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Alithya Group
(TSX:ALYA)
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Rating:47Neutral
Price Target:
C$1.00
▼(-3.85% Downside)
Action:Reiterated
Date:08/18/26
The score is held back primarily by weak profitability and contracting revenue, despite resilient positive free cash flow. Technicals remain pressured relative to longer-term moving averages, and valuation is hard to justify with negative earnings. The latest earnings call reinforced near-term headwinds (weaker revenue and margins, below-par book-to-bill) even as management pointed to a healthy pipeline and strategic initiatives.
Positive Factors
Resilient Cash Generation
Positive operating and free cash flow despite accounting losses indicates effective cash conversion and working-capital discipline. This provides internal funding for operations and investment, although durability depends on recovering utilization and profitability.
Negative Factors
Persistent Unprofitability and Margin Pressure
Sustained net losses and declining EBITDA margins weaken earnings quality and limit reinvestment capacity. Lower utilization, delayed project starts, salary increases and reduced tax credits could keep margins under pressure until demand conversion improves.
Read all positive and negative factors
Positive Factors
Negative Factors
Resilient Cash Generation
Positive operating and free cash flow despite accounting losses indicates effective cash conversion and working-capital discipline. This provides internal funding for operations and investment, although durability depends on recovering utilization and profitability.
Read all positive factors
Alithya Group (ALYA) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$108.38M
Dividend YieldN/A
Average Volume (3M)71.03K
Price to Earnings (P/E)―
Beta (1Y)0.32
Revenue Growth-3.88%
EPS Growth-1119.52%
CountryCA
Employees2,600
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-0.43
Shares Outstanding89,438,675
10 Day Avg. Volume49,566
30 Day Avg. Volume71,028
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.97
Price to Sales (P/S)0.29
P/FCF Ratio8.52
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$1.53Price Target Upside46.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)-0.04
Revenue Forecast (FY)C$420.65M
Alithya Group Business Overview & Revenue Model
Company Description
Alithya Group Inc., a company founded in 1992 and based in Montreal, Canada, delivers a comprehensive suite of strategic and digital technology services throughout Canada, the United States, and Europe. Their services span several key areas: strat...
How the Company Makes Money
Alithya primarily makes money by selling professional services and recurring managed services to organizations undertaking technology and digital transformation initiatives. (1) Professional/consulting services: A significant portion of revenue co...
Alithya Group Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Negative
The call presented a mixed picture: operationally the company shows clear strategic progress (segment realignment, AI and cloud traction, a significant Oracle win, strong new-business generation and a shift toward fixed-price and AI-enabled offerings). However, the quarter featured material near-term financial deterioration — revenue down 15.4%, gross margin down 19.8%, adjusted net earnings down 56%, and a reported net loss — driven mainly by utilization shortfalls from delayed project starts, reduced regional contract activity and the impact of a recent divestiture. Management emphasized a healthy pipeline and late-stage opportunities, but near-term conversion timing and profitability pressure are significant and have prompted a Board-initiated strategic review. Overall, negative financial trends in the quarter outweigh the operational positives and pipeline progress.Positive Updates
Strategic Transformation and Reporting Reorganization
Company completed a multi-year transformation toward higher-value integration services, introduced two new reporting segments (Enterprise Transformation; Industry Services & Solutions) to better reflect strategic focus and post-acquisition/integration structure.
Negative Updates
Revenue Decline
Q1 revenues were $105.1M, down 15.4% year-over-year, driven by delayed project starts, projects maturing, reduced government and financial services revenues in Quebec and the divestiture of Datum (which reduced revenue by $4.2M).
Read all updates
Q1-2027 Updates
Positive
Negative
Strategic Transformation and Reporting Reorganization
Company completed a multi-year transformation toward higher-value integration services, introduced two new reporting segments (Enterprise Transformation; Industry Services & Solutions) to better reflect strategic focus and post-acquisition/integration structure.
