Aritzia Inc. Fundamental Analysis (TSX: ATZ.TO)
Aritzia Inc. (TSX: ATZ.TO) shows moderate financial fundamentals with a PE ratio of 34.62, profit margin of 11.45%, and ROE of 34.33%. The company generates $3.4B in annual revenue with strong year-over-year growth of 17.40%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 72.0/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ATZ.TO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentATZ.TO demonstrates superior asset utilization.
Valuation Score
ModerateATZ.TO shows balanced valuation metrics.
Growth Score
ModerateATZ.TO shows steady but slowing expansion.
Financial Health Score
ExcellentATZ.TO maintains a strong and stable balance sheet.
Profitability Score
ModerateATZ.TO maintains healthy but balanced margins.
Key Financial Metrics
Is ATZ.TO Expensive or Cheap?
P/E Ratio
ATZ.TO trades at 34.62 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ATZ.TO's PEG of 0.37 indicates potential undervaluation.
Price to Book
The market values Aritzia Inc. at 11.13 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.27 times EBITDA. This signals the market has high growth expectations.
How Well Does ATZ.TO Make Money?
Net Profit Margin
For every $100 in sales, Aritzia Inc. keeps $11.45 as profit after all expenses.
Operating Margin
Core operations generate 14.92 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $34.33 in profit for every $100 of shareholder equity.
ROA
Aritzia Inc. generates $14.16 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Aritzia Inc. produces operating cash flow of $675.21M, showing steady but balanced cash generation.
Free Cash Flow
Aritzia Inc. generates strong free cash flow of $429.31M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.46 in free cash annually.
FCF Yield
ATZ.TO converts 3.92% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.62
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.37
vs 25 benchmark
P/B Ratio
Price to book value ratio
11.13
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.32
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.76
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.39
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.34
vs 25 benchmark
ROA
Return on assets percentage
0.14
vs 25 benchmark
ROCE
Return on capital employed
0.25
vs 25 benchmark
How ATZ.TO Stacks Against Its Sector Peers
| Metric | ATZ.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.62 | 27.01 | Worse (Expensive) |
| ROE | 34.33% | 869.00% | Weak |
| Net Margin | 11.45% | -3029.00% (disorted) | Strong |
| Debt/Equity | 0.76 | 0.59 | Weak (High Leverage) |
| Current Ratio | 1.39 | 2.44 | Neutral |
| ROA | 14.16% | 324.00% | Weak |
ATZ.TO outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Aritzia Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
164.66%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
117.40%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
94.47%
Industry Style: Cyclical, Growth, Discretionary
High Growth