 11% year-over-year, with preferred distributions up ~10% (driven by 2025 investments and distribution resets) and common distributions higher quarter-over-quarter (timing/variability).
Read all positive updates
Company Guidance
Management guided Q2 partner revenue of approximately $48 million and a 12‑month run‑rate revenue of about $203 million, raised the annual distribution to $1.52 per unit (which would lift the pro forma Q1 payout to ~53%), and reiterated a target payout range of 65%–70% while noting reported Q1 payout was 51.9% (vs. just over 51% a year ago) and the outlook payout sits nearer 60%–65%. They also highlighted that Q1 distributable cash flow rose ~6% YoY, total revenue and operating income were up 2.7%, partner distribution revenue was +11% (preferred distributions ~+10%), net book value per unit increased to $25.31 (+$0.52) with earnings from operations of $0.55/unit and FX gains of $0.44/unit, fair‑value movement was ~+$8M (Fleet +USD10M, Shipyard −USD6M), a partial 3E redemption generated a realized gain of ~$3.8M, subsequent deployment included a $75M investment in Kubik, common distributions embedded in the $203M run‑rate are about $15M, earnings coverage is ~1.5x, and available liquidity includes USD115M on the revolver with a preapproved USD50M incremental capacity (facility up to USD500M).Alaris Royalty Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
32
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 220.04M | 222.63M | 154.99M | 241.25M | 227.99M | 157.59M |
| Gross Profit | 197.90M | 193.43M | 154.99M | 179.08M | 227.99M | 157.59M |
| EBITDA | 179.07M | 186.23M | 240.59M | 202.66M | 183.36M | 191.24M |
| Net Income | 108.25M | 90.81M | 234.41M | 138.45M | 130.68M | 144.24M |
Balance Sheet | ||||||
| Total Assets | 1.45B | 1.42B | 1.20B | 1.47B | 1.37B | 1.28B |
| Cash, Cash Equivalents and Short-Term Investments | 5.73M | 6.38M | 4.20M | 15.18M | 60.19M | 18.45M |
| Total Debt | 264.94M | 263.74M | 64.64M | 403.39M | 372.49M | 416.66M |
| Total Liabilities | 304.11M | 296.83M | 97.72M | 514.07M | 471.85M | 486.35M |
| Stockholders Equity | 1.15B | 1.12B | 1.10B | 960.82M | 898.25M | 788.86M |
Cash Flow | ||||||
| Free Cash Flow | -128.07M | -124.71M | 59.37M | 82.96M | 152.42M | -15.44M |
| Operating Cash Flow | -128.07M | -124.71M | 59.37M | 82.96M | 152.42M | 104.16M |
| Investing Cash Flow | 0.00 | 0.00 | 0.00 | -98.32M | 14.85M | -228.99M |
| Financing Cash Flow | 129.96M | 126.94M | -62.12M | -29.91M | -125.16M | 128.47M |
Alaris Royalty Technical Analysis
Positive
22.44
Price Trends
21.75
Positive
21.58
Positive
20.00
Positive
Market Momentum
0.35
Negative
67.78
Neutral
85.36
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AD.UN, the sentiment is Positive. The current price of 22.44 is below the 20-day moving average (MA) of 22.69, above the 50-day MA of 21.75, and above the 200-day MA of 20.00, indicating a bullish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 67.78 is Neutral, neither overbought nor oversold. The STOCH value of 85.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AD.UN.
Alaris Royalty Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | C$1.06B | 5.78 | 9.65% | 6.43% | -13.30% | -40.79% | |
71 Outperform | C$1.04B | 2.39 | 5.72% | 0.14% | -57.36% | -41.04% | |
70 Outperform | C$1.02B | 9.97 | 12.71% | 7.33% | 10.47% | 9.78% | |
69 Neutral | C$1.08B | 18.29 | 9.72% | 3.01% | 4.44% | 18.34% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | C$691.97M | 38.32 | 16.96% | 1.51% | 9.56% | ― |
* Financial Sector Average
TSE:AD.UN
Alaris Royalty
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Alaris Royalty Corporate Events
Business Operations and StrategyDividendsPrivate Placements and Financing
Alaris Invests $75.3 Million in Kubik and Lifts Distribution 3%
Positive
Apr 2, 2026
Alaris Equity Partners has invested $75.3 million in Kubik LP, a Toronto-based designer and fabricator of custom trade show exhibits and immersive brand environments serving Fortune 500 clients worldwide. The deal combines $62.5 million in debt an...
Business Operations and StrategyDividends
Alaris Equity Partners Declares First-Quarter 2026 Distribution
Positive
Mar 19, 2026
Alaris Equity Partners Income Trust has declared a first-quarter 2026 distribution of $0.37 per trust unit, equivalent to $1.48 on an annualized basis, payable on April 15 to unitholders of record as of March 31. The announcement underscores the t...
Business Operations and StrategyFinancial Disclosures
Alaris Equity Partners Sets March 9 Release for 2025 Year-End Results
Positive
Mar 3, 2026
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 an...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.