NFI Group Inc (NFI) AI Stock Analysis

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NFI Group Inc

(TSX:NFI)

Rating:66Neutral

Price Target:

C$18.50

▲(5.65%Upside)

NFI Group's overall stock score reflects a mix of strong technical momentum and positive corporate events, counterbalanced by financial performance challenges and valuation concerns. The most significant strengths are the bullish technical indicators and recent strategic corporate actions, which enhance growth prospects. However, the high leverage and ongoing net losses present risks that weigh on the score.

Positive Factors

Backlog

NFI continues to drive backlog to record levels with year-end 2024 exiting at ~$13 billion.

Valuation

NFI's valuation does sit at an attractive level (~5x 2026 EV/EBITDA vs. historical levels in the ~8x range).

Negative Factors

Leverage and Tariffs

Elevated leverage and potential downside from upcoming tariffs remain concerns.

Supplier Issues

The company continues to face supplier-related seat issues and now, potential tariff impacts.

NFI Group Inc (NFI) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$2.04B

Dividend YieldN/A

Average Volume (3M)242.53K

Price to Earnings (P/E)―

Beta (1Y)0.80

Revenue Growth15.99%

EPS Growth99.83%

CountryCA

Employees8,876

SectorConsumer Cyclical

Sector Strength56

IndustryAuto - Manufacturers

Share Statistics

EPS (TTM)0.03

Shares Outstanding119,060,844

10 Day Avg. Volume237,516

30 Day Avg. Volume242,526

Financial Highlights & Ratios

PEG Ratio>-0.01

Price to Book (P/B)0.85

Price to Sales (P/S)0.00

P/FCF Ratio-1.80

Enterprise Value/Market Cap0.83

Enterprise Value/Revenue0.13

Enterprise Value/Gross Profit4.50

Enterprise Value/Ebitda2.12

Forecast

1Y Price Target

C$18.00

Price Target Upside2.80% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

NFI Group Inc Business Overview & Revenue Model

Company DescriptionNFI Group Inc., together with its subsidiaries, manufactures and sells buses in North America, the United Kingdom, Europe, the Asia Pacific, and internationally. It operates through two segments, Manufacturing Operations and Aftermarket Operations. The company offers heavy-duty transit buses under the New Flyer name; single and double-deck buses under the Alexander Dennis Limited brand name; motor coaches under Plaxton and MCI brand names; low-floor cutaway and medium-duty buses under the ARBOC brand; and aftermarket parts under the NFI Parts brand name, as well as articulated buses. It also provides zero-emission vehicles, including battery-electric buses, motor coaches, hydrogen fuel-cell buses, and electric trolleys. In addition, company offers post-sale services, including part distribution, field services, support documentation, training, and special projects. The company was formerly known as New Flyer Industries Inc. and changed its name to NFI Group Inc. in May 2018. NFI Group Inc. was founded in 1930 and is headquartered in Winnipeg, Canada.

How the Company Makes MoneyNFI Group Inc. generates revenue primarily through the sale of its buses and coaches to public and private transportation operators. The company's revenue streams include the manufacturing and sale of new buses and coaches under its various brands, which cater to different market segments. NFI also derives income from its aftermarket parts division, NFI Parts, which supplies replacement parts and support services for its vehicles. Additionally, the company's revenue is bolstered by service contracts and long-term maintenance agreements with transit authorities and fleet operators. Strategic partnerships, government contracts, and investments in zero-emission vehicle technology also play a significant role in NFI's revenue generation, as they expand the company's market reach and align with global sustainability trends.

NFI Group Inc Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 35.74%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive outlook for NFI, with significant achievements in backlog and demand, improved financial metrics, and strategic financial maneuvers through a new credit agreement. However, challenges remain with ongoing supplier disruptions, market conditions in the UK, and uncertainties around tariffs. Despite these challenges, the overall sentiment leans toward optimism due to strong demand and record backlogs.

Q1-2025 Updates

Positive Updates

Record Backlog

NFI's total backlog reached a record $13.7 billion with 16,527 equivalent units, primarily driven by North American public transit agencies.

Strong Demand and New Orders

NFI recorded new orders of 2,523 equivalent units in Q1, with a book-to-bill ratio of 139.3% and a steady option backlog conversion rate of 76%.

Significant Year-over-Year Improvement

NFI achieved an 84% year-over-year increase in quarterly adjusted EBITDA and a $141 million year-over-year improvement in the Manufacturing segment on an LTM basis.

Improved Credit Facility

NFI entered into a new $845 million senior secured credit agreement, providing improved covenants, increased liquidity, greater financial flexibility, and lower interest costs.

Highest Zero Emission Deliveries

The company delivered its highest-ever zero-emission buses in Q1 2025, a significant milestone reflecting ongoing capabilities in this area.

Negative Updates

Net Loss in Q1

NFI reported a net loss of $6.5 million in Q1 2025, though it represents a year-over-year improvement of $2.9 million.

Challenges with Seat Supplier

NFI continues to face disruptions from its largest North American transit bus seat supplier, leading to lower line entry rates and affecting the production schedule.

Weak UK Market Conditions

The UK market experienced tough conditions with very few new awards in the quarter, impacting transit deliveries and contributing to lower margins.

Uncertainty with Tariffs

NFI is exposed to potential cost increases due to steel and aluminum tariffs, impacting the bill of materials and requiring negotiations with customers.