Read all positive updates
Company Guidance
Management did not give formal forward-looking guidance on the call, instead flagging that Q1 weakness was driven by lower utilization and longer client decision and conversion cycles while stressing a healthy pipeline and a strategic review launched July 27 (Scotiabank engaged); they cited Q1 revenue of $105.1M (down 15.4% YoY), gross margin $31.9M (30.4% of revenues, down from 32.1% and down 19.8% YoY), client retention of 77.4%, 37 new clients, and a $4.2M revenue impact from the Datum divestiture; segment detail included Enterprise Transformation revenue $62.6M (down 4.9%) and Industry Services & Solutions $42.5M (down 21.6%); operating metrics included SG&A $28.3M (down 7.5%, 27% of revenues), adjusted EBITDA $5.4M (5.2% of revenues, versus $11.6M/9.4% prior), net loss $2.4M (‑$0.03/sh), adjusted net earnings $2.9M ($0.03/sh, down 56%), net cash used in operations $4.8M (vs $4.2M), $8.3M unfavorable working capital change, and net debt / TTM adjusted EBITDA of 2.9x; bookings and pipeline metrics were highlighted as Q1 bookings $89.0M (book-to-bill 0.85, 0.92 adj.), TTM bookings $405.1M (book-to-bill 0.88, 0.96 adj.), >70% of Q1 bookings from new business (28% from new customers), Enterprise Transformation bookings $61.2M (book-to-bill 0.99), Industry Services bookings $27.8M (book-to-bill 0.64, 0.78 adj.), ~40% of engagements fixed-price/ fixed-price‑like, a USD 11.7M Oracle win, and support for 300,000+ Microsoft 365 Copilot licenses — all offered as context rather than numeric guidance.Alithya Group Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
46
Neutral
Cash Flow
57
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 458.28M | 477.39M | 473.48M | 522.70M | 437.88M | 287.64M |
| Gross Profit | 140.59M | 127.11M | 147.01M | 151.77M | 116.15M | 83.02M |
| EBITDA | 25.32M | 27.40M | 36.00M | 6.38M | 5.80M | -809.00K |
| Net Income | -41.38M | -38.78M | 1.29M | -30.10M | -15.55M | -17.34M |
Balance Sheet | ||||||
| Total Assets | 374.47M | 381.96M | 425.98M | 464.10M | 447.72M | 243.26M |
| Cash, Cash Equivalents and Short-Term Investments | 13.21M | 12.83M | 15.96M | 22.58M | 17.66M | 6.90M |
| Total Debt | 135.82M | 126.72M | 118.91M | 145.71M | 127.94M | 70.41M |
| Total Liabilities | 232.11M | 239.27M | 241.42M | 277.03M | 247.97M | 135.25M |
| Stockholders Equity | 142.36M | 142.69M | 184.56M | 187.07M | 199.75M | 108.01M |
Cash Flow | ||||||
| Free Cash Flow | 19.88M | 16.32M | 46.99M | 26.30M | -4.71M | -2.73M |
| Operating Cash Flow | 21.23M | 17.73M | 48.43M | 28.88M | -1.63M | -456.00K |
| Investing Cash Flow | -3.92M | -13.61M | -7.82M | -13.73M | -18.94M | -4.57M |
| Financing Cash Flow | -23.16M | -6.65M | -34.15M | -11.33M | 31.40M | 3.42M |
Alithya Group Technical Analysis
Positive
1.04
Price Trends
1.07
Positive
1.16
Negative
1.36
Negative
Market Momentum
>-0.01
Negative
55.47
Neutral
59.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ALYA, the sentiment is Positive. The current price of 1.04 is below the 20-day moving average (MA) of 1.09, below the 50-day MA of 1.07, and below the 200-day MA of 1.36, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 55.47 is Neutral, neither overbought nor oversold. The STOCH value of 59.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ALYA.
Alithya Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | C$20.90B | 12.60 | 17.17% | 0.67% | 5.67% | 6.31% | |
63 Neutral | C$32.10M | 20.27 | 3.09% | ― | -22.72% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
48 Neutral | C$104.58M | -0.53 | -58.44% | ― | -3.81% | -275.71% | |
47 Neutral | C$108.38M | -2.59 | -27.81% | ― | -3.88% | -1119.52% | |
43 Neutral | C$4.58M | -0.22 | -532.72% | ― | 15.20% | 18.72% | |
37 Underperform | C$2.75M | -15.00 | 8.99% | ― | 19.01% | 70.15% |
* Technology Sector Average
TSE:ALYA
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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.