ATS (NYSE:ATS) Announces Earnings Results, Beats Expectations By $0.04 EPS

ATS (NYSE:ATS) posted its earnings results on Wednesday. The company reported $0.34 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.30 by $0.04, Zacks reports. The firm had revenue of $553.81 million during the quarter, compared to the consensus estimate of $722.96 million. ATS had a net margin of 0.77% and a return on equity of 9.73%. The company’s revenue was up 16.7% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.32 EPS.

Here are the key takeaways from ATS’s conference call:

• New CEO Doug Wright is prioritizing ABM/lean execution, margin expansion and disciplined capital allocation, signaling a leadership change focused on operational improvement.
• Q3 results showed strong demand with order bookings of $821M, revenue of $761M (up 16.7% YoY), adjusted operating earnings of ~$80M, and a backlog of approximately $2.1B.
• End-market momentum is broadening — life sciences (Q3 revenues $391M, backlog $1.1B) remains a key growth driver while energy backlog hit a record (CAD 296M) and consumer/warehouse automation also posted record backlog levels.
• Gross margin fell to 29.6% (down 111 bps) due to program mix, the company increased restructuring charges to ~CAD 20M, and net debt/adj. EBITDA sits at ~3x, indicating near-term margin and cost-pressure risks.
• Management is embedding the services business into operating units to grow recurring, aftermarket revenue and says it will remain disciplined on M&A, targeting acquisitions that improve margins, aftermarket mix or core capabilities.

ATS Stock Performance

ATS stock traded up $0.78 during mid-day trading on Friday, reaching $30.09. The company’s stock had a trading volume of 77,016 shares, compared to its average volume of 156,757. The company has a current ratio of 1.63, a quick ratio of 1.34 and a debt-to-equity ratio of 0.84. ATS has a twelve month low of $20.90 and a twelve month high of $32.73. The business has a 50 day moving average price of $28.23 and a 200-day moving average price of $27.75. The firm has a market cap of $2.95 billion, a price-to-earnings ratio of 200.15 and a beta of 1.21.

Analyst Upgrades and Downgrades

A number of equities analysts have recently commented on ATS shares. Wall Street Zen raised shares of ATS from a “hold” rating to a “buy” rating in a research note on Saturday, January 17th. Weiss Ratings reiterated a “sell (d)” rating on shares of ATS in a report on Wednesday, January 21st. Scotiabank restated an “outperform” rating on shares of ATS in a research note on Thursday, January 29th. Zacks Research raised ATS from a “strong sell” rating to a “hold” rating in a research report on Tuesday, October 14th. Finally, JPMorgan Chase & Co. raised their target price on ATS from $33.00 to $35.00 and gave the company a “neutral” rating in a report on Friday, January 16th. Two research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of “Hold” and a consensus target price of $35.00.

Institutional Investors Weigh In On ATS

A number of institutional investors have recently modified their holdings of the business. Quarry LP acquired a new stake in ATS during the third quarter worth about $32,000. Raymond James Financial Inc. acquired a new position in ATS during the 2nd quarter valued at approximately $43,000. SkyView Investment Advisors LLC bought a new position in ATS during the 2nd quarter worth $237,000. Boothbay Fund Management LLC grew its stake in ATS by 52.4% during the 3rd quarter. Boothbay Fund Management LLC now owns 10,170 shares of the company’s stock worth $266,000 after buying an additional 3,496 shares during the last quarter. Finally, PenderFund Capital Management Ltd. acquired a new stake in ATS in the third quarter worth $523,000. Institutional investors own 75.84% of the company’s stock.

ATS Company Profile

ATS Corporation (NYSE: ATS) is a Canada-based global provider of automation and energy solutions. Headquartered in Cambridge, Ontario, the company specializes in the design, engineering and manufacturing of custom automation and test systems, as well as fluid handling and control products. Since its founding in 1978, ATS has focused on delivering integrated hardware and software solutions that help original equipment manufacturers (OEMs) improve efficiency, quality and throughput across a range of industries.

Through its Automation segment, ATS develops bespoke assembly and testing platforms for sectors such as life sciences, consumer electronics, automotive and industrial equipment.