Earlier today, Cargojet (TSE: CJT) (OTC: CGJTF), a Canadian air transportation services company, reported its Q3-2022 financial results, which missed revenue expectations but beat earnings-per-share (EPS) expectations.
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CJT’s revenue reached C$232.7 million compared to the consensus estimate of about C$244.6 million, representing a 22.8% growth rate.
CJT’s adjusted earnings per share were C$2.18, up 56.8% year-over-year. Additionally, the company’s gross profit margin was 57.6% compared to 54% last year.
However, CJT’s adjusted free cash flow came in at C$47.9 million for the quarter, falling by 6.3%, and its adjusted return on invested capital (ROIC) fell to 12.7% from 16.1% in the same period last year. Nonetheless, free cash flow fell mainly due to higher maintenance capital expenditures, as cash from operations actually grew from C$63.7 million to C$77.9 million. Also, 12.7% is still a solid ROIC.
Overall, CJT is well-positioned for the future. CEO Ajay Virmani stated, “Over the past several years, Cargojet has evolved its business model that is increasingly based on strategic partnerships rather than transactional relationships with its customers. By aligning our long-term commercial interests, we expect greater endurance of volumes with our strategic customers even if global volumes soften during a recessionary period.”
The company recently released its financial targets for 2026, implying solid growth ahead.
Is Cargojet Stock a Buy, According to Analysts?
According to analysts, Cargojet stock earns a Strong Buy consensus rating based on four Buys and one Hold assigned in the past three months. The average Cargojet stock price forecast of C$202.80 implies 52.15% upside potential. Analyst price targets range from a high of C$274 to a low of C$165.
Conclusion: Cargojet’s Results Were Mixed but Still Solid
While Cargojet missed revenue expectations and saw free cash flow and ROIC drop, its EPS beat expectations, and its gross profit margin expanded. The company is experiencing solid growth in both revenue and earnings and has forecasted notable growth until 2026. Additionally, analysts are bullish, making the stock worth considering.
