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Alithya Group (TSE:ALYA)
TSX:ALYA
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Alithya Group (ALYA) AI Stock Analysis

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TSE:ALYA

Alithya Group

(TSX:ALYA)

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Neutral 59 (OpenAI - 4o)
Rating:59Neutral
Price Target:
C$2.00
▲(11.11% Upside)
Alithya Group's overall stock score reflects strong revenue growth and operational improvements in the U.S. market, but is offset by profitability challenges, high valuation, and increased net debt. Technical indicators suggest potential bearish momentum, and the lack of a dividend yield further impacts attractiveness.
Positive Factors
U.S. Market Growth
Strong growth in the U.S. market indicates successful strategic positioning and effective leveraging of key partnerships, enhancing long-term revenue potential.
Successful Integration of Acquisitions
Effective integration of acquisitions strengthens market position and expands capabilities, supporting sustainable growth and competitive advantage.
High Gross Margin
Improved gross margins reflect efficient operations and a strategic focus on high-value services, enhancing profitability and financial health.
Negative Factors
Canadian Revenue Decline
Declining revenue in Canada highlights challenges in maintaining growth, potentially impacting overall financial performance and market presence.
Increased Net Debt
Rising net debt levels could strain financial flexibility and increase risk, necessitating careful management to ensure long-term stability.
Free Cash Flow Decline
A decline in free cash flow suggests potential issues in cash generation, which could impact the company's ability to fund operations and growth initiatives.

Alithya Group (ALYA) vs. iShares MSCI Canada ETF (EWC)

Alithya Group Business Overview & Revenue Model

Company DescriptionAlithya 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 MoneyAlithya 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 Earnings Call Summary

Earnings Call Date:Aug 13, 2025
(Q1-2026)
|
% Change Since: |
Next Earnings Date:Nov 14, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong growth and performance in the U.S. market, bolstered by successful integration of acquisitions and increased operational efficiency. However, challenges in the Canadian segment, including revenue decline and lower utilization, as well as an increased net debt, balanced the overall sentiment.
Q1-2026 Updates
Positive Updates
U.S. Market Growth
Achieved double-digit profitable growth of 17.3% in the U.S. market, driven primarily by Oracle and Microsoft practices.
Revenue and Adjusted EBITDA Growth
Consolidated revenues increased by 2.7% year-over-year to $124.2 million, and adjusted EBITDA grew by 15.6% to $11.6 million.
Successful Integration of Acquisitions
Integrated eVerge and XRM Vision acquisitions, contributing to growth and new opportunities, with a significant impact on smart shore centers.
High Gross Margin
Gross margin improved to 32.1%, up from 31.9% last year, due to increased efficiencies and a focus on higher-value business mix.
Strong Performance in Healthcare Sector
Completed significant projects for healthcare clients like Virtua Health and Cigna using Oracle solutions, enhancing operational efficiency and financial insights.
Smart Shore Capabilities Expansion
Reached a new high of 13% of employees in smart shore locations, significantly contributing to the company's operational efficiency.
Positive Cash Position
Executed the eVerge acquisition with a 100% cash approach, maintaining a good cash position for future acquisition opportunities.
Negative Updates
Canadian Revenue Decline
Revenues in Canada decreased by 8.5%, primarily due to reduced government contracts and the maturity of a major transformation project.
Lower Utilization and Margins in Canada
Decreased utilization rates and lower tax credits resulted in a drop in gross margin in the Canadian segment.
Book-to-Bill Ratio Challenges
Bookings in the quarter resulted in a book-to-bill ratio of 0.95, indicating slower project conversion compared to previous periods.
Increased Net Debt
Net debt increased by $24.3 million to $118.3 million, with a leverage ratio of 2.4x net debt to trailing 12 months adjusted EBITDA.
Company Guidance
In the recent conference call detailing Alithya's first quarter fiscal 2026 results, the management provided several key financial metrics and strategic insights. The company reported a year-over-year improvement in adjusted EBITDA and gross margin as a percentage of revenue, driven by a focus on high-value services and efficiency gains. Revenue growth was notable, particularly in the U.S. market, with a 17.3% increase in the U.S. operating segment, largely attributed to strong performances in their Oracle and Microsoft practices. The U.S. accounted for a higher proportion of revenue growth compared to Canada, where revenues fell due to strategic exits from lower-margin contracts. The company also highlighted the impacts of recent acquisitions, such as eVerge, which was financed entirely in cash, contributing to new opportunities and enhancing Alithya's smart shore capabilities, now representing 13% of the workforce. Furthermore, the call noted a book-to-bill ratio of 0.95 for the quarter, with bookings at $118.1 million, and emphasized ongoing strategic priorities focused on industry expertise and smart shoring.

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
65
Positive
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
60
Neutral
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
55
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue476.76M473.48M491.13M522.70M437.88M287.64M
Gross Profit148.28M147.01M140.84M151.77M116.15M83.02M
EBITDA35.55M36.00M24.93M7.36M5.80M-809.00K
Net Income4.24M1.29M-16.66M-30.10M-15.55M-17.34M
Balance Sheet
Total Assets445.13M425.98M416.50M464.10M447.72M243.26M
Cash, Cash Equivalents and Short-Term Investments19.08M15.96M8.86M22.58M17.66M6.90M
Total Debt145.01M118.91M128.90M145.71M127.94M70.41M
Total Liabilities261.32M241.42M241.29M277.03M247.97M135.25M
Stockholders Equity183.81M184.56M175.20M187.07M199.75M108.01M
Cash Flow
Free Cash Flow25.88M46.99M14.88M26.30M-4.71M-2.73M
Operating Cash Flow27.56M48.43M15.67M28.88M-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-11.33M31.40M3.42M

Alithya Group Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.80
Price Trends
50DMA
1.80
Positive
100DMA
2.06
Negative
200DMA
1.92
Negative
Market Momentum
MACD
0.01
Positive
RSI
49.33
Neutral
STOCH
30.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ALYA, the sentiment is Negative. The current price of 1.8 is below the 20-day moving average (MA) of 1.90, below the 50-day MA of 1.80, and below the 200-day MA of 1.92, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 49.33 is Neutral, neither overbought nor oversold. The STOCH value of 30.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ALYA.

