Canada's ATS beats Q3 revenue estimates on growth in consumer products, energy sectors

Overview

• Canada automation solutions provider's fiscal Q3 revenue rose 16.7%, beating analyst expectations

• Net income for fiscal Q3 increased significantly to C$30 million

• Order bookings for fiscal Q3 decreased by 7% year-over-year

Outlook

• ATS expects Q4 revenues between C$710 mln and C$750 mln

• Company sees strong funnel activity in life sciences and energy sectors

• ATS aims for margin expansion despite inflationary pressures and tariffs

Result Drivers

• ORGANIC REVENUE GROWTH - Co reported 12.6% increase in organic revenues, driven by growth in consumer products and energy sectors

• FOREIGN EXCHANGE IMPACT - Positive foreign exchange translation contributed 4.1% to revenue growth

• CONSUMER PRODUCTS GROWTH - Revenue from consumer products rose 57.4% due to organic growth and warehouse packaging automation projects

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

• Wall Street's median 12-month price target for ATS Corp is C$49.50, about 27.8% above its February 3 closing price of C$38.73

• The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 18 three months ago

Press Release: ID:nBw6kkSGka

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