Transat AT V & VV (TRZ) AI Stock Analysis

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Transat AT V & VV

(TSX:TRZ)

44Neutral

Transat AT V & VV's overall stock score reflects significant financial challenges, including negative profitability and a leveraged balance sheet. Technical indicators show downward momentum, while valuation concerns persist with a negative P/E ratio. While the earnings call and corporate events indicate some operational improvements and enhanced financial stability, these positive developments are outweighed by broader financial and market challenges.

Transat AT V & VV (TRZ) vs. S&P 500 (SPY)

Market Cap

C$60.83M

Dividend YieldN/A

Average Volume (3M)33.30K

Price to Earnings (P/E)―

Beta (1Y)0.70

Revenue Growth5.10%

EPS Growth-484.90%

CountryCA

Employees5,000

SectorConsumer Cyclical

Sector Strength59

IndustryTravel Services

Share Statistics

EPS (TTM)-4.49

Shares Outstanding39,758,236

10 Day Avg. Volume21,649

30 Day Avg. Volume33,295

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

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$1.88

Price Target Upside22.88% Upside

Rating ConsensusHold

Number of Analyst Covering2

Transat AT V & VV Business Overview & Revenue Model

Company DescriptionTransat AT V & VV (TRZ) is a Canadian company operating primarily in the tourism sector, offering an extensive range of vacation packages, air travel, and hotel services. The company manages travel brands and operates as an integrated international tourism company, focusing on holiday travel to various destinations across the globe. Its core services include charter and scheduled flights, accommodation, and a variety of travel-related services.

How the Company Makes MoneyTransat AT V & VV generates revenue through multiple streams, primarily from the sale of vacation packages, which includes flights, hotel stays, and ground transport services. The company also earns income from its airline operations, with revenue coming from ticket sales for charter and scheduled flights. In addition to these primary revenue streams, Transat AT engages in partnerships with destination hotels and tourism service providers, which can include commissions and other financial arrangements. Ancillary revenue from in-flight services, travel insurance, and guided tours also contribute to its earnings.

Transat AT V & VV Financial Statement Overview

Summary

Transat AT V & VV faces significant financial challenges with persistent profitability issues and a heavily leveraged balance sheet. While revenue shows slight growth, the company struggles with negative equity and low margins. Improved cash flow is a positive sign, but it is not sufficient to offset the broader financial risks.

Income Statement

Neutral

Transat AT V & VV has shown some revenue growth with a 1.34% increase in total revenue over the TTM period. However, profitability is a concern as both EBIT and net profit margins remain negative, indicating ongoing operational challenges. Gross profit margin stands at 11.01%, which is relatively low for the industry, reflecting cost pressures.

Balance Sheet

Negative

The company has a high debt-to-equity ratio due to negative equity, indicating significant financial leverage and potential risk. The return on equity is negative, which is concerning for shareholders. Negative stockholders' equity suggests financial instability, potentially due to accumulated losses.

Cash Flow

Neutral

Operating cash flow has improved over the TTM, showing a positive trend. The cash flow to net income ratios are favorable, indicating good cash generation relative to reported losses. However, the free cash flow growth is modest, and capital expenditures remain a constraint.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.28B	3.05B	1.64B	124.82M	1.30B
	Gross Profit
347.67M	415.68M	-92.26M	-138.79M	51.49M
	EBIT
-12.73M	89.73M	-303.42M	-401.22M	-325.12M
	EBITDA
251.42M	288.97M	-191.23M	-148.91M	-235.64M
	Net Income Common Stockholders
-114.03M	-25.29M	-445.32M	-389.44M	-496.76M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
260.34M	435.65M	322.54M	433.19M	426.43M
	Total Assets
2.75B	2.57B	2.27B	1.90B	2.02B
	Total Debt
2.15B	1.89B	1.75B	1.42B	903.89M
	Net Debt
1.89B	1.45B	1.43B	986.34M	477.45M
	Total Liabilities
3.64B	3.35B	3.02B	2.21B	1.95B
	Stockholders Equity
-889.08M	-779.04M	-750.18M	-315.11M	66.31M
Cash Flow		Free Cash Flow
-43.90M	264.18M	-210.38M	-524.04M	-107.56M
	Operating Cash Flow
94.67M	321.75M	-177.85M	-518.44M	-46.14M
	Investing Cash Flow
-31.45M	-7.93M	-33.78M	4.54M	-60.41M
	Financing Cash Flow
-240.29M	-203.02M	99.69M	522.07M	-33.37M

