AutoCanada (ACQ) AI Stock Analysis

• Market Cap: C$788.50M
• Dividend Yield: N/A
• Average Volume (3M): 54.32K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.74
• Revenue Growth: -20.36%
• EPS Growth: 50.19%
• Country: CA
• Employees: 2,550
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 0.72
• Shares Outstanding: 23,150,232
• 10 Day Avg. Volume: 37,025
• 30 Day Avg. Volume: 54,318
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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$35.71
• Price Target Upside: 4.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 57 Neutral
• Price Target: C$32.00 ▼(-6.05% Downside)

AutoCanada's overall stock score is primarily influenced by its financial challenges, including declining revenues and high leverage. However, the positive sentiment from the earnings call, highlighting cost savings and improved profitability, provides some optimism. The technical analysis shows bullish momentum, but overbought conditions suggest caution. The valuation remains weak due to negative earnings and lack of dividends.

Positive Factors

Cost Management

Effective cost management enhances profitability and operational efficiency, allowing AutoCanada to allocate resources towards growth and debt reduction.

Improved Earnings and Margins

Higher EBITDA and margin improvements indicate better operational efficiency, which can drive long-term profitability and competitive positioning.

Successful U.S. Divestiture

Proceeds from divestitures can reduce leverage, improving financial stability and enabling strategic investments in core operations.

Negative Factors

Declining Revenue

A decline in revenue suggests challenges in market demand or competitive pressures, potentially impacting long-term growth prospects.

High Leverage

High leverage can constrain financial flexibility and increase vulnerability to economic downturns, affecting long-term sustainability.

Cash Flow Challenges

Declining free cash flow limits the ability to invest in growth opportunities and manage debt, posing risks to financial health.

AutoCanada Business Overview & Revenue Model

Company Description

AutoCanada Inc., through its subsidiaries, operates franchised automobile dealerships. The company offers a range of automotive products and services, including new and used vehicles, vehicle leasing, vehicle parts, vehicle maintenance and collision repair services, extended service contracts, and vehicle protection and other after-market products. It also arranges financing and insurance for vehicle purchases by its customers through third-party finance and insurance sources. The company sells its vehicles under the Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC, Buick, Cadillac, Ford, Infiniti, Nissan, Hyundai, Subaru, Audi, Volkswagen, Kia, Mazda, Mercedes-Benz, BMW, MINI, Volvo, Toyota, Lincoln, Porsche, and Honda brands. As of March 2, 2022, it operated 78 franchised dealerships in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, and New Brunswick in Canada, as well as in Illinois, the United States. The company also offers used vehicles online. AutoCanada Inc. was incorporated in 2009 and is headquartered in Edmonton, Canada.

How the Company Makes Money

AutoCanada generates revenue through several key streams. Primarily, the company earns from the sale of new and pre-owned vehicles, representing a significant portion of its income. Additionally, AutoCanada provides financing and insurance products, which contribute to its earnings through interest, premiums, and service fees. The company also profits from its parts, service, and collision repair operations, which offer maintenance and repair services for vehicles. Partnerships with automotive manufacturers and financial institutions enhance its ability to provide comprehensive automotive solutions, while favorable market conditions and consumer demand are crucial factors in its financial performance.

AutoCanada Financial Statement Overview

Summary

AutoCanada faces declining revenue and profitability, with negative net income and high leverage. However, the balance sheet provides some asset backing, offering stability against liabilities.

Income Statement

The company shows declining revenue and profitability, with TTM revenue decreasing significantly from previous years. The net income has turned negative in the latest TTM period, indicating a significant profitability issue. Gross profit margin has decreased, suggesting cost pressures or pricing challenges. These trends point to potential difficulties in sustaining revenue growth and profitability in a competitive auto dealership market.

Balance Sheet

The balance sheet indicates high leverage, with significant debt levels compared to equity, but the equity has remained relatively stable. The debt-to-equity ratio is high, reflecting potential financial risk if revenue declines further. However, the equity ratio suggests a reasonable level of asset backing, providing some stability against liabilities.

