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A & W Food Services of Canada Inc.
(TSX:AW)
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Rating:66Neutral
Price Target:
C$39.00
â–²(7.85% Upside)
Action:Reiterated
Date:07/24/26
The score is driven primarily by improved profitability and strong cash conversion, tempered by a highly leveraged balance sheet that increases financial risk. Valuation is a positive factor due to the moderate P/E and high dividend yield, while technical indicators are largely neutral with only mild negative momentum signals.
Positive Factors
Franchise business model
A&W's franchised model creates durable, royalty-driven revenue and low incremental capital needs for the company. Recurring fees and brand leverage support steady cash flow and scalable margins over time, insulating corporate earnings from unit-level volatility.
Negative Factors
High leverage
A&W's debt-heavy capital structure materially constrains financial flexibility and raises refinancing and interest-rate risks. High leverage can amplify earnings volatility, limit M&A or capex options, and leave the company exposed if cash generation weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Franchise business model
A&W's franchised model creates durable, royalty-driven revenue and low incremental capital needs for the company. Recurring fees and brand leverage support steady cash flow and scalable margins over time, insulating corporate earnings from unit-level volatility.
Read all positive factors
A & W Food Services of Canada Inc. (AW) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$863.85M
Dividend Yield5.33%
Average Volume (3M)5.52K
Price to Earnings (P/E)15.8
Beta (1Y)0.45
Revenue Growth-1.57%
EPS Growth218.18%
CountryCA
Employees300
SectorGeneral
Sector StrengthN/A
IndustryRestaurants
Share Statistics
EPS (TTM)2.28
Shares Outstanding23,969,270
10 Day Avg. Volume4,965
30 Day Avg. Volume5,521
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)4.09
Price to Sales (P/S)3.08
P/FCF Ratio16.21
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$40.00Price Target Upside10.62% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)2.31
Revenue Forecast (FY)C$305.40M
A & W Food Services of Canada Inc. Business Overview & Revenue Model
Company Description
A&W Food Services of Canada Inc., alongside its subsidiaries, is dedicated to developing, running, and licensing quick-service eateries throughout Canada. Operating under the well-recognized A&W brand, their menu boasts a diverse selection, includ...
How the Company Makes Money
A&W Canada makes money primarily through a franchised-restaurant model supplemented by company-operated restaurant sales. Key revenue streams include: (1) Franchise royalties and fees: Franchisees pay ongoing royalties (and may pay initial franchi...
A & W Food Services of Canada Inc. Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
42
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 294.42M | 294.10M | 292.30M | 299.31M | 299.36M | 244.98M |
| Gross Profit | 143.39M | 143.56M | 248.26M | 244.45M | 131.52M | 69.51M |
| EBITDA | 115.25M | 100.54M | 72.42M | 76.26M | 62.58M | 33.34M |
| Net Income | 54.70M | 55.20M | 11.88M | 24.11M | 35.20M | 35.54M |
Balance Sheet | ||||||
| Total Assets | 1.25B | 1.24B | 1.21B | 924.59M | 886.91M | 857.82M |
| Cash, Cash Equivalents and Short-Term Investments | 4.93M | 982.00K | 22.53M | 3.85M | 5.04M | 9.63M |
| Total Debt | 903.53M | 905.92M | 915.36M | 659.13M | 631.04M | 630.62M |
| Total Liabilities | 1.03B | 1.02B | 1.04B | 1.05B | 1.02B | 1.00B |
| Stockholders Equity | 218.87M | 221.81M | 163.68M | -211.93M | -216.58M | -146.81M |
Cash Flow | ||||||
| Free Cash Flow | 74.81M | 55.90M | 58.32M | 12.95M | 14.20M | 22.19M |
| Operating Cash Flow | 77.21M | 56.97M | 61.23M | 18.95M | 15.88M | 24.68M |
| Investing Cash Flow | -2.67M | -2.48M | -168.38M | 5.13M | -4.63M | 7.21M |
| Financing Cash Flow | -72.32M | -76.04M | 125.83M | -25.26M | -15.88M | -61.83M |
A & W Food Services of Canada Inc. Technical Analysis
Negative
36.16
Price Trends
36.53
Negative
36.27
Negative
36.21
Negative
Market Momentum
-0.16
Positive
43.16
Neutral
32.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AW, the sentiment is Negative. The current price of 36.16 is below the 20-day moving average (MA) of 36.37, below the 50-day MA of 36.53, and below the 200-day MA of 36.21, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 43.16 is Neutral, neither overbought nor oversold. The STOCH value of 32.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AW.
A & W Food Services of Canada Inc. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$52.29B | 19.55 | 34.86% | 3.09% | 5.56% | 38.79% | |
67 Neutral | C$401.26M | 13.04 | 10.09% | 7.50% | -0.69% | -2.98% | |
66 Neutral | C$863.85M | 15.81 | 24.98% | 5.33% | -1.57% | 218.18% | |
65 Neutral | C$801.05M | 7.13 | 13.22% | 4.11% | -1.60% | 194.60% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
TSE:AW
A & W Food Services of Canada Inc.
36.04
-0.30
-0.84%
TSE:PZA
Pizza Pizza Royalty
11.87
-3.09
-20.63%
TSE:QSP.UN
Restaurant BrndLP
113.83
29.89
35.60%
TSE:MTY
MTY Food Group
35.07
-2.20
-5.89%
TSE:SBUX
Starbucks Corporation Shs -CAD hedged- Canadian Depositary Receipt Repr Shs Reg S
28.66
5.69
24.76%
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.