Last Updated: 16 Sep 2024
Executive Summary
CAE Inc. (NYSE: CAE) is a global leader in providing simulation equipment and training solutions to the defense, aviation, and healthcare industries. The company has a strong financial position with a market capitalization of $5.67 billion and an EBITDA of $713.1 million. However, the company's earnings have been volatile in recent quarters, and the stock price has underperformed the broader market.
Company Overview
CAE Inc. was founded in 1947 and is headquartered in Saint-Laurent, Canada. The company designs, manufactures, and supplies simulation equipment and training solutions for a variety of industries, including defense, aviation, and healthcare. CAE has a global presence with operations in over 30 countries.
Fundamental Analysis
CAE's financial performance has been mixed in recent years. The company's revenue has grown steadily, but its earnings have been volatile. In the most recent quarter, CAE reported a loss per share of $0.79, compared to earnings per share of $0.14 in the same quarter last year. The company's profit margin has also declined in recent quarters, from 10.2% in 2021 to -7.39% in the most recent quarter.
CAE's balance sheet is strong, with a debt-to-equity ratio of 0.33. The company has $1.1 billion in cash and equivalents and $1.5 billion in long-term debt. CAE's free cash flow was $207.6 million in the most recent quarter.
Technical Analysis
CAE's stock price has been in a downtrend since early 2022. The stock price is currently trading at $17.8, which is below its 50-day and 200-day moving averages. The relative strength index (RSI) is currently at 30.0, which indicates that the stock is oversold.
Short Term Outlook
CAE's short-term outlook is uncertain. The company's earnings have been volatile in recent quarters, and the stock price has underperformed the broader market. The stock price is currently trading at a discount to its intrinsic value, but it is unclear whether the stock price will rebound in the near term.
Long Term Outlook
CAE's long-term outlook is positive. The company is a leader in the simulation and training industry, and it has a strong financial position. The company's revenue is expected to grow in the long term, and its earnings are expected to improve as the company executes on its cost-cutting initiatives.
Analyst Recommendations
The consensus analyst recommendation for CAE is "hold." Four analysts have a "buy" rating on the stock, four analysts have a "hold" rating, and one analyst has a "sell" rating. The average analyst price target is $20.96.
