CAE (CAE) AI Stock Analysis

• Market Cap: C$11.46B
• Dividend Yield: N/A
• Average Volume (3M): 968.35K
• Price to Earnings (P/E): 30.7
• Beta (1Y): 1.12
• Revenue Growth: 9.12%
• EPS Growth: N/A
• Country: CA
• Employees: 13,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.34
• Shares Outstanding: 321,805,270
• 10 Day Avg. Volume: 882,474
• 30 Day Avg. Volume: 968,347
• PEG Ratio: -0.12
• Price to Book (P/B): 2.31
• Price to Sales (P/S): 2.40
• P/FCF Ratio: 24.95
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$49.46
• Price Target Upside: 38.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 1.2
• Revenue Forecast (FY): C$4.90B

• Rating: 58 Neutral
• Price Target: C$39.00 ▲(9.52% Upside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by improving financial performance (strong revenue rebound and profitability recovery, with manageable leverage), but it is held back by weaker cash conversion and only moderate returns. Technical conditions are notably bearish with the stock trading below key moving averages and negative MACD, while valuation is only average given the high P/E and no dividend yield data.

Positive Factors

Revenue and earnings recovery

A ~59% TTM revenue increase and a return to positive earnings show the core training and product businesses regained demand. That sustained top-line and earnings recovery strengthens cash generation potential, supports reinvestment in simulators and centers, and underpins multi‑year contracts.

Manageable leverage and stronger equity

Leverage near 0.66, improving versus prior year, leaves CAE with financial flexibility relative to the industry. Growing equity provides a buffer for cyclical pressures and supports capital allocation for simulator production, maintenance programs, and bidding on long-term defense contracts.

Strategic defense partnership (TKMS)

The TKMS teaming deal positions CAE to supply long-term training and sustainment for a major naval program and broader export bids. This expands structural defense revenue prospects, increases odds of multi-year service contracts, and deepens access to higher‑margin lifecycle work.

Negative Factors

Weak cash conversion

Free cash flow at roughly half of net income indicates working-capital needs or capex investments are absorbing cash. Persistent weaker conversion reduces capacity to deleverage, fund growth projects, or return capital, leaving less margin for error during downturns or delayed bookings.

Margin volatility and past loss

Prior-year net loss and multi-year margin variability show earnings are sensitive to cycle and one-offs. Moderate ROE suggests the capital base is not generating top-tier returns, which can limit reinvestment capacity and make profitability vulnerable if demand softens.

Weakening bookings visibility

A book-to-sales ratio below 1.0 implies new orders are not consistently replacing revenue. For a business reliant on simulator deliveries and long-term training contracts, declining bookings threaten medium-term revenue visibility and could compress future utilization and aftermarket service opportunities.

CAE Business Overview & Revenue Model

Company Description

CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions worldwide. It operates through three segments: Civil Aviation, Defense and Security, and Healthcare. The Civil Aviation segment provides training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as end to end digitally enabled crew management, training operations solutions, and optimization software. The Defense and Security segment offers training and mission support solutions for defense forces across multi-domain operations, OEMs, government agencies and public safety organizations. The Healthcare segment provides integrated education and training solutions, including interventional and imaging simulations, curricula, audiovisual debriefing solutions, center management platforms, and patient simulators for healthcare students and clinical professionals, hospital and university simulation centers, medical and nursing schools, paramedic organizations, defense forces, medical societies, public health agencies and OEMs. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

How the Company Makes Money

CAE makes money primarily by selling and servicing simulation and training solutions across its main markets (civil aviation and defense). Key revenue streams include: (1) Training services revenue from delivering recurring pilot/crew and mission training (often under long-term training agreements) at CAE-operated centers and at customer locations; this can include contracted training capacity, instructor services, and training program management. (2) Product and solution sales from designing and manufacturing full-flight simulators and other training devices, as well as providing associated software, visual systems, and integrated training solutions to airlines, aircraft operators, and defense customers. (3) Aftermarket and lifecycle support revenue from ongoing maintenance, upgrades, spare parts, technical support, and modernization of simulators and training systems throughout their operating lives. (4) Defense contracts revenue from providing training systems integration, simulation-based training, and related services to government and military customers, typically through multi-year contracts that may bundle equipment delivery with support and services. Significant factors that contribute to earnings include the size of the installed base of simulators and long-duration service/training contracts that support recurring revenue, as well as demand for pilot and defense training tied to fleet growth and operational readiness needs. Specific partnership details: null.

CAE Financial Statement Overview

Summary

Fundamentals are improving with sharp TTM revenue growth (~+59%) and a turnaround to positive earnings, plus manageable leverage (debt-to-equity ~0.66). Offsetting this are uneven margin history (including an FY2024 loss), only moderate ROE (~8.9%), sizable absolute debt (~3.25B), and inconsistent cash conversion (FCF ~496M vs operating cash flow ~879M, with FCF about half of net income). KPI trends add mixed visibility: backlog stepped up in mid-2024 but book-to-sales slipped to ~0.9 by end-2025, suggesting bookings may not be consistently replenishing sales.

Income Statement

Profitability and growth have improved meaningfully. TTM (Trailing-Twelve-Months) revenue rose sharply (about +59% vs the latest annual period), with solid profitability (about 28% gross margin and ~9% net margin) and healthy operating earnings margins. Results also show a clear turnaround from the FY2024 loss to positive earnings in FY2025/TTM. Offsetting this, margins have been somewhat volatile over the multi-year period (including a net loss in FY2024), which suggests earnings can still be sensitive to cycle/one-offs.