Company Guidance

In the NFI 2025 Q1 Financial Results Conference Call, the company provided an optimistic outlook despite facing challenges like seat supplier disruptions and tough conditions in the U.K. market. Key metrics highlighted include a record total backlog of $13.7 billion comprising 16,527 equivalent units and a book-to-bill ratio of 139.3%. The company's adjusted EBITDA increased by 84% year-over-year, although it reported a net loss of $6.5 million, an improvement of $2.9 million from the previous year. NFI secured a new $845 million senior secured credit agreement, which enhances liquidity and reduces interest costs. The company reaffirmed its 2025 guidance, projecting revenues of $3.8 billion to $4.2 billion and adjusted EBITDA of $320 million to $360 million. Despite tariff and supply chain challenges, NFI remains confident in leveraging its strong backlog and improved market conditions to drive continued growth.

NFI Group Inc Financial Statement Overview

Summary

NFI Group Inc shows positive revenue growth and operational efficiency improvements. However, persistent net losses, high leverage, and negative free cash flow highlight financial risks and liquidity challenges.

Income Statement

Neutral

NFI Group Inc has shown an increase in revenue from previous periods, with a TTM revenue of CAD 3.24 billion, indicating a positive growth trend. However, the company struggles with profitability as net income remains negative, affecting net profit margin. Gross profit margin and EBIT margin have improved, suggesting operational efficiency gains. The EBITDA margin reflects moderate operational performance, but the consistent net losses raise concerns about the company's ability to achieve profitability.

Balance Sheet

Neutral

The balance sheet displays a concerning debt-to-equity ratio, indicating high leverage, which poses a financial risk. Stockholders' equity has shown resilience, but the equity ratio remains moderate. Return on equity is negative due to persistent net losses, which is a significant weakness in financial stability. While total assets have increased, high debt levels limit financial flexibility and increase financial risk.

Cash Flow

Neutral

The cash flow statement highlights challenges in maintaining positive free cash flow. Despite an improving operating cash flow, the company still reports negative free cash flow, indicating insufficient cash generation to cover capital expenditures. The operating cash flow to net income ratio is favorable, suggesting operational cash generation exceeds accounting losses. However, the negative free cash flow to net income ratio underscores ongoing liquidity issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.24B	3.12B	2.69B	2.05B	2.34B	2.42B
Gross Profit	374.45M	349.44M	220.76M	49.13M	235.59M	199.25M
EBITDA	226.01M	220.29M	47.69M	-144.23M	165.34M	20.88M
Net Income	-369.00K	-3.30M	-136.16M	-276.38M	-14.48M	-157.74M
Balance Sheet
Total Assets	2.99B	2.91B	2.70B	2.59B	2.60B	2.76B
Cash, Cash Equivalents and Short-Term Investments	107.98M	49.56M	49.62M	49.99M	77.32M	55.77M
Total Debt	1.22B	1.18B	1.14B	1.24B	955.85M	1.28B
Total Liabilities	2.29B	2.21B	2.00B	2.01B	1.73B	2.14B
Stockholders Equity	703.53M	707.75M	702.91M	577.15M	871.77M	620.14M
Cash Flow
Free Cash Flow	-2.16M	-32.57M	-100.80M	-273.43M	78.97M	40.33M
Operating Cash Flow	42.78M	15.34M	-63.81M	-241.85M	115.23M	66.06M
Investing Cash Flow	-27.26M	-34.63M	-53.34M	-24.53M	-30.79M	-38.48M
Financing Cash Flow	24.43M	20.75M	117.84M	238.28M	-59.99M	-37.00K

NFI Group Inc Technical Analysis

Technical Analysis Sentiment

Positive

Last Price17.51

Price Trends

50DMA

14.43

Positive

100DMA

12.93

Positive

200DMA

14.14

Positive

Market Momentum

MACD

0.77

Negative

RSI

78.47

Negative

STOCH

92.82

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NFI, the sentiment is Positive. The current price of 17.51 is above the 20-day moving average (MA) of 15.96, above the 50-day MA of 14.43, and above the 200-day MA of 14.14, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 78.47 is Negative, neither overbought nor oversold. The STOCH value of 92.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NFI.

NFI Group Inc Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NFI	66 Neutral	C$2.04B	―	-0.03%	―	15.99%	99.83%
Sector *	62 Neutral	$16.72B	10.85	-7.48%	3.15%	1.66%	-24.52%
GPV	44 Neutral	C$15.63M	―	-218.43%	―	-57.55%	-31.45%
FHYDF		$36.11M	―		―	―	―

* Consumer Cyclical Sector Average

Performance Comparison

TSE:NFI

NFI Group Inc

17.51

1.67

10.54%

TSE:GPV

GreenPower Motor

0.53

-0.92

-63.45%

FHYDF

First Hydrogen

0.52

0.12

30.00%

NFI Group Inc Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy

NFI’s New Flyer to Deliver 55 Buses to Brampton Transit

Positive

Jun 23, 2025

NFI Group Inc.’s subsidiary, New Flyer, has secured an order to deliver 55 Xcelsior buses to Brampton Transit, enhancing the city’s fleet with hybrid-electric and clean-diesel models. This order supports Brampton’s efforts to build a more sustainable transit system and reinforces New Flyer’s position as a leader in providing innovative mobility solutions, which are crucial for urban growth and transit innovation.