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Cargojet Inc (TSE:CJT)
TSX:CJT

Cargojet (CJT) AI Stock Analysis

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Cargojet

(TSX:CJT)

Rating:76Outperform
Price Target:
C$107.00
▲(11.20%Upside)
Cargojet's overall stock score is driven by strong technical indicators and positive earnings call sentiment. While financial performance is solid, the increasing leverage and negative free cash flow require attention. The valuation is reasonable, and recent corporate events further strengthen the positive outlook.
Positive Factors
Competitive Position
Cargojet is a well-managed company with a dominant market position and strong, durable competitive advantages in Canada's air cargo network.
Growth Opportunities
Enhanced growth outlook as the company pivots to fund growth CAPEX to capitalize on commercial opportunities in international freight markets.
Operational Strategy
Cargojet has historically had success maintaining a high level of fleet utilization by emphasizing ad-hoc markets when demand for its core services is soft.
Negative Factors
Cost Pressures
Cost inflationary pressures remain elevated, and there is anticipation that this pressure could further escalate when the company faces a renewal of its collective agreement with its pilots.
Demand Forecast
Analyst is lowering the forecast for Cargojet to reflect expectations for a more muted freight demand environment.
Operating Leverage
Operating leverage was limited due to new contract start-up costs and ongoing elevated inflationary pressures in the aviation industry.

Cargojet (CJT) vs. iShares MSCI Canada ETF (EWC)

Cargojet Business Overview & Revenue Model

Company DescriptionCargojet (CJT) is a leading Canadian provider of time-sensitive air cargo services to major cities across North America. The company operates a fleet of all-cargo aircraft, offering overnight air cargo services, charter services, and dedicated aircraft operations. Cargojet's primary sectors include freight transportation and logistics, focusing on expedited delivery solutions for businesses and e-commerce platforms.
How the Company Makes MoneyCargojet makes money through its core air cargo services, which include overnight air freight services, charter services, and dedicated aircraft operations. The company's revenue streams primarily come from contracts with major courier companies, e-commerce businesses, and freight forwarders requiring reliable and timely delivery solutions. Cargojet's strategic partnerships with leading logistics and retail companies contribute significantly to its earnings, as these partnerships ensure a steady demand for its services. Additionally, the company capitalizes on the growing e-commerce sector, which drives increased demand for fast and efficient shipping solutions.

Cargojet Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: 26.82%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Positive
Cargojet's Q1 2025 earnings call presented strong revenue growth and operational performance, particularly in the domestic and charter segments. Despite challenges in the ACMI segment and a decrease in operating cash flow, the company's strategic expansion and high on-time performance contribute to a positive outlook.
Q1-2025 Updates
Positive Updates
Record Q1 Revenue Growth
Cargojet reported an 8.1% increase in total revenue to $249.9 million for Q1 2025, marking a record for the first quarter in the company's history. This growth was driven by strong performance in the domestic and charter segments.
Significant EBITDA Growth
Adjusted EBITDA for Q1 2025 increased by 3.1% to $80.8 million, maintaining a margin of 32.3%.
Strong On-Time Performance
Cargojet achieved an on-time performance rate of 99.1% for Q1 2025, highlighting the company's operational efficiency and customer commitment.
Expansion of Fleet
Cargojet plans to add four 767-300 freighters and return one leased 767-200, resulting in a net addition of three aircraft to the fleet.
Growth in Domestic and Charter Business
Cargojet experienced a 16% growth in domestic revenue, attributed to rising e-commerce demand in Canada. The charter business also saw strong performance with a significant increase in ad hoc charter flights.
Negative Updates
Softness in ACMI Segment
The ACMI segment experienced a decline in revenue due to shorter routes and changes in demand, particularly affecting aircraft operated for DHL.
Decrease in Operating Cash Flow
Operating cash flow for Q1 2025 was $64.8 million, down from $80.3 million in the same period last year, primarily due to non-cash working capital movements.
Company Guidance
During the Cargojet conference call, significant guidance was provided, detailing the company's robust performance and strategic positioning. Cargojet reported that its Q1 2025 revenues more than doubled compared to Q1 2020, and adjusted EBITDA also mirrored this growth. The company achieved an 8.1% revenue increase in Q1 2025 to $249.9 million, marking a record first quarter. The Q1 adjusted EBITDA grew by 3.1% to $80.8 million, maintaining an expected margin of 32.3%. The company sustained a net debt-to-adjusted EBITDA leverage ratio of 2.5x as of March 31, 2025. Cargojet successfully navigated supply chain disruptions and capitalized on new e-commerce opportunities, evidenced by a 16% year-over-year increase in domestic revenue and a doubling of its charter business. The company plans to deploy three additional freighters later this year and continues to manage growth CapEx prudently. Furthermore, Cargojet's Q1 2025 on-time performance was an impressive 99.1%, highlighting its operational efficiency amidst evolving market conditions.

