TransAlta Corporation Ordinary Shares (TAC)

FairStock Score: 23/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital and carry modest debt. TransAlta is an independent power producer with hydro, wind and solar, gas, energy transition, and energy marketing operations. Its hydro assets (about 922 MW) and net wind/solar ownership (about 2,587 MW) are long-lived power assets that may offer some barriers to entry, but the numbers show weak returns. At the 2026-10-13 close of $13.22, FairStock calculations show a P/E of -60.09, P/B of 6.92, ROE of -1.42%, ROCE of only 2.35%, and debt-to-equity of 2.29. The Altman Z-Score of -0.05 points to balance-sheet stress, and the FairStock Score is 23/100. Still, trailing free cash flow of $444M against a $3.6B market cap gives a 12.4% free cash flow yield, and EV/EBITDA is 9.86. In fiscal Q2 2026, revenue was $487.0M and net income was $49.0M, a 10.06% margin—positive, but not enough to offset trailing losses. The Piotroski F-Score of 7/9 suggests some improvement, while the 1.65% dividend yield and 0.46 beta make the shares defensive. Graham would ask for a margin of safety; the cash flow yield offers some, but leverage and weak returns mean the asset quality does not fully compensate. I see a leveraged turnaround, not a clear bargain.

In plain English: TransAlta makes and sells electricity using water, wind, solar, and gas power. The business is generating cash, and its latest quarter showed a profit, but its overall yearly earnings are still negative and it carries a lot of debt. At $13.22, the stock looks cheaper than some measures suggest because of strong cash flow, but the weak profits and high debt mean it is not clearly a bargain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer