Altus Group (AIF) AI Stock Analysis

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Altus Group

(TSX:AIF)

Rating:66Neutral

Price Target:

C$57.00

▲(8.47%Upside)

Altus Group's stock score is primarily driven by its strong financial performance and positive earnings call results, demonstrating robust profit and margin improvements. However, valuation concerns due to a negative P/E ratio and mixed technical indicators weigh down the overall score. Corporate events further bolster the positive outlook with shareholder confidence and strategic initiatives.

Positive Factors

Customer Feedback

Customers we spoke to had positive feedback. Several are long-standing ARGUS customers, and spoke highly of it being the industry standard.

Technological Advancements

Altus Intelligence is leveraging AI to deliver predictive analytics capabilities, which provides a compelling use case for adoption.

Negative Factors

Earnings Visibility

New Bookings are expected to remain under pressure absent a recovery in CRE transaction activity which reduces earnings visibility.

Altus Group (AIF) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$2.34B

Dividend Yield1.14%

Average Volume (3M)115.64K

Price to Earnings (P/E)178.1

Beta (1Y)1.05

Revenue Growth-23.26%

EPS Growth-644.01%

CountryCA

Employees2,000

SectorReal Estate

Sector Strength66

IndustryReal Estate - Services

Share Statistics

EPS (TTM)0.19

Shares Outstanding44,613,354

10 Day Avg. Volume138,104

30 Day Avg. Volume115,645

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)2.93

Price to Sales (P/S)0.00

P/FCF Ratio33.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$58.00

Price Target Upside10.37% Upside

Rating ConsensusHold

Number of Analyst Covering3

Altus Group Business Overview & Revenue Model

Company DescriptionAltus Group Limited (AIF) is a leading provider of software, data solutions, and advisory services to the global commercial real estate industry. The company operates across various sectors, including real estate consulting, property tax consulting, and data analytics, delivering insights and solutions that help clients maximize the value of their real estate assets. Altus Group's core products and services include real estate software, property tax advisory, valuation and cost advisory, and data analytics services.

How the Company Makes MoneyAltus Group Limited makes money through a diverse revenue model that includes software subscriptions, consulting services, and data analytics solutions. The company's key revenue streams are derived from its proprietary software platforms, such as ARGUS, which provide real estate asset and investment management solutions. Additionally, Altus Group generates revenue from its advisory services, which offer expertise in property tax assessments, valuations, and cost management. The company benefits from significant partnerships with real estate firms and investors, which enhance its market reach and service offerings. Altus Group also capitalizes on its extensive database and analytics capabilities to provide valuable market insights, further contributing to its earnings.

Altus Group Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 0.46%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

Altus Group demonstrated strong financial performance with significant profit and margin improvements, recurring revenue growth, and successful new product launches. However, challenges in the CRE transactions and macroeconomic uncertainties present potential risks. The strong cash position and strategic share buybacks underscore financial robustness.

Q1-2025 Updates

Positive Updates

Significant Improvement in Profit and Margin

Profit from continuing operations improved by 47%, and adjusted EBITDA was up 29.7%, driving a 280 basis point margin improvement.

Strong Recurring Revenue Growth

Q1 recurring revenue was up 2.1%, with ARGUS Intelligence leading total revenue growth. Recurring new bookings improved by 34.3%.

Successful Launch of Benchmark Manager

Benchmark Manager was launched in Q1, building on the ARGUS Intelligence platform, providing significant industry benchmarking capabilities.

Substantial Share Buyback and Debt Reduction

Deployed $76.3 million towards a share buyback, reducing outstanding shares to 44.4 million, and reduced debt by $127 million.

Strong Cash Position

Improved cash position to $491.9 million and continued strong cash from operations, driven by improvements in working capital.

Negative Updates

Consolidated Revenue Decline

Consolidated revenue was modestly down, impacted by the Appraisals and Development Advisory segment.

Muted CRE Transactions Affecting Revenue

CRE transactions remain muted, leading to lighter revenue than guidance in the Appraisals and Development Advisory segment.

Macro-economic Volatility and Challenges

Potential macroeconomic volatility, particularly surrounding tariffs, could introduce uncertainty in the market.

Flat VMS Growth

VMS growth was modest due to seasonality and the current macroeconomic environment affecting asset deployments.

Company Guidance

During Altus Group's Q1 2025 earnings call, the company provided guidance highlighting several key metrics. Recurring revenue grew by 2.1%, driven by strong ARGUS software performance, while consolidated revenue saw a slight decline due to challenges in the Appraisals and Development Advisory segment. Profit from continuing operations improved by 47%, and adjusted EBITDA increased by 29.7%, resulting in a 280 basis point margin expansion. Cash from operating activities and free cash flow both showed significant growth. The company also achieved a 34.3% increase in recurring new bookings, which included a notable $5 million contribution from a three-year subscription deal with Ryan Tax. Altus Group retired its cloud adoption metric after reaching 90% of users contracted on the cloud. Additionally, restructuring efforts in the Appraisals and Development Advisory segment contributed to a $1.3 million improvement in adjusted EBITDA. The call emphasized the company's commitment to steady margin improvements, strategic product launches like Benchmark Manager, and an optimistic outlook for the back half of 2025, despite macroeconomic uncertainties.

