Cascades (CADNF) AI Stock Analysis

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Cascades (CADNF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$671.13M

Dividend Yield5.21%

Average Volume (3M)10.32K

Price to Earnings (P/E)―

Beta (1Y)0.80

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees9,700

SectorConsumer Cyclical

Sector Strength62

IndustryPackaging & Containers

Share Statistics

EPS (TTM)0.09

Shares Outstanding101,115,630

10 Day Avg. Volume2,061

30 Day Avg. Volume10,322

Financial Highlights & Ratios

PEG Ratio-2.64

Price to Book (P/B)0.53

Price to Sales (P/S)0.00

P/FCF Ratio11.63

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$7.38

Price Target Upside12.16% Upside

Rating ConsensusHold

Number of Analyst Covering5

Cascades Business Overview & Revenue Model

Company DescriptionCascades Inc. produces, converts, and markets packaging and tissue products in Canada and the United States. The company operates through three segments: Containerboard, Specialty Products, and Tissue Papers. It manufactures containerboards, as well as converts corrugated products. The company also offers uncoated recycled paperboards for use in packaging converters and industrial users of headers and wrappers for the paper industry, as well as partitions that are used as protective packaging; honeycomb paperboards for the beer, wine, and spirits industry; laminated paperboards for food packaging and furniture backing industries; and specialty containers, structural components, and paperboard and fiber composites. In addition, it provides egg filler flats and egg cartons for egg processors and four-cup carriers for the quick-service restaurant industry; polystyrene foam trays for processors and retailers in the food industry; rigid plastic packaging products for food industry, processors, and retailers; and flexible films for frozen foods, bakery, and ice industries. Further, the company offers bathroom and facial tissues, paper towels, paper hand towels and napkins, and other related products and services under the Cascades PRO Signature, Cascades PRO Perform, Cascades PRO Select, Cascades PRO Tandem, and Cascades PRO Tuff-Job brands; and under the Cascades Fluff, Cascades Tuff, and Satin Soft labels, as well as private labels and other secondary marks. Additionally, it offers services to recover and process discarded materials for the municipal, industrial, commercial, and institutional sectors. The company sells its products through own sales force and external representatives. Cascades Inc. was incorporated in 1964 and is headquartered in Kingsey Falls, Canada.

How the Company Makes Money

Cascades Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 3.30%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

While there is positive year-over-year performance in terms of sales and EBITDA, the quarter faced significant sequential declines, particularly in the tissue segment and due to challenges with Bear Island's ramp-up. Strategic focus on asset monetization and operational efficiencies provide some optimism, but the immediate outlook remains cautious due to macroeconomic uncertainties.

Q1-2025 Updates

Positive Updates

Year-Over-Year Sales Growth

Sales increased 4% year-over-year, driven by favorable exchange rates and selling prices despite a decrease in volume.

Consolidated EBITDA Increase

Consolidated EBITDA increased by 21% year-over-year, with stronger pricing in packaging activities offsetting lower volumes and higher costs.

Packaging Segment Performance

Year-over-year, packaging sales increased by 7% with EBITDA levels increasing 45%, driven by higher selling prices and lower raw material costs.

Strategic Asset Monetization

Cascades sold a closed tissue facility for US$8 million and aims to achieve $80 million from monetizing nonstrategic assets in the coming quarters.

Negative Updates

Sequential Sales and EBITDA Decline

Sales levels decreased 5% sequentially, and consolidated EBITDA decreased 14% from Q4, driven by lower volumes and higher operational costs.

Tissue Business Struggles

First quarter sales in the tissue segment decreased 8% sequentially, with EBITDA decreasing 18% due to lower volumes, higher energy costs, and increased freight costs.

Bear Island Ramp-Up Challenges

Bear Island's ramp-up is 20% behind the target ramp-up line, with production issues leading to delayed recovery times after breakdowns.

Increased Net Debt

Net debt increased by $120 million in the first quarter, primarily due to working capital requirements and higher inventories.

Company Guidance

During the first quarter of 2025, Cascades reported a 5% sequential decrease in sales due to lower volumes, although sales increased by 4% year-over-year due to favorable exchange rates and selling prices. Consolidated EBITDA stood at $125 million, a 14% decrease from the previous quarter, influenced by reduced volumes and increased operational costs, including freight and energy. Year-over-year, EBITDA rose by 21%, buoyed by robust pricing in packaging despite higher costs. OCC prices fell 6% from the previous quarter and were 23% lower year-over-year, while pulp prices showcased mixed trends, with softwood rising 4% and hardwood declining 2%. The packaging segment experienced a 3% drop in sales quarter-over-quarter, with a 17% decrease in EBITDA. Conversely, year-over-year sales rose by 7%, with a significant 45% increase in EBITDA due to higher selling prices. The tissue segment saw an 8% sales decline sequentially, with a corresponding 18% drop in EBITDA. Year-over-year, tissue sales were relatively stable, but EBITDA decreased by $13 million. Overall, Cascades remains cautious about economic uncertainties, affecting demand in both packaging and tissue segments.

