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Alithya Group (TSE:ALYA)
TSX:ALYA
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Alithya Group
(TSX:ALYA)
Rating:53Neutral
Price Target:―
Positive Factors
Earnings
Alithya Group, Inc. reported fiscal Q4/25 adjusted EPS of C$0.12, which exceeded the forecast of C$0.05 and the FactSet consensus forecast of C$0.05.
Financial Performance
Alithya reported fiscal Q4/25 adjusted EBITDA of C$18.0 million, which was 86% higher than the forecast of C$9.7 million and 67% higher than the FactSet consensus forecast of C$10.8 million.
Investment Rating
The OUTPERFORM investment rating on ALYA-CA shares is maintained and the 12-month price target is increased to C$3.00 from C$2.50.
Negative Factors
Bookings
During the quarter, Alithya generated bookings of C$100.1 million, down 25% YOY and down 28% sequentially on extended sales cycles.
Price Target
The 12-month price target was reduced due to multiple contraction in the peer group average.
Alithya Group (ALYA) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$226.42M
Dividend YieldN/A
Average Volume (3M)114.38K
Price to Earnings (P/E)213.1
Beta (1Y)1.05
Revenue Growth-7.52%
EPS Growth88.69%
CountryCA
Employees3,000
SectorTechnology
Sector Strength87
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.08
Shares Outstanding92,030,850
10 Day Avg. Volume236,036
30 Day Avg. Volume114,377
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)1.09
Price to Sales (P/S)0.00
P/FCF Ratio33.39
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.51Price Target Upside9.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Alithya Group Business Overview & Revenue Model
Company DescriptionAlithya Group (ALYA) is a North American leader in strategy and digital transformation, specializing in the design and implementation of innovative solutions for complex business challenges. Operating primarily in Canada, the United States, and Europe, Alithya offers a comprehensive range of services across sectors such as finance, manufacturing, energy, telecommunications, and healthcare. The company's core offerings include digital transformation consulting, application services, enterprise solutions, and data and analytics.
How the Company Makes MoneyAlithya Group generates revenue through a diverse array of IT and business consulting services, which are tailored to meet the specific needs of its clients across various industries. The company's primary revenue streams include fees from digital transformation consulting, which helps businesses modernize their operations and improve efficiency; application services, encompassing the development, implementation, and maintenance of software applications; and enterprise solutions, which involve deploying and optimizing large-scale ERP systems. Alithya also capitalizes on data and analytics services, providing businesses with insights to drive decision-making. The company's revenue is further bolstered by strategic partnerships with leading technology providers such as Microsoft and Oracle, enabling it to offer comprehensive solutions that leverage cutting-edge technologies.
Alithya Group Earnings Call Summary
Earnings Call Date:Jun 12, 2025
(Q4-2025)
| % Change Since: 19.37%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong operational improvements and financial performance, highlighted by record gross margins and adjusted EBITDA. While market uncertainty poses challenges, the company's strategic acquisitions and high customer satisfaction provide a solid foundation for continued growth. The withdrawal of long-term guidance adds a note of caution but does not overshadow the positive achievements.Q4-2025 Updates
Positive Updates
Adjusted EBITDA Improvement
Adjusted EBITDA for Q4 was 14.4%, and 10.1% for the fiscal year, showing sequential and year-over-year growth due to higher-value business growth and operational efficiencies.
Record Gross Margin
Q4 gross margin reached a high watermark at 36.8% as a percentage of revenue, an increase from the previous year and previous quarter, attributed to improved utilization and higher-value services.
Revenue Growth
Quarterly revenues for Q4 increased by 4% year-over-year and 8.3% sequentially, driven by higher-value service offerings in all geographies.
Strong Cash Flow and Deleveraging
Strong cash flow resulted in a net debt to adjusted EBITDA ratio of less than 2x, providing flexibility for acquisitions.
Notable Client Wins
Key client wins included Delta Dental of California and Hayward Holdings, highlighting successful engagements in enterprise transformation services and AI enablement.
Successful Acquisition of eVerge
The acquisition of eVerge enhances Alithya's Oracle and Salesforce capabilities, adding to their smart shoring capacity with operations in Bangalore.
High Customer Satisfaction
Alithya received an average customer satisfaction rating of 9.0 out of 10 from 194 surveys completed in fiscal year 2025.
Negative Updates
Market Uncertainty
Economic conditions have led to buyer hesitancy and longer sales cycles, impacting Q4 bookings, which were $100.1 million, or 0.8x revenue.
Withdrawal of Long-Term Guidance
Due to market uncertainties and being ahead of plan on EBITDA and gross margins, Alithya has withdrawn its previously stated long-term guidance.