Transat AT V & VV Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price1.53

Price Trends

50DMA

1.58

Negative

100DMA

1.71

Negative

200DMA

1.80

Negative

Market Momentum

MACD

-0.01

Negative

RSI

49.82

Neutral

STOCH

52.38

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TRZ, the sentiment is Neutral. The current price of 1.53 is above the 20-day moving average (MA) of 1.51, below the 50-day MA of 1.58, and below the 200-day MA of 1.80, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 49.82 is Neutral, neither overbought nor oversold. The STOCH value of 52.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:TRZ.

Transat AT V & VV Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EIF	73 Outperform	C$2.67B	20.41	9.13%	5.08%	6.46%	-5.54%
AC	68 Neutral	$4.99B	3.07	112.28%	―	1.93%	-24.67%
Sector *	61 Neutral	$6.65B	11.64	3.00%	3.98%	2.61%	-21.41%
ONEX	60 Neutral	C$7.15B	18.57	3.54%	0.39%	-17.78%	-41.13%
CHR	48 Neutral	C$514.81M	―	-1.28%	―	-12.40%	-529.26%
TRZ	44 Neutral	C$60.83M	―	12.83%	―	5.10%	-484.90%

* Consumer Cyclical Sector Average

Performance Comparison

TSE:TRZ

Transat AT V & VV

1.53

-1.92

-55.65%

TSE:AC

Air Canada

14.69

-4.14

-21.99%

TSE:CHR

Chorus Aviation

19.11

3.64

23.53%

TSE:ONEX

ONEX Corporation

101.44

1.42

1.42%

TSE:EIF

Exchange Income

51.99

7.35

16.47%

Transat AT V & VV Earnings Call Summary

Earnings Call Date:Mar 13, 2025

(Q1-2025)

% Change Since: -8.38%|

Next Earnings Date:Jun 12, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with revenue growth and operational improvements on one side and challenges like grounded aircraft and macroeconomic uncertainties on the other. While there were significant achievements in terms of revenue growth and operational efficiency, the increase in net loss and grounded aircraft issues highlighted ongoing challenges.

Q1-2025 Updates

Positive Updates

Revenue Growth

Revenue grew 5.6% to $830 million in the first quarter of fiscal 2025, driven by positive yields and reduced fuel costs.

Adjusted EBITDA Improvement

Adjusted EBITDA reached $20 million compared to negative $3 million in the same quarter last year.

Efficiency Gains from Technology

The Elevation program initiatives are on track to generate $100 million in adjusted EBITDA by mid-2026, with significant efficiency gains and cost savings achieved through technology and AI.

Operational Performance

On-time performance improved by more than four percentage points year-over-year, marking the third consecutive quarter of significant progress.

Cash Flow Improvement

Cash flow from operating activities totaled $169 million, up from $111 million in the first quarter last year.

Negative Updates

Grounded Aircraft Impact

The number of grounded aircraft due to Pratt and Whitney GTF engine issues has fluctuated between six and seven, introducing cost escalation and operational volatility.

Net Loss Increase

Net loss amounted to $123 million in the first quarter of 2025, compared to $61 million in the first quarter of 2024.

Macroeconomic Uncertainties

Potential impact of U.S. tariffs and Canadian dollar depreciation on costs and consumer confidence, affecting travel demand.

