Alithya Group (ALYA) AI Stock Analysis

• Market Cap: $214.96M
• Dividend Yield: N/A
• Average Volume (3M): 112.23K
• Price to Earnings (P/E): 51.8
• Beta (1Y): 0.75
• Revenue Growth: -0.76%
• EPS Growth: N/A
• Country: CA
• Employees: 3,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.00
• Shares Outstanding: 92,653,275
• 10 Day Avg. Volume: 112,326
• 30 Day Avg. Volume: 112,235
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $3.00
• Price Target Upside: 49.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 63 Neutral
• Price Target: C$2.50 ▲(24.38% Upside)

Alithya Group's stock score is primarily driven by strong financial performance in terms of revenue growth and operational efficiency improvements, particularly in the U.S. market. However, high valuation metrics and challenges in the Canadian segment, along with increased net debt, weigh on the overall score. Technical indicators suggest caution due to potential overbought conditions.

Positive Factors

U.S. Market Growth

Strong growth in the U.S. market highlights Alithya's effective strategy and execution, particularly in leveraging partnerships with Oracle and Microsoft, which can drive sustained revenue expansion and market share gains.

Successful Integration of Acquisitions

Successful acquisition integration enhances Alithya's capabilities and market reach, providing a competitive edge and supporting long-term growth through expanded service offerings and increased operational efficiency.

Smart Shore Capabilities Expansion

Expanding smart shore capabilities improves cost efficiency and service delivery, strengthening Alithya's competitive position and enabling scalable growth in a cost-effective manner.

Negative Factors

Canadian Revenue Decline

Declining revenues in Canada signal challenges in maintaining market presence and contract renewals, which could hinder overall growth and profitability if not addressed.

Increased Net Debt

Rising net debt levels may constrain financial flexibility and increase risk, potentially impacting Alithya's ability to invest in growth opportunities or weather economic downturns.

Lower Utilization and Margins in Canada

Lower utilization and margins in Canada reflect operational inefficiencies, which could pressure profitability and necessitate strategic adjustments to improve resource allocation and cost management.

Alithya Group Business Overview & Revenue Model

Company Description

Alithya Group Inc. provides strategy and digital technology services in Canada, the United States, and Europe. The company's business strategy services include strategic consulting, digital transformation, organizational performance, and enterprise architecture services. It also provides application services, such as digital applications DevOps, legacy systems modernization, control and software engineering, cloud infrastructure, quality assurance, and automated testing; enterprise solutions comprising enterprise resource planning, corporate performance management, customer relationship management, and human capital management; and data and analytics solutions, including business intelligence, data management, artificial intelligence (AI), and machine learning, as well as internet of things. In addition, the company provides AI-FI, an integrated artificial intelligence and fidelity solution; Alithya GoTest, solution allows clients to test the functionality of applications on various platforms; CASSI analytics for online weekly maintenance, outage management, petrochemical turnarounds, and maintenance and reliability; and SIDER, a secure solution that facilitates distribution of medical results to healthcare sectors and to centralized electronic medical records. It serves financial services, energy, manufacturing, telecommunications, transportation and logistics, professional services, healthcare, and government sectors. Alithya Group Inc. was founded in 1992 and is headquartered in Montreal, Canada.

How the Company Makes Money

Alithya Group generates revenue primarily through its consulting and technology services, which include digital strategy, software development, and IT services. The company operates on a project-based revenue model, where clients pay for specific consulting engagements or ongoing service contracts. Key revenue streams include consulting fees from project work, maintenance and support services, and recurring revenue from managed services. Additionally, Alithya has established significant partnerships with leading technology providers, enhancing its service offerings and expanding its client base, thereby contributing to its overall earnings.

Alithya Group Financial Statement Overview

Summary

Alithya Group shows strong revenue growth and a healthy gross profit margin, but struggles with profitability and cash flow generation. The balance sheet is stable with moderate leverage, but returns on equity are low. The company should focus on improving operational efficiency and cash flow management to enhance overall financial health.

Income Statement

Alithya Group shows a positive trajectory in revenue growth with a TTM growth rate of 69.3%, indicating strong top-line expansion. Gross profit margin is healthy at 31.1%, reflecting efficient cost management. However, net profit margin remains low at 0.89%, suggesting challenges in translating revenue growth into bottom-line profitability. EBIT and EBITDA margins are modest, indicating room for improvement in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio of 0.79 indicates moderate leverage, which is manageable but should be monitored. Return on equity is low at 2.36%, suggesting limited returns for shareholders. The equity ratio stands at 41.3%, reflecting a stable capital structure with a reasonable level of equity financing.

Cash Flow

Free cash flow has declined significantly by 42.2% in the TTM period, raising concerns about cash generation capabilities. The operating cash flow to net income ratio is 0.25, indicating that cash flows are not fully supporting net income. However, the free cash flow to net income ratio is strong at 0.94, suggesting that the company is generating cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	476.76M	473.48M	491.13M	522.70M	437.88M	287.64M
Gross Profit	148.28M	147.01M	140.84M	151.77M	116.15M	83.02M
EBITDA	35.55M	36.00M	24.93M	7.36M	5.80M	-809.00K
Net Income	4.24M	1.29M	-16.66M	-30.10M	-15.55M	-17.34M
Balance Sheet
Total Assets	445.13M	425.98M	416.50M	464.10M	447.72M	243.26M
Cash, Cash Equivalents and Short-Term Investments	19.08M	15.96M	8.86M	22.58M	17.66M	6.90M
Total Debt	145.01M	118.91M	128.90M	145.71M	127.94M	70.41M
Total Liabilities	261.32M	241.42M	241.29M	277.03M	247.97M	135.25M
Stockholders Equity	183.81M	184.56M	175.20M	187.07M	199.75M	108.01M
Cash Flow
Free Cash Flow	25.88M	46.99M	14.88M	26.30M	-4.71M	-2.73M
Operating Cash Flow	27.56M	48.43M	15.67M	28.88M	-1.63M	-456.00K
Investing Cash Flow	-17.55M	-7.82M	-787.00K	-13.73M	-18.94M	-4.57M
Financing Cash Flow	-1.76M	-34.15M	-28.58M	-11.33M	31.40M	3.42M

Alithya Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 2.01 is above the 20-day moving average (MA) of 1.73, above the 50-day MA of 1.94, and above the 200-day MA of 1.90, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 70.41 is Negative, neither overbought nor oversold. The STOCH value of 79.68 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GIB.A	71 Outperform	$28.05B	16.63	17.56%	0.47%	7.13%	5.02%
ALYA	63 Neutral	$214.96M	51.81	2.20%	―	-0.76%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NERD	49 Neutral	$2.68M	―	30.86%	―	10.33%	-4.00%
KNR	45 Neutral	C$104.58M	13.71	-10.74%	―	-63.58%	-112.17%
PVT	43 Neutral	C$36.70M	―	-4.98%	―	-11.75%	74.20%
DM	41 Neutral	C$2.91M	―	-49.91%	―	-39.84%	92.78%

Alithya Group Corporate Events

Alithya Group Expands Capabilities with eVerge Acquisition

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.