CAE (CAE) AI Stock Analysis

• Market Cap: C$14.03B
• Dividend Yield: N/A
• Average Volume (3M): 625.49K
• Price to Earnings (P/E): 32.0
• Beta (1Y): 1.17
• 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: 781,659
• 30 Day Avg. Volume: 625,490
• 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$51.50
• Price Target Upside: 18.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: C$48.00 ▲(9.99% 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

Diversified, recurring revenue streams

CAE's three-segment model and long-term contracts (airlines, militaries, hospitals) create recurring revenue and reduce exposure to any single cyclical market. Simulation tech, global training centers and service contracts provide durable revenue visibility and resilience over months.

Strong free cash flow generation

A 44% FCF increase to $201M shows robust cash conversion and operational cash strength. Durable free cash flow underpins debt reduction, disciplined capex, funding for transformation initiatives and optional growth investments, improving medium-term financial flexibility.

Robust backlog provides revenue visibility

Large, growing backlogs in Civil and Defense translate to contracted revenue runway and better demand visibility. Defense programs in backlog are multi-year and less cyclical, supporting sustained revenue and resource planning over the next several quarters.

Negative Factors

Civil segment profitability and utilization weakness

Declining Civil operating income and lower training center utilization indicate persistent demand softness in commercial training. Reduced utilization pressures margins and fixed-cost absorption, risking slower margin recovery and revenue growth in the Civil franchise over the medium term.

Higher finance costs and leverage considerations

Rising finance expenses reflect higher interest and lease costs, which erode net income and free cash flow. With leverage targets and a meaningful debt level, financing costs constrain capital allocation, forcing prioritization of debt reduction over growth investments in the medium term.

Weaker Civil equipment orders

Lower full‑flight simulator orders signal softer equipment demand and slower backlog replenishment for a high‑margin product line. Prolonged weakness in simulator sales can reduce future high-margin revenue streams and keep facility utilization and margins under pressure.

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 has demonstrated strong financial performance with consistent revenue growth and improved profitability. The balance sheet is stable with a reasonable debt-to-equity ratio, and cash flows are healthy, supporting operational and strategic initiatives. The company is well-positioned for future growth, though continued focus on debt reduction could enhance financial flexibility.

Income Statement

CAE has demonstrated consistent revenue growth with a TTM revenue growth rate of 2.11% and a strong recovery from previous negative net income. The gross profit margin remains stable at around 28%, indicating effective cost management. The net profit margin has improved to 8.75%, reflecting enhanced profitability. EBIT and EBITDA margins are healthy, showing operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is at a manageable level of 0.69, showing a balanced approach to leveraging. Return on equity has improved to 8.79%, indicating better returns for shareholders. The equity ratio stands at 45.8%, suggesting a solid equity base relative to total assets, though there is room for improvement in reducing debt levels.

Cash Flow

Operating cash flow is robust, with a positive free cash flow growth rate of 4.53%. The operating cash flow to net income ratio is 0.39, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 0.49, reflecting good cash conversion efficiency.

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: 43.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 43.64 is below the 20-day moving average (MA) of 45.44, above the 50-day MA of 41.76, and above the 200-day MA of 38.64, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 46.80 is Neutral, neither overbought nor oversold. The STOCH value of 12.76 is Positive, 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$367.28M	25.98	17.40%	―	15.09%	31.55%
CAE	72 Outperform	C$14.03B	32.04	9.00%	―	9.12%	―
MAL	72 Outperform	C$1.19B	26.58	5.64%	0.93%	8.84%	131.58%
MDA	70 Outperform	C$4.85B	43.13	8.88%	―	57.77%	57.55%
BBD.A	64 Neutral	C$23.32B	39.95	―	―	6.60%	-1.71%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BBD.B	62 Neutral	C$23.32B	39.71	―	―	6.60%	-1.71%

CAE Corporate Events

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.

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.

The most recent analyst rating on (TSE:CAE) stock is a Buy with a C$44.00 price target. To see the full list of analyst forecasts on CAE stock, see the TSE:CAE Stock Forecast page.