Alithya Group (ALYA) AI Stock Analysis

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Alithya Group

(TSX:ALYA)

Rating:55Neutral

Price Target:

C$2.00

▲(11.73% Upside)

Alithya Group's overall stock score is driven by strong revenue growth and operational improvements in the U.S. market, as highlighted in the earnings call. However, the stock's bearish technical indicators and high P/E ratio suggest caution. The company's financial performance shows potential but is hindered by low profitability and cash flow challenges.

Positive Factors

Earnings Per Share

Alithya reported fiscal Q1/26 adjusted EPS of C$0.07, which exceeded the forecast of C$0.06 and was in line with the FactSet consensus forecast.

Revenue Performance

Alithya Group, Inc. reported fiscal Q1/26 total revenue of C$124.2 million, which was 1% higher than the forecast and the FactSet consensus forecast.

Negative Factors

Bookings Decline

During the quarter, Alithya generated bookings of C$100.1 million, down 25% YOY and down 28% sequentially on extended sales cycles.

Price Target Reduction

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

$178.84M

Dividend YieldN/A

Average Volume (3M)76.74K

Price to Earnings (P/E)43.4

Beta (1Y)1.00

Revenue Growth-0.76%

EPS GrowthN/A

CountryCA

Employees3,000

SectorTechnology

Sector Strength85

IndustryInformation Technology Services

Share Statistics

EPS (TTM)0.00

Shares Outstanding92,030,850

10 Day Avg. Volume136,335

30 Day Avg. Volume76,741

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap0.00

Enterprise Value/Revenue0.00

Enterprise Value/Gross Profit0.00

Enterprise Value/Ebitda0.00

Forecast

1Y Price Target

$3.00

Price Target Upside67.68% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

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 13, 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 has shown signs of financial recovery with improvements in profitability and cash flow metrics. However, revenue growth inconsistency and historical profitability challenges highlight potential risks. Efforts to enhance operational efficiency and cash generation appear promising for future financial health.

Income Statement

Neutral

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

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

Negative

Last Price1.79

Price Trends

50DMA

2.32

Negative

100DMA

2.04

Negative

200DMA

1.90

Negative

Market Momentum

MACD

-0.14

Positive

RSI

27.88

Positive

STOCH

6.44

Positive

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 1.79 is below the 20-day moving average (MA) of 2.19, below the 50-day MA of 2.32, and below the 200-day MA of 1.90, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 27.88 is Positive, neither overbought nor oversold. The STOCH value of 6.44 is Positive, 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
Sector *	61 Neutral	$35.62B	8.22	-10.94%	1.88%	8.86%	-10.36%
KNR	56 Neutral	C$104.58M	13.71	-10.74%	―	-63.58%	-112.17%
ALYA	55 Neutral	$178.84M	43.37	2.20%	―	-0.76%	―
GIB	―	$21.00B	17.47	17.56%	0.46%	―	―
DM	46 Neutral	C$2.91M	―	-110.58%	―	-33.49%	90.25%
NOSUF	―	$1.62M	―		―	―	―
PVT	54 Neutral	C$38.81M	―	-4.98%	―	-11.75%	74.20%

* Technology Sector Average

Performance Comparison

TSE:ALYA

Alithya Group

1.79

-0.05

-2.72%

GIB

CGI

96.48

-14.50

-13.07%

TSE:KNR

Kontrol Technologies

2.50

0.00

0.00%

TSE:DM

Datametrex AI

0.08

-0.22

-73.33%

NOSUF

Nerds On Site

0.01

-0.02

-66.67%

TSE:PVT

Pivotree

1.51

0.52

52.53%

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.Date of analysis: Aug 19, 2025