Cargojet Financial Statement Overview

Summary
Cargojet exhibits strong revenue growth and operational efficiency, with good profitability margins. However, the increasing leverage and negative free cash flow pose potential risks. The company should focus on managing debt levels and improving free cash flow to support long-term financial stability.
Income Statement
72
Positive
Cargojet has demonstrated a consistent increase in revenue over recent years, with a notable growth rate from 2023 to 2024 and into the TTM period. Gross Profit Margin and Net Profit Margin are solid, indicating profitability, although there was a decline in gross profit compared to 2022. EBIT and EBITDA margins are stable, reflecting strong operational efficiency. However, the net income has experienced some fluctuations, highlighting a potential area of risk.
Balance Sheet
68
Positive
The company's balance sheet shows a steady increase in stockholders' equity, contributing to a reasonable equity ratio. However, the Debt-to-Equity Ratio has increased, indicating rising leverage which could pose risks if not managed carefully. The Return on Equity is strong, suggesting effective use of equity to generate profits, but the increase in total debt is a concern that may affect future stability.
Cash Flow
65
Positive
Operating cash flow remains robust, but there is negative free cash flow in the TTM period due to high capital expenditures, limiting liquidity. The ratio of operating cash flow to net income is strong, suggesting that net income is well-supported by cash flow. The free cash flow to net income ratio indicates challenges in converting profits into free cash flow, which could impact financial flexibility moving forward.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.02B1.00B877.50M979.90M757.80M668.50M
Gross Profit
233.00M225.80M136.10M247.50M230.90M250.50M
EBIT
143.70M135.20M64.70M170.50M172.10M156.90M
EBITDA
349.90M359.20M329.50M397.80M348.10M95.30M
Net Income Common Stockholders
123.90M108.40M37.30M190.60M167.40M-87.80M
Balance SheetCash, Cash Equivalents and Short-Term Investments
7.40M1.50M31.80M6.10M94.70M3.70M
Total Assets
1.99B1.93B2.04B1.99B1.49B1.22B
Total Debt
840.40M755.10M799.20M707.00M398.60M572.80M
Net Debt
833.00M753.60M767.40M700.90M303.90M569.10M
Total Liabilities
1.21B1.19B1.25B1.15B813.40M1.05B
Stockholders Equity
780.30M737.70M784.50M831.50M676.40M175.20M
Cash FlowFree Cash Flow
-35.90M78.60M-73.90M-328.70M-32.60M146.00M
Operating Cash Flow
313.10M328.60M192.80M282.50M245.00M292.60M
Investing Cash Flow
-341.80M-142.70M-127.50M-615.10M-280.40M-127.70M
Financing Cash Flow
16.20M-216.20M-39.60M244.00M126.40M-162.80M

Cargojet Technical Analysis

Technical Analysis Sentiment
Positive
Last Price96.22
Price Trends
50DMA
85.81
Positive
100DMA
95.08
Positive
200DMA
109.84
Negative
Market Momentum
MACD
2.12
Positive
RSI
61.78
Neutral
STOCH
83.47
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CJT, the sentiment is Positive. The current price of 96.22 is above the 20-day moving average (MA) of 93.61, above the 50-day MA of 85.81, and below the 200-day MA of 109.84, indicating a neutral trend. The MACD of 2.12 indicates Positive momentum. The RSI at 61.78 is Neutral, neither overbought nor oversold. The STOCH value of 83.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CJT.