Cascades Financial Statement Overview

Summary

Cascades demonstrates stable revenue growth and solid cash flow management, which are positive indicators of operational resilience. However, profitability struggles persist, as reflected in negative net income and low EBIT margins. The balance sheet shows moderate leverage, allowing some financial stability but with a need for improved profitability to enhance overall financial health.

Income Statement

Positive

The company shows a modest revenue growth of 0.96% in TTM (Trailing-Twelve-Months), reflecting resilience in sales. However, the net profit margin is negative, indicating ongoing profitability challenges. The EBIT margin is low at 2.87%, although EBITDA margin is relatively better at 9.14%, suggesting some operational efficiency. Overall, while there is stable revenue growth, profitability remains a concern.

Balance Sheet

Neutral

The debt-to-equity ratio stands at 1.31, indicating a moderate level of leverage. Return on Equity is negative due to the net loss, highlighting profitability issues. The equity ratio is 34.02%, suggesting a reasonable proportion of assets financed by shareholders. The balance sheet reflects a company with moderate leverage but with room to improve profitability.

Cash Flow

Positive

The operating cash flow to net income ratio is strong, showing robust cash generation relative to earnings. Free cash flow has decreased but remains positive, indicating some financial flexibility. Free cash flow to net income ratio is positive, suggesting efficient cash management. Cash flow performance is solid, with strong operating cash flow providing a buffer against profitability challenges.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.75B	4.70B	4.64B	4.47B	3.96B	5.16B
	Gross Profit
1.83B	1.85B	1.66B	1.63B	491.00M	836.00M
	EBIT
136.00M	95.00M	40.00M	141.00M	151.00M	366.00M
	EBITDA
434.00M	392.00M	307.00M	273.00M	281.00M	548.00M
	Net Income Common Stockholders
-4.00M	-31.00M	-76.00M	-14.00M	-47.00M	198.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
55.00M	28.00M	54.00M	111.00M	175.00M	389.00M
	Total Assets
4.77B	5.00B	4.77B	5.05B	4.57B	5.41B
	Total Debt
1.94B	2.12B	1.94B	2.07B	1.52B	2.06B
	Net Debt
1.88B	2.10B	1.88B	1.97B	1.35B	1.68B
	Total Liabilities
2.99B	3.23B	2.99B	3.13B	2.64B	3.46B
	Stockholders Equity
1.74B	1.72B	1.74B	1.87B	1.88B	1.75B
Cash Flow		Free Cash Flow
79.00M	88.00M	159.00M	-362.00M	-90.00M	324.00M
	Operating Cash Flow
258.00M	272.00M	510.00M	144.00M	211.00M	587.00M
	Investing Cash Flow
-144.00M	-150.00M	-332.00M	-486.00M	-247.00M	-203.00M
	Financing Cash Flow
-114.00M	-149.00M	-225.00M	272.00M	-529.00M	-156.00M

Cascades Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CADNF		$671.13M	―	-0.24%	5.21%	―	―
CCL.A	78 Outperform	C$13.75B	16.71	16.68%	1.46%	9.80%	60.44%
WPK	78 Outperform	C$2.79B	13.77	11.26%	0.40%	5.50%	9.93%
TCL.A	76 Outperform	C$1.76B	9.88	9.65%	4.26%	-2.58%	100.21%
SXP	68 Neutral	C$96.52M	―	-10.60%	4.58%	-3.15%	-222.64%
Sector *	62 Neutral	$6.88B	11.32	2.90%	3.87%	2.70%	-24.57%
CCDBF		$10.04B	16.39	16.78%	1.50%	―	―

* Consumer Cyclical Sector Average

Performance Comparison

CADNF

Cascades

6.58

0.08

1.23%

TSE:CCL.A

CCL Industries (A)

80.74

8.74

12.14%

TSE:SXP

Supremex

3.93

0.34

9.47%

TSE:TCL.A

Transcontinental

21.11

7.69

57.30%

TSE:WPK

Winpak

45.33

3.05

7.21%

CCDBF

CCL Industries

57.01

5.78

11.28%

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.