Altus Group Financial Statement Overview

Summary

Altus Group presents a stable financial position with strong gross margins and prudent balance sheet management. The significant net income and cash flow improvements in the TTM period are notable, but the underlying reasons should be examined for sustainability. While the company shows potential with low leverage and strong cash generation, the inconsistent revenue growth and historical volatility in financial metrics are areas to monitor for future stability.

Income Statement

Positive

The company's income statement shows a mixed performance. The TTM gross profit margin is strong at approximately 94%, reflecting efficient cost management. However, the net profit margin is highly inflated due to a substantial net income, likely from non-operational factors. Revenue growth is inconsistent, with a decrease in 2024 followed by a rebound in the TTM period. EBIT and EBITDA margins reveal moderate profitability, indicating room for operational improvements.

Balance Sheet

Positive

The balance sheet indicates a solid financial position with a low debt-to-equity ratio of 0.22, highlighting conservative leverage. The equity ratio is healthy at about 63.84%, suggesting the company is well-capitalized. However, the return on equity has been volatile, with a significant increase in the TTM period, warranting further investigation into sustainability.

Cash Flow

Positive

The cash flow statement shows strong free cash flow growth, supported by positive operating cash flow trends. The TTM period exhibits robust free cash flow growth, enhancing liquidity. The operating cash flow to net income ratio is favorable, indicating effective cash generation from operations. However, the historical volatility in cash flows suggests potential risks in maintaining consistent cash generation.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
599.79M	519.73M	772.84M	735.45M	625.39M	561.16M
	Gross Profit
564.13M	475.71M	714.90M	271.50M	223.93M	206.21M
	EBIT
49.66M	33.52M	48.81M	55.57M	48.02M	55.24M
	EBITDA
74.23M	50.23M	99.36M	74.95M	86.07M	85.15M
	Net Income Common Stockholders
389.36M	13.42M	10.23M	-889.00K	25.69M	21.43M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
42.86M	41.88M	41.89M	55.27M	51.27M	69.64M
	Total Assets
1.26B	1.25B	1.21B	1.26B	1.20B	735.40M
	Total Debt
407.64M	319.65M	355.55M	378.14M	358.06M	186.01M
	Net Debt
364.78M	277.77M	313.66M	322.88M	306.79M	116.38M
	Total Liabilities
659.80M	633.74M	612.16M	664.02M	609.84M	351.95M
	Stockholders Equity
604.54M	617.22M	602.54M	599.87M	589.48M	383.45M
Cash Flow		Free Cash Flow
77.54M	72.47M	58.94M	52.60M	45.68M	67.95M
	Operating Cash Flow
83.59M	79.92M	71.43M	77.08M	56.31M	72.30M
	Investing Cash Flow
660.16M	2.77M	-34.92M	-54.06M	-373.31M	-20.90M
	Financing Cash Flow
-298.65M	-75.62M	-51.78M	-18.66M	300.43M	-41.30M

Altus Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price52.55

Price Trends

50DMA

51.95

Positive

100DMA

53.63

Negative

200DMA

54.33

Negative

Market Momentum

MACD

0.10

Positive

RSI

38.88

Neutral

STOCH

13.04

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AIF, the sentiment is Negative. The current price of 52.55 is below the 20-day moving average (MA) of 54.67, above the 50-day MA of 51.95, and below the 200-day MA of 54.33, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 38.88 is Neutral, neither overbought nor oversold. The STOCH value of 13.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AIF.

Altus Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MEQ	77 Outperform	C$1.77B	7.22	15.90%	0.07%	16.22%	39.56%
FSV	72 Outperform	$10.96B	60.70	11.61%	0.58%	22.37%	46.30%
CIGI	69 Neutral	C$8.67B	43.86	11.57%	0.24%	17.07%	42.36%
AIF	66 Neutral	C$2.34B	178.14	2.13%	1.14%	-23.26%	-644.01%
SVI	63 Neutral	C$1.51B	―	-23.06%	0.28%	5.77%	-388.17%
Sector *	61 Neutral	$2.82B	10.88	0.42%	8438.92%	5.74%	-20.95%

* Real Estate Sector Average

Performance Comparison

TSE:AIF

Altus Group

51.98

5.51

11.86%

TSE:FSV

FirstService

241.52

35.48

17.22%

TSE:CIGI

Colliers International Group

172.76

22.43

14.92%

TSE:MEQ

Mainstreet Equity

191.16

20.28

11.87%

TSE:SVI

Storagevault Canada

4.13

-0.57

-12.13%

Altus Group Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures

Altus Group Reports Strong Q1 2025 Financial Results and Expands Share Buyback

Positive

May 8, 2025

Altus Group reported strong financial results for Q1 2025, highlighting resilient recurring revenue and expanded margins across business units. The company launched Benchmark Manager, signed numerous asset-based pricing agreements, and achieved significant software bookings growth, despite a decrease in CRE transaction volumes. Altus Group also returned over $76 million to shareholders through share buybacks, demonstrating its commitment to delivering value to stakeholders. The company maintains its fiscal 2025 guidance, anticipating continued revenue growth and margin expansion, supported by consistent asset growth on its Valuation Management Solutions platform and improved economic conditions in the CRE market.

Shareholder Meetings

Altus Group Reports 2025 AGM Voting Results

Positive

May 7, 2025

Altus Group announced the results of its 2025 Annual General Meeting, where all director nominees were elected and Ernst & Young LLP was appointed as the company’s auditor. The advisory vote on executive compensation was also supported by a majority of shareholders. This outcome reflects strong shareholder confidence in the company’s leadership and strategic direction.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.