CAE Inc (TSE:CAE)
NYSE:CAE
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CAE
(NYSE:CAE)
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Rating:58Neutral
Price Target:
C$33.00
▼(-10.37% Downside)
Action:Reiterated
Date:05/26/26
The score is driven primarily by decent underlying financial momentum (revenue growth and improved cash generation) but constrained by profitability volatility and leverage. Technicals are notably weak with the stock trading below major moving averages and negative MACD. Valuation is also a headwind due to a high P/E, while the earnings call was mixed: strong cash flow and a credible transformation plan, but FY2027 guidance points to near-term margin pressure and execution risk.
Positive Factors
Recurring training & aftermarket revenue
CAE’s business model relies on long-term, utilization-based training contracts and an installed base of simulators that generate recurring service, maintenance and upgrade revenue. This durable annuity-like stream supports cash generation, revenue visibility and higher-margin aftermarket economics over multi-year cycles.
Negative Factors
Material leverage
CAE carries meaningful net leverage relative to earnings, which constrains financial flexibility and increases vulnerability to earnings volatility or higher rates. Until sustained cash flow and profitability improvements reduce leverage, balance-sheet risk could limit capital allocation choices and strategic optionality.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring training & aftermarket revenue
CAE’s business model relies on long-term, utilization-based training contracts and an installed base of simulators that generate recurring service, maintenance and upgrade revenue. This durable annuity-like stream supports cash generation, revenue visibility and higher-margin aftermarket economics over multi-year cycles.
Read all positive factors
CAE (CAE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$11.44B
Dividend YieldN/A
Average Volume (3M)1.09M
Price to Earnings (P/E)36.5
Beta (1Y)1.07
Revenue Growth4.38%
EPS Growth-23.21%
CountryCA
Employees13,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.98
Shares Outstanding321,805,270
10 Day Avg. Volume1,273,099
30 Day Avg. Volume1,090,935
Financial Highlights & Ratios
PEG Ratio-1.63
Price to Book (P/B)2.19
Price to Sales (P/S)2.37
P/FCF Ratio19.92
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$44.21Price Target Upside20.07% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.24
Revenue Forecast (FY)C$4.94B
CAE Business Overview & Revenue Model
Company Description
Operating globally, CAE Inc. and its subsidiaries specialize in delivering advanced simulation-based training and vital operational support. Its business is organized into three core segments: Civil Aviation, Defense and Security, and Healthcare. ...
How the Company Makes Money
CAE makes money primarily by selling training services and simulation-related products and support to airlines, business aviation operators, aircraft manufacturers, and defense/government customers. A major revenue stream comes from civil aviation...
CAE Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Neutral
The call balanced clear positives (notably strong Defense performance, a meaningful improvement in free cash flow, an actionable transformation plan with identified savings, and product/customer milestones) against significant near-term headwinds (Civil softness, Middle East disruptions, lower backlog, one-time transformation and network rationalization costs, and paused government R&D support). Management emphasizes execution, capital discipline and long-term targets, but FY2027 is expected to be a transitional year with lower margins and execution risk before benefits materialize toward FY2028–FY2030.Positive Updates
Consolidated Revenue Growth
Consolidated revenue for FY2026 was $4.9 billion, up 4% year-over-year; Q4 revenue was $1.3 billion, up 4% year-over-year.
Negative Updates
Decline in Adjusted Segment Operating Income
Q4 adjusted segment operating income was $211.8 million versus $258.8 million a year earlier (down ~18.2% YoY). Full-year adjusted segment operating income was $710.7 million, down 3% YoY.
Read all updates
Q4-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Consolidated revenue for FY2026 was $4.9 billion, up 4% year-over-year; Q4 revenue was $1.3 billion, up 4% year-over-year.