Company Guidance
During the Alithya Fourth Quarter and Fiscal 2025 Results Conference Call, the management team provided detailed guidance on the company's performance and future prospects. The call highlighted several key metrics, including a notable sequential and year-over-year improvement in adjusted EBITDA, which reached 14.4% for the quarter and 10.1% for the fiscal year, driven by a focus on higher-value business growth and operational efficiencies. The gross margin as a percentage of revenue hit a high of 36.8%, attributed to the delivery of higher-value services, improved utilization, and leveraging the company's IP and smart shore business model. The call also emphasized sequential and year-over-year growth in quarterly revenues, stemming from high-demand service offerings across all geographies. Alithya's strong cash flow enabled the company to conclude the year with a net debt to adjusted EBITDA ratio of less than 2x, providing flexibility for potential acquisitions. The management team also discussed the recent acquisition of eVerge, which is expected to enhance Alithya's Oracle, AI, and smart shoring capabilities while adding a Salesforce component, further strengthening the company's market position.Alithya Group Financial Statement Overview
Summary
Alithya Group's financial performance shows mixed results. The company has persistent net losses and negative net profit margins, despite revenue growth and positive cash flow trends. The balance sheet reveals a moderate debt-to-equity ratio and stable capital structure, yet the ongoing lack of profitability is a significant concern that impacts overall financial health.Income Statement
Alithya Group's income statement reveals challenges in profitability despite growth in total revenue over the years. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 29.2%. However, the company has been consistently recording negative net income, indicating persistent net losses, which result in a negative net profit margin. EBIT margin is low, and despite a positive EBITDA margin, the lack of net income profitability remains a key concern.45
Neutral
Balance Sheet
The balance sheet of Alithya Group shows a moderate debt-to-equity ratio of approximately 0.75 for TTM, indicating a balanced approach to leverage. The equity ratio is around 41.4%, reflecting a stable capital structure with a reasonable proportion of equity financing. However, the return on equity (ROE) remains negative due to ongoing net losses, highlighting challenges in generating returns for shareholders.60
Neutral
Cash Flow
Cash flow analysis indicates a positive trend with growing free cash flow, notably a TTM free cash flow of approximately $35.5 million. The operating cash flow to net income ratio is favorable, suggesting effective cash generation relative to net losses. However, the free cash flow to net income ratio reflects the ongoing net losses, which could impact long-term financial health if not addressed.55
Neutral
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 468.69M | 491.13M | 522.70M | 437.88M | 287.64M | 279.01M |
| Gross Profit | 136.95M | 140.84M | 151.77M | 116.15M | 83.02M | 82.97M |
| EBITDA | 28.05M | 24.93M | 7.36M | 5.80M | -809.00K | -25.60M |
| Net Income | -4.45M | -16.66M | -30.10M | -15.55M | -17.34M | -39.67M |
Balance Sheet | ||||||
| Total Assets | 266.59M | 416.50M | 464.10M | 447.72M | 243.26M | 257.82M |
| Cash, Cash Equivalents and Short-Term Investments | 21.12M | 8.86M | 22.58M | 17.66M | 6.90M | 8.81M |
| Total Debt | 59.43M | 128.90M | 145.71M | 127.94M | 70.41M | 66.46M |
| Total Liabilities | 116.14M | 241.29M | 277.03M | 247.97M | 135.25M | 130.45M |
| Stockholders Equity | 150.45M | 175.20M | 187.07M | 199.75M | 108.01M | 127.37M |
Cash Flow | ||||||
| Free Cash Flow | 35.53M | 14.88M | 26.30M | -4.71M | -2.73M | 4.16M |
| Operating Cash Flow | 36.82M | 15.67M | 28.88M | -1.63M | -456.00K | 8.69M |
| Investing Cash Flow | -7.67M | -787.00K | -13.73M | -18.94M | -4.57M | -18.20M |
| Financing Cash Flow | -28.54M | -28.58M | -11.33M | 31.40M | 3.42M | 4.94M |
Alithya Group Technical Analysis
Neutral
2.28
Price Trends
1.98
Positive
1.92
Positive
1.81
Positive
Market Momentum
0.14
Positive
53.66
Neutral
22.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ALYA, the sentiment is Neutral. The current price of 2.28 is below the 20-day moving average (MA) of 2.29, above the 50-day MA of 1.98, and above the 200-day MA of 1.81, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 53.66 is Neutral, neither overbought nor oversold. The STOCH value of 22.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ALYA.
Alithya Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.29B | 16.50 | 13.26% | 5.09% | 5.12% | -2.77% | |
71 Outperform | $1.29B | 16.50 | 13.26% | 5.09% | 5.12% | -2.77% | |
71 Outperform | C$585.28M | 130.72 | 6.39% | 0.86% | 2.61% | 46.26% | |
70 Outperform | C$106.06B | 102.90 | 27.41% | 0.11% | 20.99% | 33.05% | |
70 Outperform | C$106.06B | 102.90 | 27.41% | 0.11% | 20.99% | 33.05% | |
68 Neutral | C$198.58M | ― | -3.13% | 0.47% | -13.99% | -421.95% | |
64 Neutral | C$5.70B | 408.43 | 2.32% | ― | 15.14% | -31.45% | |
64 Neutral | C$5.70B | 408.43 | 2.32% | ― | 15.14% | -31.45% | |
53 Neutral | $226.42M | 213.08 | 0.57% | ― | -7.52% | 88.69% | |
49 Neutral | C$2.97B | 2.15 | -83.78% | 2.54% | 12.97% | -24.70% |
* Technology Sector Average
Performance Comparison
TSE:ALYA
Alithya Group
2.28
0.22
10.68%
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23.57
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TSE:ENGH
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23.57
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TSE:KXS
Kinaxis Inc
201.07
41.26
25.82%
TSE:KXS
Kinaxis Inc
201.07
41.26
25.82%
TSE:TCS
TECSYS Inc. J
39.45
3.61
10.07%
TSE:SYZ
Sylogist
8.49
-1.30
-13.28%
TSE:CSU
Constellation Software
5,005.00
961.32
23.77%
TSE:CSU
Constellation Software
5,005.00
961.32
23.77%
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.