Toromont Industries (TIH) AI Stock Analysis

• Market Cap: C$14.16B
• Dividend Yield: 1.25%
• Average Volume (3M): 166.28K
• Price to Earnings (P/E): 28.6
• Beta (1Y): 0.54
• Revenue Growth: 2.97%
• EPS Growth: -0.80%
• Country: CA
• Employees: 7,300
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 1.72
• Shares Outstanding: 81,375,750
• 10 Day Avg. Volume: 127,018
• 30 Day Avg. Volume: 166,275
• PEG Ratio: -3.74
• Price to Book (P/B): 3.15
• Price to Sales (P/S): 1.86
• P/FCF Ratio: 57.46
• 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$172.88
• Price Target Upside: -2.98% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: C$195.00 ▲(9.43% Upside)

Toromont Industries' overall stock score reflects strong financial performance with robust profitability and cash flow management. However, the decline in revenue growth and high valuation are concerns. The mixed technical indicators and earnings call sentiment further contribute to a moderate outlook. The company's strong liquidity and strategic focus provide some resilience against economic uncertainties.

Positive Factors

Strong free cash flow generation

Sustained 81.5% FCF growth signals robust cash conversion from operations, supporting durable capital allocation: funding dividends, reinvestment, bolt-on M&A and working capital. Strong cash flow reduces reliance on external financing and enhances resilience across cycles.

Prudent leverage and liquidity

A net cash position and large cash balance provide long-term financial flexibility to fund growth, absorb downturns, and execute strategic initiatives. Low leverage lowers bankruptcy risk and preserves capacity to invest in service networks and inventory for a capital-intensive distribution business.

Diversified segments with backlog growth

Strong CIMCO revenue and order momentum indicate successful expansion in HVAC and power solutions, diversifying revenue away from cyclical equipment sales. Robust backlogs and bookings support medium-term revenue visibility and smoother cash flows across economic cycles.

Negative Factors

Material slowdown in revenue growth

A large drop in revenue growth rate is a structural concern: it can compress operating leverage, limit reinvestment capacity, and signal weakening end-market demand. For a distributor reliant on equipment cycles, prolonged revenue contraction undermines long-term margin sustainability and returns.

Equipment Group exposure to mining downturn

Persistent weakness in mining-related equipment sales highlights cyclicality risk. Heavy exposure to commodity-driven capex can cause multi-quarter revenue volatility, making earnings and service revenue growth dependent on recovered capital spending in mining and construction sectors.

Rising operating and financing costs

Higher SG&A and growing interest costs shrink operating leverage and free cash flow. Increased compensation, DSU adjustments and borrowing costs reduce funds available for reinvestment and acquisitions, pressuring margins and return-on-capital if revenue growth doesn't resume.

Toromont Industries Business Overview & Revenue Model

Company Description

Toromont Industries Ltd. provides specialized capital equipment in Canada, the United States, and internationally. It operates in two segments, Equipment Group and CIMCO. The Equipment Group segment engages in the sale, rental, and service of mobile equipment for Caterpillar and other manufacturers; sale, rental, and service of engines used in various applications, including industrial, commercial, marine, on-highway trucks, and power generation; and sale of complementary and related products, parts, and services. This segment serves building, mining, aggregates, public infrastructure, residential construction, power generation, marine, agriculture, forestry, on-highway truck engines, industrial, demolition, and waste management markets. The CIMCO segment is involved in the design, engineering, fabrication, installation, and after-sale support of refrigeration systems in industrial and recreational markets. This segment primarily serves beverage and food processing, cold storage, food distribution, mining, and recreational ice rink sectors. Toromont Industries Ltd. was founded in 1961 and is based in Concord, Canada.

How the Company Makes Money

Toromont Industries generates revenue through multiple key streams. The primary source of income comes from the sale of heavy equipment, particularly Caterpillar products, which are crucial for construction and mining activities. The company also earns significant revenue from its parts and service divisions, providing maintenance, repair, and spare parts for the equipment it sells. Additionally, Toromont's power systems segment, which includes the sale of generators and related services, contributes to its revenue. Strategic partnerships with manufacturers like Caterpillar enhance TIH's offerings and market reach. The company also benefits from its established customer relationships, leading to repeat business and long-term contracts, especially in sectors with ongoing equipment needs.

Toromont Industries Financial Statement Overview

Summary

Toromont Industries shows strong financial health with consistent revenue growth, solid profitability margins, and effective cash flow management. The balance sheet is stable with prudent leverage, though rising debt levels require attention. Robust cash flow growth further strengthens the financial position.