Read all positive updates
Company Guidance
CAE guided that fiscal 2027 will be a reset year with consolidated revenue expected to grow low single‑digits (Civil flat to slightly down, Defense mid‑single‑digit growth), adjusted segment operating income margin of 14.6%–15.1% (under the updated definition), adjusted EPS of $1.21–$1.28 and free cash flow conversion of 85%–95% (part of a plan to deliver 100% cumulative cash conversion over the four‑year period to FY2030). Management reaffirmed FY2030 targets of mid‑single‑digit organic revenue growth, $950M–$1.0B of adjusted segment operating income and ~100% cumulative cash conversion, driven by $125M–$150M of run‑rate structural cost savings by FY2030; the transformation carries one‑time costs of $200M–$250M (≈$100M non‑cash), of which $84M was incurred in FY2026 ($59M non‑cash). Additional context/metrics included FY2026 results (consolidated revenue $4.9B, +4%; Q4 revenue $1.3B, +4%; FY adj. segment operating income $710.7M, −3%; Q4 adj. SOI $211.8M; FY adjusted EPS $1.20; Q4 adjusted EPS $0.42; FY2026 free cash flow $473.8M, ~123% conversion), a net debt balance of $2.7B (net debt/adjusted EBITDA 2.29x), divestiture of ~8% of revenue (Flightscape ~4%–5%), a planned ~10% reduction in commercial full‑flight simulators (already retired 5 devices, closed 1 center; expect 8–10 more retirements, >300,000 sq ft removed and 4–6 center closures), and that total CapEx is expected to be approximately flat year‑over‑year in FY2027.CAE Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
66
Positive
Cash Flow
70
Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.91B | 4.71B | 4.28B | 4.01B | 3.37B |
| Gross Profit | 1.34B | 1.30B | 1.15B | 1.08B | 955.50M |
| EBITDA | 1.07B | 915.70M | 785.70M | 693.60M | 552.30M |
| Net Income | 313.10M | 405.30M | -304.00M | 222.70M | 141.70M |
Balance Sheet | |||||
| Total Assets | 11.15B | 11.21B | 9.83B | 10.44B | 9.58B |
| Cash, Cash Equivalents and Short-Term Investments | 552.40M | 293.70M | 160.10M | 217.60M | 346.10M |
| Total Debt | 3.25B | 3.47B | 3.07B | 3.49B | 3.05B |
| Total Liabilities | 5.76B | 6.24B | 5.53B | 5.85B | 5.49B |
| Stockholders Equity | 5.30B | 4.89B | 4.22B | 4.51B | 4.01B |
Cash Flow | |||||
| Free Cash Flow | 583.70M | 452.40M | 126.30M | -16.90M | 55.40M |
| Operating Cash Flow | 871.50M | 896.50M | 566.90M | 408.40M | 418.20M |
| Investing Cash Flow | -398.90M | -732.30M | -215.40M | -400.70M | -2.24B |
| Financing Cash Flow | -212.70M | -49.80M | -395.30M | -152.60M | 1.26B |
CAE Technical Analysis
Positive
36.82
Price Trends
35.88
Negative
38.72
Negative
38.92
Negative
Market Momentum
-0.24
Negative
50.73
Neutral
78.94
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 36.82 is above the 20-day moving average (MA) of 35.23, above the 50-day MA of 35.88, and below the 200-day MA of 38.92, indicating a neutral trend. The MACD of -0.24 indicates Negative momentum. The RSI at 50.73 is Neutral, neither overbought nor oversold. The STOCH value of 78.94 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | C$562.63M | 42.01 | 14.24% | ― | 15.55% | -0.75% | |
69 Neutral | C$7.42B | 65.29 | 7.24% | ― | 42.91% | 2.84% | |
67 Neutral | C$30.09B | 23.19 | -75.01% | ― | 7.74% | 247.98% | |
66 Neutral | C$1.82B | 40.46 | 5.48% | 0.93% | 10.42% | 12.81% | |
65 Neutral | C$30.09B | 23.19 | -75.01% | ― | 7.74% | 247.98% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | C$11.44B | 36.53 | 6.12% | ― | 4.38% | -23.21% |
* Industrials Sector Average
TSE:CAE
CAE
35.54
-1.77
-4.74%
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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.