Canadian Pacific Kansas City Ltd.
Canadian Pacific Kansas City Ltd. Fundamental Analysis
Canadian Pacific Kansas City Ltd. (CP) shows moderate financial fundamentals with a PE ratio of 26.13, profit margin of 27.21%, and ROE of 10.30%. The company generates $14.8B in annual revenue with moderate year-over-year growth of 3.66%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 50.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze CP's fundamental strength across five key dimensions:
Efficiency Score
WeakCP struggles to generate sufficient returns from assets.
Valuation Score
WeakCP trades at a premium to fair value.
Growth Score
ModerateCP shows steady but slowing expansion.
Financial Health Score
ModerateCP shows balanced financial health with some risks.
Profitability Score
ModerateCP maintains healthy but balanced margins.
Key Financial Metrics
Is CP Expensive or Cheap?
P/E Ratio
CP trades at 26.13 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, CP's PEG of 2.31 indicates potential overvaluation.
Price to Book
The market values Canadian Pacific Kansas City Ltd. at 3.19 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 10.62 times EBITDA. This signals the market has high growth expectations.
How Well Does CP Make Money?
Net Profit Margin
For every $100 in sales, Canadian Pacific Kansas City Ltd. keeps $27.21 as profit after all expenses.
Operating Margin
Core operations generate 37.04 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.30 in profit for every $100 of shareholder equity.
ROA
Canadian Pacific Kansas City Ltd. generates $6.47 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Canadian Pacific Kansas City Ltd. generates strong operating cash flow of $5.08B, reflecting robust business health.
Free Cash Flow
Canadian Pacific Kansas City Ltd. generates strong free cash flow of $2.02B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.28 in free cash annually.
FCF Yield
CP converts 1.94% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
26.13
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.31
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.19
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.04
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.52
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.67
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How CP Stacks Against Its Sector Peers
| Metric | CP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 26.13 | 25.86 | Neutral |
| ROE | 10.30% | 1270.00% | Weak |
| Net Margin | 27.21% | -33745.00% (disorted) | Strong |
| Debt/Equity | 0.52 | 0.74 | Strong (Low Leverage) |
| Current Ratio | 0.67 | 10.46 | Weak Liquidity |
| ROA | 6.47% | -1496704.00% (disorted) | Weak |
CP outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Canadian Pacific Kansas City Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
44.61%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
25.29%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
40.11%
Industry Style: Cyclical, Value, Infrastructure
High Growth