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AutoCanada
(TSX:ACQ)
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Rating:52Neutral
Price Target:
C$24.50
▲(11.36% Upside)
Action:Reiterated
Date:08/17/26
The score is held back primarily by weak financial quality—high leverage and a TTM cash-flow reversal to negative operating and free cash flow—despite improved earnings. Technicals provide a meaningful offset with the stock trading above major moving averages and positive momentum indicators. Valuation is reasonable but not clearly cheap (P/E ~22.5), while the latest earnings call indicates cautious optimism with explicit deleveraging plans but continued near-term profitability pressure and execution risk.
Positive Factors
Used-Vehicle and Same-Store Growth
Growth is supported by both dealership productivity and used-vehicle demand. Higher used retail volumes, selling prices and inventory velocity can broaden revenue sources and improve resilience when new-vehicle affordability and supply conditions remain difficult.
Negative Factors
High Leverage
The capital structure leaves limited equity cushion if dealership earnings weaken. Elevated leverage increases refinancing and interest burden risk, constrains capital allocation and makes the company more vulnerable to cyclical vehicle demand and margin pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Used-Vehicle and Same-Store Growth
Growth is supported by both dealership productivity and used-vehicle demand. Higher used retail volumes, selling prices and inventory velocity can broaden revenue sources and improve resilience when new-vehicle affordability and supply conditions remain difficult.
Read all positive factors
AutoCanada (ACQ) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$526.42M
Dividend Yield3.54%
Average Volume (3M)48.22K
Price to Earnings (P/E)17.0
Beta (1Y)1.87
Revenue Growth0.35%
EPS GrowthN/A
CountryCA
Employees2,550
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)1.34
Shares Outstanding22,987,644
10 Day Avg. Volume23,458
30 Day Avg. Volume48,215
Financial Highlights & Ratios
PEG Ratio-0.28
Price to Book (P/B)1.19
Price to Sales (P/S)0.11
P/FCF Ratio9.95
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$24.50Price Target Upside11.36% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)1.57
Revenue Forecast (FY)C$5.03B
AutoCanada Business Overview & Revenue Model
Company Description
AutoCanada Inc., operating through its subsidiaries, manages a network of franchised automotive dealerships. The company provides an extensive array of products and services, encompassing the sale of new and pre-owned vehicles, vehicle leasing, au...
How the Company Makes Money
AutoCanada primarily makes money through multiple dealership-driven revenue streams: (1) New vehicle sales: Revenue is generated from selling new cars and trucks sourced from OEMs. Profitability is influenced by vehicle mix, incentives, inventory ...
AutoCanada Earnings Call Summary
Earnings Call Date:Aug 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: solid operational progress (revenue growth, used-vehicle momentum, F&I strength, improved inventory velocity, collision acquisitions, liquidity actions and expense discipline) but notable near-term financial pressure (declines in gross profit, adjusted EBITDA and net income, GPUs under pressure, collision revenue impacted by reduced hail work, and leverage above target). Management outlined clear remediation steps (training, inventory controls, debt reduction, targeted acquisitions and clinic-style interventions in fixed operations) and expects gradual improvement into Q4 and 2027, indicating cautious optimism but with meaningful execution risk in the near term.Positive Updates
Revenue Growth and Same-Store Strength
Revenue from continuing operations increased 6% year-over-year to $1.4 billion; same-store revenue rose 5.5%, with growth in both new and used vehicle sales and continued strength in finance and insurance.
Negative Updates
Decline in Gross Profit and Margin
Gross profit declined 8.1% year-over-year to $207 million and gross profit percentage decreased by 220 basis points to 15.6%, reflecting continued pressure on vehicle margins and softer fixed-operations performance.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth and Same-Store Strength
Revenue from continuing operations increased 6% year-over-year to $1.4 billion; same-store revenue rose 5.5%, with growth in both new and used vehicle sales and continued strength in finance and insurance.