Balance Sheet

Leverage looks manageable for the industry, with debt-to-equity around ~0.66 in TTM (Trailing-Twelve-Months), improving from ~0.71 in FY2025 and below prior-year levels. Equity has grown versus earlier years, supporting balance-sheet resilience. However, absolute debt remains sizable (~3.25B), and returns on equity are moderate (TTM ~8.9%), indicating the capital base is not yet producing top-tier returns and leaving less cushion if profitability weakens.

Cash Flow

Cash generation is positive, with TTM (Trailing-Twelve-Months) operating cash flow (~879M) and free cash flow (~496M) both solid, and free cash flow improving strongly versus FY2025. That said, cash conversion remains a key watch item: operating cash flow is meaningfully lower than revenue scale, and free cash flow is only about half of net income in TTM (Trailing-Twelve-Months), suggesting working-capital/investment demands can dampen how much accounting profit turns into cash.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	4.86B	4.71B	4.28B	4.01B	3.37B	2.98B
Gross Profit	1.38B	1.30B	1.15B	1.08B	955.50M	765.00M
EBITDA	1.06B	915.70M	785.70M	693.60M	552.30M	446.90M
Net Income	375.90M	405.30M	-304.00M	222.70M	141.70M	-47.20M
Balance Sheet
Total Assets	11.03B	11.21B	9.83B	10.44B	9.58B	8.75B
Cash, Cash Equivalents and Short-Term Investments	463.70M	293.70M	160.10M	217.60M	346.10M	926.10M
Total Debt	3.25B	3.47B	3.07B	3.49B	3.05B	2.35B
Total Liabilities	5.78B	6.24B	5.53B	5.85B	5.49B	5.54B
Stockholders Equity	5.17B	4.89B	4.22B	4.51B	4.01B	3.14B
Cash Flow
Free Cash Flow	496.44M	452.40M	126.30M	-16.90M	55.40M	203.00M
Operating Cash Flow	878.63M	896.50M	566.90M	408.40M	418.20M	366.60M
Investing Cash Flow	-377.90M	-732.30M	-215.40M	-400.70M	-2.24B	-343.40M
Financing Cash Flow	-344.37M	-49.80M	-395.30M	-152.60M	1.26B	-21.30M

CAE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 35.61
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CAE, the sentiment is Negative. The current price of 35.61 is below the 20-day moving average (MA) of 39.17, below the 50-day MA of 42.11, and below the 200-day MA of 39.62, indicating a bearish trend. The MACD of -1.41 indicates Positive momentum. The RSI at 29.85 is Positive, neither overbought nor oversold. The STOCH value of 16.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CAE.

CAE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTG	74 Outperform	C$420.40M	21.66	14.42%	―	15.09%	31.55%
MAL	72 Outperform	C$1.23B	18.44	5.52%	0.93%	8.84%	131.58%
MDA	71 Outperform	C$5.44B	30.51	8.88%	―	57.77%	57.55%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BBD.B	61 Neutral	C$22.97B	18.12	-61.55%	―	6.60%	-1.71%
BBD.A	60 Neutral	C$22.97B	18.12	-61.55%	―	6.60%	-1.71%
CAE	58 Neutral	C$11.46B	30.69	7.50%	―	9.12%	―

CAE Corporate Events

CAE advances transformation as Defense strength offsets Civil softness in Q3

CAE reported third quarter fiscal 2026 revenue of $1.25 billion, up 2% year over year, while earnings per share declined to $0.34 from $0.53 as last year’s results benefited from a significant one-time gain. Adjusted EPS rose 17% to $0.34, net income fell 35% to $108.9 million, and adjusted segment operating income margin held essentially flat at 15.6%, as the company also cut its net debt-to-adjusted EBITDA ratio to 2.30x, ahead of its deleveraging goal.

The company is advancing a broad transformation plan, including divestiture of non-core assets representing about 8% of revenue and optimization of its Civil training network by reducing and relocating roughly 10% of commercial airline simulators, steps expected to temporarily pressure revenue but improve utilization, returns, and resilience over time. A weaker near-term outlook in Civil is largely offset by stronger performance and margins above 10% in Defense, leaving CAE’s full-year expectations broadly unchanged and signaling a gradual rebalancing of its portfolio toward higher-return segments.

The most recent analyst rating on (TSE:CAE) stock is a Hold with a C$47.00 price target. To see the full list of analyst forecasts on CAE stock, see the TSE:CAE Stock Forecast page.

CAE names former ATS finance chief Ryan McLeod as new CFO

CAE Inc. has appointed Ryan McLeod as Chief Financial Officer, effective February 23, 2026, following a comprehensive search process and an interim period under CFO Constantino Malatesta. McLeod, who brings extensive experience from his tenure as CFO of ATS Corporation, where he oversaw significant revenue growth, margin expansion, a U.S. IPO, and numerous strategic acquisitions, will lead CAE’s global finance organization and help drive strategic growth, operational excellence and investor engagement as the company pursues its priorities in civil aviation and defence and security markets.

The most recent analyst rating on (TSE:CAE) stock is a Hold with a C$51.00 price target. To see the full list of analyst forecasts on CAE stock, see the TSE:CAE Stock Forecast page.