Company Guidance

During the Transat conference call for the first quarter of fiscal year 2025, Annick Guerard, President and CEO, highlighted a 5.6% increase in revenue to $830 million and an adjusted EBITDA of $20 million, driven by positive yield developments, reduced fuel costs, and tight control over operating expenses. Revenue passenger miles grew by 1%, and yield improved by 1.7% year-over-year, despite a stable load factor. Available seat miles increased by 0.5%, indicating strategic capacity planning. The Elevation program is expected to contribute an annualized adjusted EBITDA of $37 million, aiming for $100 million by mid-2026. Despite engine issues with Pratt & Whitney GTF, the fleet remains at 44 aircraft for winter and 43 for summer. Network expansions include new routes to Berlin and Valencia, and a partnership with Air Europa. Operational improvements were noted, with on-time performance up by over four percentage points. The company remains focused on refinancing debt and enhancing financial stability amidst economic uncertainties, with ongoing negotiations for a new collective agreement with its pilot union.

Transat AT V & VV Corporate Events

Executive/Board ChangesShareholder Meetings

Transat A.T. Inc. Re-elects Board of Directors

Positive

May 2, 2025

Transat A.T. Inc. announced the re-election of its board of directors during the annual and special meeting of shareholders. The eleven candidates, including President and CEO Annick Guérard, were re-elected by a majority vote, reflecting strong shareholder support. This re-election is significant for the company’s governance and may influence its strategic direction and operations, reinforcing its position in the leisure travel industry.

Spark’s Take on TSE:TRZ Stock

According to Spark, TipRanks’ AI Analyst, TSE:TRZ is a Neutral.

Transat AT V & VV’s overall stock score reflects significant financial challenges, including negative profitability and a leveraged balance sheet. Technical indicators show downward momentum, while valuation concerns persist with a negative P/E ratio. While the earnings call indicates some operational improvements, these positive developments are outweighed by broader financial and market challenges.

To see Spark’s full report on TSE:TRZ stock, click here.

Shareholder Meetings

Transat A.T. Inc. Adjourns Shareholders’ Meeting Due to Quorum Shortfall

Neutral

Apr 29, 2025

Transat A.T. Inc. has adjourned its annual and extraordinary shareholders’ meeting to May 1, 2025, due to not meeting the required quorum of 25% participation. The meeting will resume in a hybrid format, and shareholders are encouraged to vote by April 30, 2025. This adjournment highlights the importance of shareholder engagement and could impact the company’s governance processes.

Spark’s Take on TSE:TRZ Stock

According to Spark, TipRanks’ AI Analyst, TSE:TRZ is a Neutral.

To see Spark’s full report on TSE:TRZ stock, click here.

Product-Related AnnouncementsBusiness Operations and Strategy

Transat Secures New GTF Engine Support Agreement for 2025-2026

Positive

Apr 17, 2025

Transat A.T. Inc. has secured a new support agreement with the manufacturer of GTF engines for 2025 and 2026, which includes compensation for grounded aircraft costs. This agreement, similar to the previous one for 2023 and 2024, provides credits for products and services, including the purchase of spare engines, which Transat may monetize through financial transactions.

Spark’s Take on TSE:TRZ Stock

According to Spark, TipRanks’ AI Analyst, TSE:TRZ is a Neutral.

Transat AT V & VV’s overall stock score reflects significant financial challenges, including negative profitability and a leveraged balance sheet. Technical indicators show downward momentum, while valuation concerns persist with a negative P/E ratio. While the earnings call and corporate events indicate some operational improvements and enhanced financial stability, these positive developments are outweighed by broader financial and market challenges.

To see Spark’s full report on TSE:TRZ stock, click here.

Business Operations and StrategyFinancial Disclosures

Transat A.T. Inc. Reports Revenue Growth and Strategic Progress in Q1 Fiscal 2025

Neutral

Mar 13, 2025

Transat A.T. Inc. reported a 5.6% increase in first-quarter revenues for fiscal 2025, reaching $829.5 million, driven by higher traffic and disciplined capacity management. Despite a net loss of $122.5 million, the company saw improvements in adjusted EBITDA and free cash flow, attributed to reduced fuel costs and operational efficiencies. The Elevation Program, aimed at optimizing long-term growth, is on track to achieve significant cost savings and efficiency gains, with a target of $100 million by mid-2026. The company is also focused on refinancing its debt and strengthening its balance sheet, extending the maturity dates of its financing agreements to provide greater flexibility in ongoing discussions with stakeholders.

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.