Read all positive updates
Company Guidance
Guidance from the call framed 2026 as a transition year with a challenging market through the balance of the year, but management expects collision to be a year of disciplined growth with stronger Q3/Q4 and expects the new in‑house sales training to begin moving new‑vehicle sales and GPUs in early 2027; they do not expect a material GPU improvement in Q3 but anticipate normalized front‑end GPUs in Q4/2027. Financial priorities and targets include directing remaining U.S. divestiture proceeds toward debt reduction (≈$106M received to date, expecting at least $130M), moving leverage from the quarter‑end total net funded debt to bank EBITDA of 3.6x toward a 2–3x target, preserving liquidity under a $1.38B syndicated facility extended to November 2028, and following a capital allocation hierarchy of protecting liquidity, investing in high‑return initiatives, pursuing selective accretive acquisitions and considering buybacks; these outlooks are anchored to recent Q2 results of revenue from continuing operations up 6% to $1.4B (same‑store +5.5%), gross profit down 8.1% to $207M (gross margin 15.6%, -220 bps), adjusted EBITDA $52M (3.7% margin vs 4.8% prior), net income from continuing ops $12.1M ($0.46/sh), used revenue +13.3% with retail units +10% and ASP +2.9%, F&I avg gross per retail unit $3,410 (from $3,337), and operating expenses before depreciation down 2.7% to $153M.AutoCanada Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
42
Neutral
Cash Flow
33
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.93B | 4.90B | 5.35B | 6.44B | 6.04B | 4.65B |
| Gross Profit | 416.09M | 330.10M | 882.28M | 479.23M | 1.04B | 834.18M |
| EBITDA | 145.95M | 178.34M | 164.34M | 217.30M | 235.04M | 309.87M |
| Net Income | 30.92M | 16.03M | -68.23M | 50.49M | 85.44M | 164.21M |
Balance Sheet | ||||||
| Total Assets | 2.77B | 2.75B | 3.01B | 3.16B | 2.86B | 2.26B |
| Cash, Cash Equivalents and Short-Term Investments | 142.25M | 87.96M | 67.34M | 103.15M | 108.30M | 102.48M |
| Total Debt | 1.96B | 1.89B | 2.01B | 2.23B | 2.03B | 1.45B |
| Total Liabilities | 2.28B | 2.26B | 2.51B | 2.59B | 2.37B | 1.74B |
| Stockholders Equity | 467.88M | 460.48M | 468.03M | 534.85M | 457.90M | 493.41M |
Cash Flow | ||||||
| Free Cash Flow | -109.77M | 54.89M | -2.45M | 40.02M | 95.31M | 78.37M |
| Operating Cash Flow | -74.25M | 81.12M | 31.63M | 119.53M | 147.97M | 112.94M |
| Investing Cash Flow | 55.00M | 47.99M | 67.86M | -125.43M | -228.02M | -215.37M |
| Financing Cash Flow | 93.36M | -120.19M | -93.92M | 183.60M | 83.21M | 97.00M |
AutoCanada Technical Analysis
Positive
22.00
Price Trends
22.78
Positive
22.44
Positive
22.93
Negative
Market Momentum
-0.07
Negative
53.36
Neutral
70.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACQ, the sentiment is Positive. The current price of 22 is below the 20-day moving average (MA) of 22.62, below the 50-day MA of 22.78, and below the 200-day MA of 22.93, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 53.36 is Neutral, neither overbought nor oversold. The STOCH value of 70.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ACQ.
AutoCanada Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$6.07B | 8.68 | 10.96% | 1.19% | 9.32% | 227.52% | |
72 Outperform | C$25.31B | 24.44 | 6.14% | 2.97% | 1.59% | -35.21% | |
67 Neutral | C$300.65M | 12.17 | 6.04% | 5.31% | 0.52% | 5.03% | |
65 Neutral | C$744.53M | 6.04 | 7.89% | 1.94% | -2.65% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | C$3.49B | 187.60 | 0.61% | 0.52% | 16.14% | 22.41% | |
52 Neutral | C$526.42M | 16.96 | 6.64% | 3.54% | 0.35% | ― |
* Consumer Cyclical Sector Average
TSE:ACQ
AutoCanada
22.73
-11.69
-33.96%
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AutoCanada Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
AutoCanada Q2 Revenue Rises as Profitability Slips Amid Soft Auto Demand
Negative
Aug 12, 2026
AutoCanada reported second-quarter 2026 revenue from continuing operations of $1.42 billion, up from $1.34 billion a year earlier, but gross profit, net income, and adjusted EBITDA all declined amid soft Canadian automotive demand and pressure on ...
Business Operations and StrategyDividends
Methanex Declares Quarterly Dividend, Reinforcing Capital-Return Strategy
Positive
Jul 16, 2026
Methanex said its board has declared a quarterly dividend of US$0.185 per share, payable on September 30, 2026, to shareholders of record as of September 16, 2026. The payout underlines the company’s ongoing capital-return strategy and provi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.