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NFI Group Inc (TSE:NFI)
TSX:NFI
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NFI Group Inc
(TSX:NFI)59Neutral
Positive Factors
Financial Performance
Financial results to-date do not yet reflect the higher-margin contracts in NFI's backlog that would have been secured amidst the favourable landscape of strong federal funding and some competitor exits.
Negative Factors
Market Competition
A European bus manufacturer Solaris is working on entering the North American transit market, targeting commercial availability in 2026.
Supply Chain Issues
NFI is experiencing issues with a seating supplier and this may have worsened since Q2/24.
NFI Group Inc (NFI) vs. S&P 500 (SPY)
Market Cap
C$1.38B
Dividend YieldN/A
Average Volume (3M)403.83K
Price to Earnings (P/E)―
Beta (1Y)0.59
Revenue Growth20.56%
EPS Growth94.32%
CountryCA
Employees8,500
SectorConsumer Cyclical
Sector Strength53
IndustryVehicles
Share Statistics
EPS (TTM)-0.28
Shares Outstanding119,043,816
10 Day Avg. Volume383,863
30 Day Avg. Volume403,835
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.31
Price to Cash Flow (P/CF)-5.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$18.50Price Target Upside65.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
NFI Group Inc Business Overview & Revenue Model
Company DescriptionNFI Group Inc. (NFI) is a leading independent global bus manufacturer providing a comprehensive suite of mass transportation solutions under various brands. The company operates in the design, manufacture, and service of buses and coaches for public transportation, including electric, hybrid, and clean diesel vehicles. NFI serves a diverse range of customers, including transit authorities, municipalities, and private operators across the United States, Canada, and various international markets.
How the Company Makes MoneyNFI Group Inc. generates revenue primarily through the sale of its buses and coaches, which are marketed under well-known brands like New Flyer, MCI, Alexander Dennis, Plaxton, ARBOC, and NFI Parts. The company earns income from new vehicle sales, aftermarket parts and services, and support for maintenance and refurbishment of existing fleets. NFI also benefits from long-term contracts with transit authorities and private operators, which provide a consistent revenue stream. Additionally, the company's focus on electric and low-emission vehicles taps into the growing demand for sustainable transportation solutions, further enhancing its revenue potential. Key partnerships with governments and transit agencies, as well as its strategic positioning in the global shift towards cleaner energy, play a significant role in NFI's earning strategy.
NFI Group Inc Financial Statement Overview
Summary
NFI Group Inc is recovering with a positive revenue growth trajectory and improving profitability margins. However, challenges remain with negative net income and high leverage, posing risks to financial stability. The company needs to focus on enhancing net profitability and reducing debt to strengthen its financial position.Income Statement
The company has shown a notable recovery in its revenue, with a significant growth rate from the previous year. The Gross Profit Margin and EBITDA Margin are positive, indicating improved profitability. However, the Net Profit Margin is negative, reflecting ongoing challenges in achieving net profitability. The EBIT Margin has improved but is still relatively low compared to industry standards.65
Positive
Balance Sheet
The Balance Sheet reflects moderate leverage with a debt-to-equity ratio that is higher than ideal, indicating potential financial risk. The Return on Equity (ROE) is also negative, suggesting inefficiencies in generating profit from shareholders' equity. The Equity Ratio is reasonable, but overall financial stability could be improved.60
