CAE Inc. Ordinary Shares (CAE)

FairStock Score: 36/100 — MIXED

Key Financials

Strengths

• Generates $484 million in annual free cash flow (5.9% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Established organization with 13,000 employees providing operational scale

Concerns

• Altman Z-Score of 1.3 places it in the financial distress zone—elevated bankruptcy risk
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

CAE Inc. Ordinary Shares is a small-cap industrials company valued at $8.2 billion. The business generates $4.9 billion in annual revenue with a 2.2% net margin and $484 million in free cash flow. From a quality standpoint, CAE shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 1.3 warrants caution. On valuation, the stock is trading at a premium 29.2x earnings, with trades above its Graham Number with a negative 43% margin. Growth dynamics show revenue growing at 2.4% and profit growth of -35.4%. Our composite FairStock Score of 36/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $484 million in annual free cash flow (5.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer