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Alithya Group (TSE:ALYA)
TSX:ALYA
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Alithya Group
(TSX:ALYA)
Rating:66Neutral
Price Target:
C$2.50
▲(2.04%Upside)
Positive Factors
Earnings
Alithya 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 Group, Inc. reported fiscal Q4/25 total revenue of C$125.3 million, which was 5% higher than the forecast and the FactSet consensus forecast.
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
$250.38M
Dividend YieldN/A
Average Volume (3M)121.50K
Price to Earnings (P/E)229.0
Beta (1Y)1.03
Revenue Growth-3.59%
EPS GrowthN/A
CountryCA
Employees3,000
SectorTechnology
Sector Strength96
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.08
Shares Outstanding92,083,480
10 Day Avg. Volume67,300
30 Day Avg. Volume121,497
Financial Highlights & Ratios
PEG Ratio1.44
Price to Book (P/B)1.24
Price to Sales (P/S)0.00
P/FCF Ratio5.12
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.00Price Target Upside22.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Alithya Group Business Overview & Revenue Model
Company DescriptionAlithya Group (ALYA) is a leading North American company specializing in digital strategy and transformation. The company operates in sectors such as technology, manufacturing, healthcare, financial services, and energy. Alithya provides a wide range of services including business strategy, IT and digital transformation, enterprise solutions, and application services to help organizations enhance their digital capabilities and optimize their operations.
How the Company Makes MoneyAlithya Group generates revenue primarily through consulting and professional services in digital strategy, IT and digital transformation, and enterprise solutions. The company earns money by offering expert consulting services, managing IT projects, and implementing software solutions for its clients. Key revenue streams include fees for digital strategy consulting, IT project management, software implementation, and application management services. Alithya also benefits from strategic partnerships with major technology providers such as Oracle and Microsoft, which enable it to offer comprehensive solutions and expand its market reach.
Alithya Group Earnings Call Summary
Earnings Call Date:Jun 12, 2025
(Q4-2025)
| % Change Since: 28.27%|
Next Earnings Date:Aug 13, 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 shows signs of financial recovery with improved profitability and cash flow metrics. However, inconsistent revenue growth and historical profitability challenges present potential risks.Income Statement
Alithya Group's income statement reveals a mixed performance. The company has improved its gross profit margin over the years, reaching around 31% in the most recent period. However, net profit margins have been volatile, with a recent positive shift from a loss in previous years to a profit. Revenue growth has shown inconsistency, with recent periods experiencing declines. EBIT and EBITDA margins have improved, indicating better operational efficiency, but still reflect challenges in profitability.58
Neutral
Balance Sheet
The balance sheet displays a moderate financial structure with a debt-to-equity ratio that has remained stable but somewhat high, reflecting moderate leverage. The equity ratio is reasonable, indicating fair asset financing through equity. Return on equity has turned positive, suggesting improved profitability relative to shareholder investment, though historically it has been challenging.65
Positive
Cash Flow
The cash flow statement shows strong improvements with significant growth in free cash flow, indicating improved cash generation. The operating cash flow to net income ratio suggests effective cash conversion from earnings. Recent free cash flow to net income ratios are favorable, highlighting efficient capital management despite prior periods of cash flow challenges.72
Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 473.48M | 491.13M | 522.70M | 437.88M | 287.64M |
| Gross Profit | 147.01M | 140.84M | 151.77M | 116.15M | 83.02M |
| EBITDA | 36.00M | 24.93M | 7.36M | 5.80M | -809.00K |
| Net Income | 1.29M | -16.66M | -30.10M | -15.55M | -17.34M |
Balance Sheet | |||||
| Total Assets | 425.98M | 416.50M | 464.10M | 447.72M | 243.26M |
| Cash, Cash Equivalents and Short-Term Investments | 15.96M | 8.86M | 22.58M | 17.66M | 6.90M |
| Total Debt | 118.91M | 128.90M | 145.71M | 127.94M | 70.41M |
| Total Liabilities | 241.42M | 241.29M | 277.03M | 247.97M | 135.25M |
| Stockholders Equity | 184.56M | 175.20M | 187.07M | 199.75M | 108.01M |
Cash Flow | |||||
| Free Cash Flow | 46.99M | 14.88M | 26.30M | -4.71M | -2.73M |
| Operating Cash Flow | 48.43M | 15.67M | 28.88M | -1.63M | -456.00K |
| Investing Cash Flow | -7.82M | -787.00K | -13.73M | -18.94M | -4.57M |
| Financing Cash Flow | -34.15M | -28.58M | -11.33M | 31.40M | 3.42M |
Alithya Group Technical Analysis
Positive
2.45
Price Trends
2.19
Positive
1.98
Positive
1.86
Positive
Market Momentum
0.08
Negative
56.31
Neutral
73.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ALYA, the sentiment is Positive. The current price of 2.45 is above the 20-day moving average (MA) of 2.39, above the 50-day MA of 2.19, and above the 200-day MA of 1.86, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 56.31 is Neutral, neither overbought nor oversold. The STOCH value of 73.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ALYA.
Alithya Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $250.38M | 228.97 | 0.57% | ― | -3.59% | ― | |
66 Neutral | $30.41B | 17.72 | 18.44% | 0.33% | 4.60% | 8.67% | |
58 Neutral | C$104.58M | 13.71 | 124.21% | ― | -52.43% | 941.71% | |
51 Neutral | C$34.60M | ― | -18.24% | ― | -10.76% | -19.28% | |
50 Neutral | C$3.11B | 2.48 | -63.12% | 2.59% | 4.49% | -5.92% | |
46 Neutral | C$1.82M | ― | -158.04% | ― | 49.97% | 67.56% | |
41 Neutral | $2.68M | ― | 30.86% | ― | 5.24% | 1.47% |
* Technology Sector Average
Performance Comparison
TSE:ALYA
Alithya Group
2.45
0.64
35.36%
TSE:GIB.A
CGI
137.55
-12.52
-8.34%
TSE:NERD
Nerds On Site
0.03
-0.02
-33.33%
TSE:KNR
Kontrol Technologies
2.50
0.00
0.00%
TSE:DM
Datametrex AI
0.08
-0.22
-73.33%
TSE:PVT
Pivotree
1.28
0.08
6.67%
Alithya Group Corporate Events
M&A TransactionsBusiness Operations and Strategy
Alithya Group Expands Capabilities with eVerge Acquisition
Positive
Jun 2, 2025
Alithya Group has acquired eVerge Interests, Inc., enhancing its capabilities in Salesforce, Oracle, and AI, and expanding its operations in India. This acquisition is expected to strengthen Alithya’s industry positioning by offering new CRM options and extending its Oracle HCM capabilities across various sectors, providing clients with flexible technology solutions and transformative results.
The most recent analyst rating on (TSE:ALYA) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on Alithya Group stock, see the TSE:ALYA Stock Forecast page.
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.