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A & W Food Services of Canada Inc. (AW) AI Stock Analysis
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A & W Food Services of Canada Inc.
(TSX:AW)
The score is driven primarily by strong current profitability and steady free cash flow, balanced against elevated leverage that increases financial risk. Valuation is supportive with a moderate P/E and high dividend yield, while technicals are mildly constructive. Earnings-call commentary reinforces a positive operating trajectory and steady guidance, tempered by margin pressure and cost/consumer headwinds.
A & W Food Services of Canada Inc. (AW) vs. iShares MSCI Canada ETF (EWC)
- Market Cap
- CAD 868.17M
- Dividend Yield
- 5.30%
- Average Volume (3M)
- 9,882
- Price to Earnings (P/E)
- 15.3
- Beta (1Y)
- 0.40
- Revenue Growth
- 2.77%
- EPS Growth
- 101.33%
- Country
- Canada
- Employees
- 300
- Sector
- General
- Sector Strength
- 55
- Industry
- Restaurants
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, including...
A & W Food Services of Canada Inc. Earnings Call Summary
The call was broadly positive, with higher same-store sales, system sales, revenue, net income, adjusted EBITDA and free cash flow, continued restaurant and Pret expansion, deleveraging, maintained fiscal 2026 guidance and a new growth-oriented strategy. These strengths were partially offset by higher operating and general and administrative costs, adjusted EBITDA margin compression and ongoing consumer affordability and fuel-cost pressures.
Q3-2026 Updates
Positive Updates
Negative Updates
Company Guidance
For fiscal 2026, the outlook remains unchanged and includes achieving adjusted EBITDA within the range of $103 million to $105 million, up from the $100 million achieved in 2025; ending fiscal 2026 within the range of 1,112 to 1,120 A&W restaurants, up from 1,094 at the end of 2025; system sales growth in the range of 2.5% to 5% compared to 2.8% achieved in 2025; and same-store sales growth in the range of 0.5% to 3% compared to 1.2% achieved in 2025. A&W also continues to expect 3 to 4 franchise Pret shops to be opened by the end of fiscal 2026, in addition to the 2 corporate locations operated in Toronto, and remains committed to maintaining the current level of quarterly dividends for the foreseeable future.
A & W Food Services of Canada Inc. Financial Statement Overview
Summary
Operating performance is strong (TTM net margin ~18.6% with robust EBIT/EBITDA margins) and free cash flow is consistently positive (~$77M, close to net income). The main drag is balance-sheet risk: debt remains very high (~$900M) versus equity (~$225M), with debt-to-equity above 4x, which limits flexibility and amplifies downside if profitability softens.
Income Statement
78PositiveBalance Sheet
45NeutralCash Flow
70Positive| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 302.47M | 294.10M | 292.30M | 299.31M | 299.36M | 244.98M |
| Gross Profit | 142.72M | 143.56M | 248.26M | 244.45M | 131.52M | 69.51M |
| EBITDA | 109.64M | 100.54M | 72.42M | 76.26M | 62.58M | 35.66M |
| Net Income | 56.76M | 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 | 907.00K | 982.00K | 22.53M | 3.85M | 5.04M | 9.63M |
| Total Debt | 899.93M | 905.92M | 915.36M | 659.13M | 631.04M | 630.62M |
| Total Liabilities | 1.02B | 1.02B | 1.04B | 1.05B | 1.02B | 1.00B |
| Stockholders Equity | 225.40M | 221.81M | 163.68M | -211.93M | -216.58M | -146.81M |
Cash Flow | ||||||
| Free Cash Flow | 77.46M | 55.90M | 58.32M | 12.95M | 14.20M | 22.19M |
| Operating Cash Flow | 79.76M | 56.97M | 61.23M | 18.95M | 15.88M | 24.68M |
| Investing Cash Flow | -2.72M | -2.48M | -168.38M | 5.13M | -4.63M | 7.21M |
| Financing Cash Flow | -83.43M | -76.04M | 125.83M | -25.26M | -15.88M | -61.83M |
A & W Food Services of Canada Inc. Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AW, the sentiment is Positive. The current price of 36.22 is above the 20-day moving average (MA) of 35.87, above the 50-day MA of 35.77, and above the 200-day MA of 35.68, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 55.91 is Neutral, neither overbought nor oversold. The STOCH value of 76.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AW.
A & W Food Services of Canada Inc. Peers Comparison
Overall Rating
TSE:PZA81Outperform
TSE:QSP.UN73.3Outperform- TSE:AW68Neutral
TSE:MTY68Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| TSE:PZA | 81Outperform | CAD 352.58M | 11.46 | 10.09% | 8.34% | -0.69% | -2.98% |
| TSE:QSP.UN | 73Outperform | CAD 48.17B | 16.76 | 39.56% | 3.38% | 4.80% | 51.81% |
| TSE:AW | 68Neutral | CAD 866.46M | 15.28 | 25.64% | 5.30% | 2.77% | 101.33% |
| TSE:MTY | 68Neutral | CAD 741.43M | 6.79 | 12.54% | 4.44% | -3.60% | 234.75% |
| Sector * | 55Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| TSE:AW | A & W Food Services of Canada Inc. | 36.22 | 1.69 | 4.89% | |
| TSE:PZA | Pizza Pizza Royalty | 10.43 | -4.03 | -27.85% | |
| TSE:QSP.UN | Restaurant BrndLP | 105.67 | 15.64 | 17.37% | |
| TSE:MTY | Mty Food Group | 32.46 | -0.36 | -1.10% | |
| TSE:SBUX | Starbucks Corporation Shs -CAD hedged- Canadian Depositary Receipt Repr Shs Reg S | 28.36 | 5.39 | 23.45% |
A & W Food Services of Canada Inc. Corporate Events
A&W Posts Q3 Growth and Unveils New Strategy for Canada’s QSR Market
PositiveA&W reported continued growth in its third quarter of fiscal 2026, with system sales up 3.8% to $497.6 million and same-store sales advancing 1.8%, helped by a national smash-style burger promotion. Revenue rose 11% to $79.3 million and income be...
A&W Sets October 16 Date for Fiscal Q3 2026 Results and Investor Call
NeutralA&W Food Services of Canada Inc. will release its financial results for the third quarter of fiscal 2026 before markets open on Friday, October 16, 2026. The disclosure continues the company’s regular reporting cadence, offering investors a...
A&W Food Services Declares Quarterly Cash Dividend of $0.48 per Share
PositiveA&W Food Services of Canada Inc., a leading Canadian quick-service hamburger chain with coast-to-coast operations and signature products like The Burger Family and A&W Root Beer, is listed on the Toronto Stock Exchange under the ticker AW. Th...
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.
Date of analysis: Oct 17, 2026