Neutral
Cash Flow
The company has shown an improvement in Free Cash Flow, but it remains relatively low. The Operating Cash Flow to Net Income Ratio is positive, indicating some level of cash flow stability, but the Free Cash Flow to Net Income Ratio is weak, highlighting challenges in converting revenues into free cash.55
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.08B | 2.69B | 2.05B | 2.34B | 2.42B | 2.89B | Gross Profit |
| 344.12M | 220.76M | 49.13M | 235.59M | 199.25M | 413.48M | EBIT |
| 98.08M | -21.25M | -190.92M | 30.43M | -32.05M | 173.06M | EBITDA |
| 155.23M | 47.69M | -144.23M | 127.58M | 20.88M | 257.25M | Net Income Common Stockholders |
| -24.19M | -136.16M | -277.76M | -14.48M | -157.74M | 57.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 49.62M | 49.62M | 49.99M | 77.32M | 55.77M | 28.23M | Total Assets |
| 2.70B | 2.70B | 2.59B | 2.60B | 2.76B | 2.95B | Total Debt |
| 1.14B | 1.14B | 1.24B | 955.85M | 1.28B | 1.22B | Net Debt |
| 1.09B | 1.09B | 1.19B | 878.54M | 1.22B | 1.19B | Total Liabilities |
| 2.00B | 2.00B | 2.01B | 1.73B | 2.14B | 2.13B | Stockholders Equity |
| 702.91M | 702.91M | 577.15M | 871.77M | 620.14M | 817.20M |
| Cash Flow | Free Cash Flow | ||||
| 7.91M | -100.80M | -273.43M | 78.97M | 40.33M | 60.99M | Operating Cash Flow |
| 52.98M | -63.81M | -241.85M | 115.23M | 66.06M | 98.61M | Investing Cash Flow |
| -43.63M | -53.34M | -24.53M | -30.79M | -38.48M | -379.29M | Financing Cash Flow |
| -20.23M | 117.84M | 238.28M | -59.99M | -37.00K | 298.01M |
NFI Group Inc Technical Analysis
Negative
11.16
Price Trends
12.54
Negative
13.99
Negative
15.62
Negative
Market Momentum
-0.28
Negative
42.18
Neutral
35.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NFI, the sentiment is Negative. The current price of 11.16 is above the 20-day moving average (MA) of 11.12, below the 50-day MA of 12.54, and below the 200-day MA of 15.62, indicating a neutral trend. The MACD of -0.28 indicates Negative momentum. The RSI at 42.18 is Neutral, neither overbought nor oversold. The STOCH value of 35.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:NFI.
NFI Group Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$32.22B | 45.69 | 8.24% | 0.58% | 11.98% | 22.53% | |
74 Outperform | C$11.05B | ― | -4.95% | ― | 1.44% | -183.14% | |
67 Neutral | $1.43B | 18.88 | 14.70% | ― | 4.64% | 41.68% | |
66 Neutral | C$1.15B | 10.30 | 11.04% | 5.91% | -0.27% | -15.99% | |
65 Neutral | $3.97B | 21.06 | 36.67% | 1.60% | -20.75% | -78.02% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
59 Neutral | C$1.38B | ― | -3.46% | ― | 20.56% | 94.32% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:NFI
NFI Group Inc
11.16
-0.15
-1.33%
TSE:CAE
CAE Inc.
34.56
8.70
33.64%
TSE:DOO
BRP
54.39
-31.92
-36.98%
TSE:GOOS
Canada Goose Holdings
13.97
-3.57
-20.35%
TSE:MTL
Mullen Group Ltd.
12.96
-0.97
-6.96%
TSE:WSP
WSP Global
246.90
26.37
11.96%
NFI Group Inc Earnings Call Summary
Earnings Call Date: Nov 6, 2024 | % Change Since: -32.73% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects significant improvements in financial metrics and a strong demand environment, with challenges related to supply chain disruptions. The long-term outlook remains positive, but short-term issues with suppliers have impacted current operations.Highlights
Significant Year-over-Year Improvement
A 375% increase in quarterly adjusted EBITDA, leading to a $161 million improvement on an LTM basis. Gross margin improved to 12.2%, the highest since Q1 2021.
Record Backlog and Demand
New orders of 1,050 equivalent units in the quarter, up 8.2% year-over-year, with a $12 billion backlog expected to grow.
Strong Aftermarket Segment
Aftermarket segment delivered $153 million in revenue and $34 million of adjusted EBITDA, up 7% and 8% year-over-year, respectively.
