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Alithya Reports 54% Fiscal-Q4 Revenue Growth; Shares Down 2%

Story Highlights

Alithya saw a strong quarter, showing high revenue growth. However, earnings per share fell short of estimates. Is Alithya a worthy investment in the current market environment?

In this article:

Alithya Group (CA: ALYA) (ALYA) provides information technology consulting services. Its caters to financial services, manufacturing, energy, telecommunications, transportation and logistics, professional services, healthcare, and government sectors.

The firm’s services and solutions include Oracle (ORCL) solutions, Microsoft (MSFT) solutions, digital solutions center, energy services, digital strategy and transformation, project management, and infrastructure management.

Earning Results

The company recently reported earnings for its fourth quarter of Fiscal 2022. Earnings per share came in at -C$0.08, which was below analysts’ consensus estimate of -C$0.01. In the past nine quarters, the company has missed earnings estimates five times:

The stock is currently down 2%, as the market is not very happy with its earnings release. Nevertheless, Alithya saw strong revenue growth of 53.9% year-over-year, with revenue hitting C$120 million compared to C$78 million.

However, gross profit only increased by 32.5%, meaning that the company hasn’t demonstrated that it has operating leverage. Indeed, its gross margin has contracted from 30.1% to 25.9%. The drop in gross margin was caused by the company’s acquisition of R3D Consulting.

For Fiscal Year 2022, Alithya reached C$1,031.8 million in bookings, meaning it is seeing strong demand for its services.

Insider Activity

When analyzing the company’s insider transactions, you can see that there has been quite a bit of selling in the past three months. Indeed, insiders sold $807,300 worth of Alithya shares within this time frame.

As a result, the TipRanks insider confidence signal is currently negative, which is well below the sector average.

Analyst Recommendations

Alithya has a Moderate Buy consensus rating based on one Buy assigned in the past three months. Alithya stock’s price target of C$5.50 implies 70.9% upside potential.

Final Thoughts

Alithya saw a strong quarter, as revenue grew over 50% year-over-year. However, earnings per share fell short of estimates and they were negative. Thus, Alithya may not be the best investment for the current market environment.

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