CAE (CAE) AI Stock Analysis

• Market Cap: C$13.36B
• Dividend Yield: N/A
• Average Volume (3M): 771.07K
• Price to Earnings (P/E): 30.5
• Beta (1Y): 1.10
• Revenue Growth: 9.12%
• EPS Growth: N/A
• Country: CA
• Employees: 13,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.23
• Shares Outstanding: 321,548,130
• 10 Day Avg. Volume: 1,030,537
• 30 Day Avg. Volume: 771,068
• 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$44.00
• Price Target Upside: 5.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.23
• Revenue Forecast (FY): C$4.98B

• Rating: 72 Outperform
• Price Target: C$42.00 ▲(1.06% Upside)

CAE's overall stock score reflects strong financial performance and a proactive approach to addressing operational challenges through a transformation plan. However, the high valuation and technical indicators suggest caution. The company's strategic initiatives and robust backlog position it for potential long-term growth, but near-term pressures in the Civil segment and valuation concerns weigh on the score.

Positive Factors

Revenue Growth

Sustained revenue growth indicates strong demand across CAE's segments, enhancing its market position and supporting long-term expansion.

Defense Segment Performance

Robust growth in the defense segment highlights CAE's competitive edge and ability to capitalize on increased defense spending globally.

Strategic Partnership

The partnership with Saab enhances CAE's position in the defense sector, providing access to new markets and strengthening its training solutions portfolio.

Negative Factors

Civil Segment Challenges

Declining income in the civil segment suggests operational challenges, potentially impacting profitability and requiring strategic adjustments.

Adjusted EPS Decline

A decline in adjusted EPS reflects profitability pressures, which may affect investor confidence and necessitate cost management improvements.

Increased Finance Expense

Rising finance expenses could strain cash flows and reduce financial flexibility, impacting CAE's ability to invest in growth initiatives.

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 generates revenue primarily through the sale of simulation products and training services. Its revenue model includes three key streams: Civil Aviation, Defense and Security, and Healthcare. In Civil Aviation, CAE earns money through pilot training services, simulation equipment sales, and maintenance contracts. In the Defense sector, the company provides military training solutions, simulation systems, and ongoing support services. The Healthcare division focuses on providing medical simulation and training solutions to hospitals and educational institutions. CAE also engages in long-term partnerships with airlines and military organizations, which contribute to stable, recurring revenue through training contracts and service agreements. Furthermore, the company invests in research and development to innovate its product offerings, ensuring it stays competitive and meets the evolving needs of its customers.

CAE Financial Statement Overview

Summary

CAE demonstrates strong financial health with impressive revenue growth and profitability. The company has effectively managed its leverage, maintaining a stable balance sheet. While cash flow generation is robust, the recent decline in free cash flow growth warrants attention. Continued focus on improving cash flow conversion and managing debt levels will be crucial for sustaining growth and financial stability.

Income Statement

CAE's income statement shows strong performance with a significant revenue growth rate of 55.4% in the TTM period, indicating robust expansion. The company maintains healthy margins with a gross profit margin of 28.1% and an EBIT margin of 15.6%, reflecting operational efficiency. The net profit margin of 8.7% is solid, showcasing profitability. However, the previous year's negative EBIT and net income highlight past challenges.

Balance Sheet

The balance sheet is stable with a manageable debt-to-equity ratio of 0.69, indicating a balanced approach to leveraging. The return on equity of 8.8% in the TTM period is commendable, showing effective use of equity. However, the equity ratio of 45.1% suggests a moderate reliance on debt financing, which could pose risks if not managed carefully.

Cash Flow

Cash flow analysis reveals a slight decline in free cash flow growth by 4.5% in the TTM period, which could be a concern for future liquidity. The operating cash flow to net income ratio of 2.16 indicates strong cash generation relative to net income. However, the free cash flow to net income ratio of 0.49 suggests room for improvement in converting profits into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.83B	4.71B	4.28B	4.01B	3.37B	2.98B
Gross Profit	1.36B	1.30B	1.15B	1.08B	955.50M	765.00M
EBITDA	1.03B	915.70M	785.70M	693.60M	552.30M	446.90M
Net Income	435.60M	405.30M	-304.00M	222.70M	141.70M	-47.20M
Balance Sheet
Total Assets	11.09B	11.21B	9.83B	10.44B	9.58B	8.75B
Cash, Cash Equivalents and Short-Term Investments	178.70M	293.70M	160.10M	217.60M	346.10M	926.10M
Total Debt	3.37B	3.47B	3.07B	3.49B	3.05B	2.35B
Total Liabilities	5.93B	6.24B	5.53B	5.85B	5.49B	5.54B
Stockholders Equity	5.08B	4.89B	4.22B	4.51B	4.01B	3.14B
Cash Flow
Free Cash Flow	461.94M	452.40M	126.30M	-16.90M	55.40M	203.00M
Operating Cash Flow	895.63M	896.50M	566.90M	408.40M	418.20M	366.60M
Investing Cash Flow	-753.90M	-732.30M	-215.40M	-400.70M	-2.24B	-343.40M
Financing Cash Flow	-152.87M	-49.80M	-395.30M	-152.60M	1.26B	-21.30M

CAE Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CAE, the sentiment is Positive. The current price of 41.56 is above the 20-day moving average (MA) of 38.59, above the 50-day MA of 38.46, and above the 200-day MA of 37.22, indicating a bullish trend. The MACD of 0.75 indicates Negative momentum. The RSI at 67.39 is Neutral, neither overbought nor oversold. The STOCH value of 74.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CAE.

CAE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTG	78 Outperform	C$291.76M	20.64	17.40%	―	15.09%	31.55%
CAE	72 Outperform	C$13.36B	30.51	9.00%	―	9.12%	―
MAL	72 Outperform	C$1.04B	23.35	5.64%	0.96%	8.84%	131.58%
MDA	70 Outperform	C$3.26B	28.98	8.88%	―	57.77%	57.55%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BBD.A	63 Neutral	C$23.02B	38.92	―	―	6.60%	-1.71%
BBD.B	62 Neutral	C$23.02B	39.20	―	―	6.60%	-1.71%

CAE Corporate Events

CAE Inc. Reports Strong Q2 2026 Results and Announces Transformation Plan

CAE Inc. reported strong financial results for the second quarter of fiscal 2026, with revenue reaching $1,236.6 million, up from $1,136.6 million the previous year, and earnings per share increasing to $0.23. The company announced a transformation plan aimed at enhancing operational efficiency and long-term value creation, including organizational changes to streamline its structure and improve execution across its civil and defense segments. These changes are expected to position CAE for higher returns and sustainable shareholder value amid robust demand in civil aviation and defense sectors.