Alithya 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
C$26.98B16.0017.56%0.49%7.13%5.02%
$37.18B12.37-10.20%1.83%8.50%-7.62%
$191.90M46.272.20%-0.76%
C$39.34M-4.98%-11.75%74.20%
$3.13M-6.7310.33%-4.00%
C$3.01M-49.91%-39.84%92.78%
C$104.58M-10.74%-63.58%-112.17%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ALYA
Alithya Group
1.80
-0.05
-2.70%
TSE:GIB.A
CGI
122.94
-33.00
-21.16%
TSE:KNR
Kontrol Technologies
2.50
0.00
0.00%
TSE:DM
Datametrex AI
0.09
-0.21
-70.00%
TSE:NERD
Nerds On Site
0.04
-0.02
-41.67%
TSE:PVT
Pivotree
1.69
0.58
52.25%

Alithya Group Corporate Events

Alithya Group Announces Successful Shareholder Meeting Results
Sep 11, 2025

On September 10, 2025, Alithya Group Inc. held its Annual General Meeting of Shareholders virtually, where 68.58% of the total voting shares were represented. Shareholders voted in favor of all proposed items, including the election of eight directors and the appointment of KPMG LLP as the auditor for the fiscal year ending March 31, 2026. This outcome reflects strong shareholder support and is expected to positively impact Alithya’s governance and operational continuity.

The most recent analyst rating on (TSE:ALYA) stock is a Hold with a C$2.00 price target. To see the full list of analyst forecasts on Alithya Group stock, see the TSE:ALYA Stock Forecast page.

Alithya Group Launches Share Buyback Program to Enhance Shareholder Value
Sep 10, 2025

On September 10, 2025, Alithya Group Inc. announced that the Toronto Stock Exchange has accepted its intention to implement a normal course issuer bid (NCIB) program. This share buyback initiative is part of Alithya’s strategy to enhance shareholder value, optimize capital deployment, and support growth and debt reduction. The program allows the company to repurchase up to 5,939,183 Class A Shares, representing 10% of its public float, with purchases commencing on September 12, 2025. The move reflects Alithya’s confidence in its intrinsic value and future growth prospects, aiming to create sustainable, long-term value for its shareholders.

The most recent analyst rating on (TSE:ALYA) stock is a Hold with a C$2.00 price target. To see the full list of analyst forecasts on Alithya Group stock, see the TSE:ALYA Stock Forecast page.

Alithya Group’s Earnings Call Highlights U.S. Growth Amid Canadian Challenges
Sep 1, 2025

The recent earnings call for Alithya Group, Inc. Class A painted a mixed picture of the company’s performance. On the positive side, there was strong growth and performance in the U.S. market, driven by successful integration of acquisitions and increased operational efficiency. However, challenges in the Canadian segment, such as revenue decline and lower utilization, as well as an increased net debt, tempered the overall sentiment.

Alithya Group Inc. Reports Q2 2025 Financial Results
Aug 14, 2025

Alithya Group Inc. is a professional services firm specializing in IT services and solutions, focusing on strategic consulting, enterprise transformation, and business enablement. The company’s Class A subordinate voting shares are traded on the Toronto Stock Exchange under the symbol ‘ALYA’.

Alithya Group Reports Q2 2025 Financial Results with Increased Revenue but Continued Losses
Aug 13, 2025

Alithya Group Inc. has released its interim condensed consolidated financial statements for the three months ended June 30, 2025. The company reported revenues of CAD 124.2 million, a slight increase from the previous year. However, the company experienced a net loss before income taxes of CAD 2.9 million, compared to a loss of CAD 2.0 million in the same period last year. This financial performance highlights ongoing challenges in managing operating expenses and financial costs, impacting the company’s profitability.

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.

Alithya Group Reports Strong Q1 2026 Financial Results
Aug 13, 2025

Alithya Group Inc. reported a positive financial performance for the first quarter of fiscal 2026, ending June 30, 2025, with revenues increasing by 2.7% to $124.2 million compared to the same period last year. The company achieved a net earnings turnaround, reporting $0.2 million compared to a net loss of $2.8 million in the previous year. The acquisition of eVerge Interests, Inc. contributed to the growth in U.S. revenues, which saw a 17.3% increase. Despite a decrease in Canadian revenues, the overall gross margin improved to 32.1%. The company also reduced its selling, general, and administrative expenses by 3.4%, enhancing its profitability.

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.

Alithya Group Announces Virtual AGM Amid Strong Financial Performance
Aug 6, 2025

Alithya Group Inc. announced its 2025 Annual General Meeting of Shareholders to be held virtually on September 10, 2025. Despite a challenging fiscal year ending March 31, 2025, the company achieved significant financial results, including a record gross margin of 36.8% in the fourth quarter, driven by a focus on higher-value services and strategic acquisitions. The company remains committed to operational efficiency and strategic growth, welcoming Pierre Blanchette as the new CFO. The meeting will review financial positions, business operations, and shareholder value, with a focus on strong governance and addressing global geopolitical developments.

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.Date of analysis: Oct 28, 2025