Improved Leverage and Liquidity
Significant decline in leverage ratio from over 14.1x in 2023 to 5.19x in 2024. Proactive temporary waiver obtained to access additional $50 million under secured facilities.
Increased Average Selling Prices
Year-over-year, the average selling price of heavy-duty buses in backlog was up by 17% and up by 62% since 2021. Coaches were up 14% and 27% over the same period.
Lowlights
Seat Supply Disruption
Disruption from a significant North American seat supplier led to a loss of approximately 79 EUs of planned third-quarter deliveries, impacting production and working capital.
Inventory and Production Challenges
Inventory growth and lower production rates due to seat supply issues and ramp-up inefficiencies in zero-emission bus production.
Net Loss
Net loss for the period was $15 million, a 62% improvement year-over-year but still indicating financial challenges.
Uncertainty in 2024 Guidance
Revised 2024 financial guidance reflects uncertainty due to ongoing seat supply issues, with adjusted EBITDA guidance reduced.
Company Guidance
During the NFI Group's Q3 2024 earnings call, the executives provided guidance reflecting significant year-over-year improvements across key financial metrics. The company reported a 375% increase in quarterly adjusted EBITDA and a $161 million improvement on an LTM basis. Gross margin improved to 12.2%, marking the highest level since Q1 2021. The company secured new orders for 1,050 equivalent units, up 8.2% from the previous year, contributing to a record backlog of USD 12 billion, primarily driven by the North American public transit sector. The trailing 12-month book-to-bill ratio was strong at 115%, and the option backlog conversion rate reached 70%. Despite a seat supply disruption impacting approximately 79 equivalent units, NFI maintained a positive outlook, adjusting its 2024 guidance to an adjusted EBITDA range of $210 million to $240 million and projecting over $350 million in 2025. Additionally, aftermarket revenue rose to $153 million, with adjusted EBITDA up 8% year-over-year, reflecting steady demand and improved financial performance across the board.NFI Group Inc Corporate Events
Business Operations and Strategy
NFI’s MCI Secures Major Contract with Metrolinx
Positive
Jan 21, 2025
NFI Group Inc.’s subsidiary, Motor Coach Industries (MCI), has secured a major five-year contract with Metrolinx, a key transportation agency in Ontario. The contract, which includes an initial order for 80 commuter coaches, reinforces NFI’s strong relationship with Metrolinx and highlights the company’s significant role in supporting regional transit infrastructure.
NFI Group Strengthens Board to Drive Growth and Leadership
Jan 6, 2025
NFI Group Inc. has announced strategic enhancements to its Board of Directors with the appointment of Chan Galbato as Board Chair, alongside new directors Aziz Aghili and Maryse Saint-Laurent. These appointments aim to strengthen the company’s operational expertise and position it to capitalize on a $12 billion backlog and record demand for its sustainable transportation solutions. With a focus on operational excellence, the new board members bring extensive experience in manufacturing, supply chain management, and corporate governance, aligning with NFI’s commitment to growth and industry leadership.
NFI Group Subsidiary Secures Major METRO Contract
Dec 9, 2024
NFI Group Inc.’s subsidiary, Motor Coach Industries, has secured a contract to supply 100 high-floor commuter coaches to Houston’s METRO, enhancing their Park & Ride service. This significant deal strengthens NFI’s longstanding relationship with METRO, which serves over 73 million passenger trips annually across Harris County.
NFI Group Reports Strong Backlog and Improved Margins
Nov 6, 2024
NFI Group Inc. has reported a record $12 billion backlog for the third quarter of 2024, with significant improvements in gross margin and Adjusted EBITDA compared to the previous year. Despite a net loss of $15 million, the company delivered nearly 1,000 units, with a substantial portion being zero-emission buses. The aftermarket segment showed strong performance with $153 million in revenue.
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.