Income Statement

Toromont Industries demonstrates strong financial performance with a consistent revenue growth rate, highlighted by a 32.6% increase in the TTM period. The company maintains healthy gross and net profit margins, with the TTM gross profit margin at 24.67% and net profit margin at 9.51%. EBIT and EBITDA margins are also robust, indicating efficient operational management. However, there is a slight decline in margins compared to previous periods, which could be a potential area of concern.

Balance Sheet

The balance sheet of Toromont Industries is solid, with a manageable debt-to-equity ratio of 0.33 in the TTM period, reflecting prudent financial leverage. The return on equity is strong at 16.43%, showcasing effective use of shareholder funds. The equity ratio stands at 57.6%, indicating a stable capital structure. However, the increase in total debt over the periods suggests a need for careful monitoring of leverage levels.

Cash Flow

The cash flow position is strong, with a significant free cash flow growth rate of 227.36% in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.45, and the free cash flow to net income ratio is 0.61, both reflecting healthy cash flow management. Despite the positive growth, the operating cash flow coverage ratio is relatively low, suggesting potential liquidity management challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.09B	5.02B	4.62B	4.12B	3.89B	3.48B
Gross Profit	1.28B	1.26B	1.24B	1.12B	969.77M	835.75M
EBITDA	948.37M	864.02M	876.31M	772.03M	627.66M	524.86M
Net Income	495.70M	506.52M	534.71M	454.20M	332.71M	254.91M
Balance Sheet
Total Assets	5.19B	4.87B	4.57B	4.18B	3.58B	3.35B
Cash, Cash Equivalents and Short-Term Investments	1.06B	890.82M	1.04B	927.78M	916.83M	591.13M
Total Debt	842.53M	689.72M	682.06M	670.92M	665.92M	672.06M
Total Liabilities	2.02B	1.91B	1.89B	1.86B	1.63B	1.65B
Stockholders Equity	3.17B	2.96B	2.68B	2.33B	1.95B	1.70B
Cash Flow
Free Cash Flow	493.26M	162.19M	180.62M	114.19M	420.68M	253.28M
Operating Cash Flow	868.79M	508.10M	526.99M	388.17M	610.07M	400.09M
Investing Cash Flow	-355.90M	-355.78M	-249.31M	-215.55M	-136.21M	-83.61M
Financing Cash Flow	-123.30M	-303.44M	-164.49M	-162.16M	-148.14M	-90.88M

Toromont Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 178.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TIH, the sentiment is Positive. The current price of 178.19 is above the 20-day moving average (MA) of 167.72, above the 50-day MA of 164.58, and above the 200-day MA of 140.47, indicating a bullish trend. The MACD of 2.89 indicates Negative momentum. The RSI at 73.08 is Negative, neither overbought nor oversold. The STOCH value of 87.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TIH.

Toromont Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTT	78 Outperform	C$10.90B	21.02	19.66%	1.58%	1.32%	24.27%
RUS	73 Outperform	C$2.71B	16.54	10.04%	3.88%	8.15%	-3.57%
TIH	69 Neutral	C$14.16B	28.58	16.34%	1.25%	2.97%	-0.80%
WJX	69 Neutral	C$619.08M	13.44	8.84%	5.09%	3.71%	-12.70%
BDGI	66 Neutral	C$2.68B	31.46	22.05%	0.99%	13.02%	52.88%
ATS	66 Neutral	C$4.17B	-791.84	-0.27%	―	-5.59%	-104.09%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Toromont Industries Corporate Events

Toromont Industries Reports Mixed Q3 2025 Results Amidst Market Challenges

Toromont Industries reported a mixed financial performance for the third quarter of 2025, with a slight decline in revenue but an increase in net earnings. The company’s revenue decreased by 2% compared to the previous year, primarily due to lower sales in the Equipment Group, although this was partially offset by a 22% increase in CIMCO’s revenue. Net earnings rose by 7%, aided by a property sale and the acquisition of AVL, despite facing macroeconomic challenges and higher net interest expenses. The Equipment Group maintained strong activity in rentals and product support, while CIMCO’s growth was driven by demand in both Canada and the US. The company’s backlog increased to $1.3 billion, reflecting healthy demand and progress in deliveries.

The most recent analyst rating on (TSE:TIH) stock is a Hold with a C$160.00 price target. To see the full list of analyst forecasts on Toromont Industries stock, see the TSE:TIH Stock Forecast page.