Scotiabank has adjusted its price target for ATS Corporation (ATS, Financial) stocks, increasing it from C$43 to C$46. The bank maintains its Sector Perform rating for the company. This adjustment reflects a positive outlook on the company's future performance.
ATS Key Business Developments
Release Date: May 28, 2025
- Order Bookings: $863 million in Q4, up 9% year-over-year; full-year bookings at $3.3 billion.
- Adjusted Revenues: $721 million in Q4, down 9% from the previous year.
- Adjusted Earnings from Operations: $74 million in Q4; $283 million for the full year.
- Order Backlog: Approximately $2.1 billion at the end of Q4.
- Book-to-Bill Ratio: 1.23:1 for the trailing 12 months.
- Gross Margin: 29% in Q4, a 90 basis point improvement from the previous year.
- SG&A Expenses: $133.9 million in Q4, an increase of $11.2 million year-over-year.
- Adjusted EPS: $0.41 in Q4.
- Cash Flows from Operating Activities: $39.3 million in Q4.
- CapEx and Intangible Investments: $29 million in Q4; $78.1 million for the full year.
- Net Debt to Adjusted EBITDA Ratio: 3.9 times at the end of Q4.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ATS Corp (ATS, Financial) reported a record order backlog of approximately $2.1 billion, the highest in the last 8 quarters, providing strong revenue visibility for fiscal 2026.
- The company achieved its finest bookings quarter in history, with order bookings for the quarter reaching $863 million, up 9% from the previous year.
- ATS Corp (ATS) demonstrated strong performance in its Life Sciences segment, with a robust opportunity funnel supported by market growth in key submarkets.
- The company successfully negotiated a settlement with an EV customer, resulting in a significant cash inflow that will reduce net debt and provide greater financial flexibility.
- ATS Corp (ATS) continues to expand its market reach and recurring revenue through strategic acquisitions, such as Paxiom and Heidolph, enhancing its product portfolio.
Negative Points
- Adjusted revenues for Q4 were down 9% year-over-year, primarily due to lower EV revenues, impacting overall financial performance.
- Geopolitical and trade tensions are creating an uncertain macroeconomic environment, which could potentially impact demand in some areas of ATS Corp (ATS)'s business.
- The transportation segment experienced lower revenue volumes, contributing to a 23% decline in adjusted earnings from operations in Q4 compared to the prior year.
- ATS Corp (ATS) faces challenges in managing working capital efficiency, particularly with the integration of recent acquisitions that are more working capital intensive.
- The company is navigating a complex tariff landscape, which requires ongoing efforts to mitigate risks and manage potential cost increases.