Cash Flow

Cash flow from operations has decreased, and free cash flow is negative in the TTM, highlighting liquidity challenges. The operating cash flow to net income ratio indicates that cash generation is weak relative to accounting earnings. There is a need for improved cash management to enhance liquidity and support ongoing operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.91B	5.35B	6.44B	6.04B	4.65B	3.33B
Gross Profit	826.68M	882.28M	479.23M	1.04B	834.18M	547.33M
EBITDA	216.49M	164.34M	217.30M	273.15M	326.40M	100.74M
Net Income	-18.01M	-68.23M	50.49M	85.44M	164.21M	-6.62M
Balance Sheet
Total Assets	2.76B	3.01B	3.16B	2.86B	2.26B	1.90B
Cash, Cash Equivalents and Short-Term Investments	62.41M	67.34M	103.15M	108.30M	102.48M	107.70M
Total Debt	1.80B	2.01B	2.23B	2.03B	1.45B	1.35B
Total Liabilities	2.26B	2.51B	2.59B	2.37B	1.74B	1.54B
Stockholders Equity	476.45M	468.03M	534.85M	457.90M	493.41M	341.87M
Cash Flow
Free Cash Flow	2.70M	-2.45M	40.02M	95.31M	78.37M	116.90M
Operating Cash Flow	26.35M	31.63M	119.53M	147.97M	112.94M	137.87M
Investing Cash Flow	82.71M	67.86M	-125.43M	-228.02M	-215.37M	-35.12M
Financing Cash Flow	-220.17M	-93.92M	183.60M	83.21M	97.00M	-51.02M

AutoCanada Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 34.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 34.06 is above the 20-day moving average (MA) of 33.91, above the 50-day MA of 30.39, and above the 200-day MA of 21.45, indicating a bullish trend. The MACD of 1.23 indicates Positive momentum. The RSI at 59.63 is Neutral, neither overbought nor oversold. The STOCH value of 30.84 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MG	78 Outperform	18.26B	11.07	8.76%	4.19%	-0.54%	26.31%
LNR	74 Outperform	4.60B	22.04	3.62%	1.40%	-2.60%	-64.22%
XTC	64 Neutral	257.92M	11.09	6.01%	6.21%	-3.50%	-22.76%
MRE	62 Neutral	814.50M	-12.91	-4.32%	1.79%	-8.84%	-148.15%
ACQ	57 Neutral	C$788.50M	―	20.23%	―	-20.36%	50.19%
DOO	54 Neutral	6.14B	-163.06	-7.74%	1.01%	-13.78%	-115.58%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

AutoCanada Corporate Events

AutoCanada Sells Loss-Making U.S. Dealership to Reduce Debt

AutoCanada Inc. has completed the sale of its Crystal Lake Chrysler Dodge Jeep Ram dealership in Illinois, which had been generating a loss. The sale, part of a previously announced agreement, brought in approximately $9.9 million, which will be used to reduce the company’s revolving credit facility. This move is likely to improve AutoCanada’s financial position by offloading a loss-making asset and reducing debt.

AutoCanada Partners with CarGurus to Boost Digital Strategy

AutoCanada Inc. has partnered with CarGurus to enhance its digital marketing and business intelligence strategy in Canada. This collaboration aims to leverage CarGurus’ advanced marketplace and data-driven solutions to improve AutoCanada’s marketing performance and consumer engagement. The partnership is expected to provide AutoCanada’s dealerships with increased visibility and data-informed decision-making capabilities, potentially strengthening its market position and operational efficiency.

AutoCanada to Divest 13 U.S. Dealerships in Strategic Shift

AutoCanada Inc. has announced definitive agreements to divest 13 of its U.S. dealerships for approximately $82.7 million, as part of its strategy to discontinue its U.S. Operations segment. The divestiture, expected to close in the second half of 2025, marks a significant shift in AutoCanada’s operational focus, potentially impacting its market positioning by concentrating efforts on its Canadian operations. The company remains engaged in selling its remaining four U.S. dealerships, signaling a complete exit from the U.S. market.

AutoCanada to Announce Q2 2025 Financial Results

AutoCanada Inc. announced it will release its Q2 2025 financial results on August 13, 2025, followed by a conference call and webcast for analysts and the public. This announcement allows stakeholders to gain insights into the company’s performance and strategic direction, potentially impacting its market position and investor relations.

AutoCanada Announces Leadership Transition Amidst Strategic Growth

AutoCanada Inc. announced the transition of Paul Antony from Executive Chair to non-executive Chair of the Board, following the appointment of a new CEO. Under Antony’s leadership since 2018, the company has stabilized its operations, reduced debt, and integrated advanced data analytics, positioning itself as a credible consolidator in the Canadian auto retail market. The transition marks a strategic move as the company is now poised for scalable growth, with a strong foundation and operational overhaul in place.