Cargojet Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSMTL
79
Outperform
C$1.22B11.3510.81%5.74%3.28%-14.21%
TSCJT
76
Outperform
$1.49B12.1815.65%1.40%16.28%239.02%
TSAC
73
Outperform
$6.53B3.94132.28%0.24%-23.10%
TSDXT
72
Outperform
C$556.11M17.6915.03%3.92%-10.24%-23.79%
TSAND
71
Outperform
C$2.08B30.2115.10%0.81%1.72%13.48%
TSEIF
70
Outperform
C$2.92B21.979.16%4.64%5.95%-1.42%
66
Neutral
$4.50B12.295.40%248.66%4.13%-12.33%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CJT
Cargojet
96.53
-18.35
-15.97%
TSE:DXT
Dexterra Group
8.83
3.63
69.81%
TSE:AC
Air Canada
18.62
1.02
5.80%
TSE:EIF
Exchange Income
57.75
14.51
33.56%
TSE:MTL
Mullen Group
13.96
1.47
11.77%
TSE:AND
Andlauer Healthcare Group
53.11
14.34
36.99%

Cargojet Corporate Events

DividendsBusiness Operations and Strategy
Cargojet Announces Quarterly Dividend, Reinforcing Market Position
Positive
Jun 4, 2025

Cargojet Inc. has announced a quarterly cash dividend of $0.35 per common voting share for the period from April 1, 2025, to June 30, 2025, with a record date of June 20, 2025, and payment by July 4, 2025. This move reflects Cargojet’s stable financial position and commitment to returning value to shareholders, potentially enhancing its attractiveness to investors and solidifying its market position in the air cargo industry.

The most recent analyst rating on (TSE:CJT) stock is a Hold with a C$120.00 price target. To see the full list of analyst forecasts on Cargojet stock, see the TSE:CJT Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Cargojet Reports Record First Quarter Revenue and Earnings
Positive
Apr 24, 2025

Cargojet Inc. reported a record first quarter revenue of $249.9 million, marking an 8.1% increase from the previous year. The company achieved a 47.7% rise in net earnings to $48.0 million, driven by strong performance across its diversified service offerings. Despite challenges such as inflation and currency volatility, Cargojet maintained robust margins and achieved a record on-time arrival performance, positioning itself as a key player in the competitive global air cargo industry.

Shareholder Meetings
Cargojet Shareholders Approve All Business Items at Annual Meeting
Positive
Apr 3, 2025

Cargojet Inc. announced the results of its annual shareholders’ meeting, where all business items, including the election of director nominees, were approved by shareholders. This outcome reinforces the company’s stable governance and could positively impact its operational efficiency and stakeholder confidence.

Financial Disclosures
Cargojet Schedules First Quarter 2025 Financial Results Release and Conference Call
Neutral
Mar 19, 2025

Cargojet Inc. announced it will release its first-quarter 2025 financial results on April 23, 2025, after market close. The company will hold a conference call on April 24, 2025, to discuss the results, led by Co-CEOs Jamie B. Porteous and Pauline Dhillon, along with Interim CFO Sanjeev Maini. This announcement underscores Cargojet’s ongoing commitment to transparency and engagement with stakeholders, as it continues to solidify its position in the air cargo industry.

Executive/Board Changes
Cargojet CFO Departure and Interim Appointment
Neutral
Mar 19, 2025

Cargojet Inc. announced the departure of its Chief Financial Officer, Scott Calver, who is leaving to pursue other opportunities. The company has appointed Sanjeev Maini as Interim CFO while they conduct a formal search for a permanent replacement, expected to conclude later this year. This leadership change comes as Cargojet continues to solidify its position as a leader in the air cargo industry, ensuring stability and continuity in its financial operations.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.