CAE Inc. Fundamental Analysis
CAE Inc. (CAE) shows weak financial fundamentals with a PE ratio of 36.31, profit margin of 6.37%, and ROE of 6.12%. The company generates $4.9B in annual revenue with moderate year-over-year growth of 9.93%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CAE's fundamental strength across five key dimensions:
Efficiency Score
WeakCAE struggles to generate sufficient returns from assets.
Valuation Score
ModerateCAE shows balanced valuation metrics.
Growth Score
ModerateCAE shows steady but slowing expansion.
Financial Health Score
ModerateCAE shows balanced financial health with some risks.
Profitability Score
WeakCAE struggles to sustain strong margins.
Key Financial Metrics
Is CAE Expensive or Cheap?
P/E Ratio
CAE trades at 36.31 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, CAE's PEG of -1.13 indicates potential undervaluation.
Price to Book
The market values CAE Inc. at 2.14 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 8.01 times EBITDA. This is generally considered low.
How Well Does CAE Make Money?
Net Profit Margin
For every $100 in sales, CAE Inc. keeps $6.37 as profit after all expenses.
Operating Margin
Core operations generate 13.98 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.12 in profit for every $100 of shareholder equity.
ROA
CAE Inc. generates $2.80 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
CAE Inc. produces operating cash flow of $760.67M, showing steady but balanced cash generation.
Free Cash Flow
CAE Inc. produces free cash flow of $462.26M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.44 in free cash annually.
FCF Yield
CAE converts 4.06% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
36.31
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.13
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.14
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.31
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.61
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.96
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How CAE Stacks Against Its Sector Peers
| Metric | CAE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 36.31 | 25.99 | Worse (Expensive) |
| ROE | 6.12% | 1259.00% | Weak |
| Net Margin | 6.37% | -34891.00% (disorted) | Weak |
| Debt/Equity | 0.61 | 0.74 | Neutral |
| Current Ratio | 0.96 | 9.71 | Weak Liquidity |
| ROA | 2.80% | -1482943.00% (disorted) | Weak |
CAE outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews CAE Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
8.30%
Industry Style: Cyclical, Value, Infrastructure
GrowingEPS CAGR
8.49%
Industry Style: Cyclical, Value, Infrastructure
GrowingFCF CAGR
37.08%
Industry Style: Cyclical, Value, Infrastructure
High Growth