Many stocks have been testing new highs in 2020, and one of the most notable is CAE Inc. (CAE). Currently, CAE is trading at $20.88 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $19.03.
To add more color to this target, the company’s high over the last year is $31.56 and the low is $9.80. Over the last 52 weeks, CAE is down -33.84% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, CAE reported a profit of $220.9 million. CAE Inc. also saw revenues increase to $699.83 million. In addition, CAE has free cash flow of $75.33 million as of 12-2019 The company’s EBITDA came in at $176.29 million which compares well with its peers.
CAE booked profit margins of 8.60%, its Return on Equity (ROE) is 13.20%, and its Return on Assets is 4.10%. All told, it is clear that, CAE needs to be on your watchlist.
About CAE Inc.
If readers are unfamiliar, CAE Inc., together with its subsidiaries, provides training solutions for the civil aviation, defence and security, and healthcare markets worldwide. The company’s Civil Aviation Training Solutions segment provides training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; flight simulation training devices; and ab initio pilot training and crew sourcing services. Its Defence and Security segment operates as a training systems integrator for defense forces in the air, land, and naval domains, as well as for government organizations responsible for public safety. The company’s Healthcare segment designs and manufactures simulators; offers audiovisual and simulation center management solutions; and develops courseware and offers services for training of medical, nursing, and allied healthcare students, as well as medical practitioners. It trains approximately 220,000 civil and defence crewmembers, including approximately 135,000 pilots and various healthcare professionals. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in June 1993. CAE Inc. was founded in 1947 and is headquartered in Saint-Laurent, Canada.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. CAE has a short ratio of 1.71 and outstanding shares of 266.06M.
CAE has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 0.73 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 0.86. CAE Inc. CAE also noted assets of $5.64 billion at the end of the last quarter. Investors should also keep an eye on sector updates as CAE has historically followed its peers on positive news.
All told, CAE Inc. CAE has strung together solid data and demonstrated underlying fundamentals. At its current valuation, CAE represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
CAE Inc. CAE is now commanding a market cap of 5.56B and a float of 263.41M. CAE is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of CAE stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in CAE, either long or short, and we have not been compensated for this article.