tiprankstipranks
Calian Group Ltd. (TSE:CGY)
TSX:CGY
Canadian Market

Calian Group Ltd. (CGY) AI Stock Analysis

Compare
102 Followers

Top Page

TS

Calian Group Ltd.

(TSX:CGY)

69Neutral
Calian Group Ltd. shows robust revenue and cash flow growth, supported by strategic defense expansions and a solid balance sheet. However, high P/E ratio, declining margins, and bearish technical indicators present challenges. The reaffirmed guidance and strategic corporate events indicate confidence in overcoming these issues, resulting in a moderately positive outlook.

Calian Group Ltd. (CGY) vs. S&P 500 (SPY)

Calian Group Ltd. Business Overview & Revenue Model

Company DescriptionCalian Group Ltd. (CGY) is a diversified professional services company headquartered in Canada. The company operates across various sectors, including healthcare, IT and cyber solutions, learning, and advanced technologies. Calian provides a wide range of services and solutions, such as healthcare staff augmentation, custom training programs, IT and cyber security services, and engineering solutions for space, defense, and communication sectors.
How the Company Makes MoneyCalian Group Ltd. generates revenue through a diverse portfolio of services across its four main divisions. The healthcare segment provides staffing and management services to healthcare facilities, generating income through contracts with government and private sector clients. The IT and cyber solutions division offers consulting, managed services, and cybersecurity solutions, earning revenue from service fees and long-term contracts. The learning division provides custom training and education services for both private and public sector clients, including e-learning and traditional training programs. Lastly, the advanced technologies division focuses on providing engineering solutions and products for sectors like defense, aerospace, and communications, deriving income from product sales and development contracts. Calian's diverse client base and long-term contracts contribute significantly to its stable revenue streams.

Calian Group Ltd. Financial Statement Overview

Summary
Calian Group Ltd. demonstrates strong growth potential with significant revenue and cash flow improvements. However, the decline in profit margins and return on equity reflects areas that need addressing to enhance profitability and investor returns. The financial position is supported by a solid balance sheet with manageable debt levels, providing a stable foundation for future growth.
Income Statement
75
Positive
Calian Group Ltd. shows solid revenue growth with a 28.8% increase from 2022 to 2024 TTM, indicating strong business expansion. Gross profit margin for the TTM stands at 31.1%, reflecting efficient cost management. However, net profit margin decreased to 0.6%, indicating increased expenses or other financial pressures. The EBIT margin of 4.4% and EBITDA margin of 7.8% suggest moderate profitability.
Balance Sheet
70
Positive
The company's debt-to-equity ratio of 0.49 in TTM indicates a balanced approach to leveraging debt, and an equity ratio of 44.8% suggests a strong equity base. However, return on equity has decreased to 1.4%, reflecting potential challenges in generating returns from equity investments.
Cash Flow
80
Positive
Operating cash flow is robust at CAD 74.1 million in TTM, with a healthy free cash flow of CAD 63.5 million. The free cash flow to net income ratio is strong, highlighting effective cash conversion. While free cash flow growth has been positive, the operating cash flow to net income ratio indicates some disparity between cash generation and reported earnings.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
752.48M746.61M658.58M582.17M518.40M432.32M
Gross Profit
233.69M254.01M204.21M169.23M126.74M89.16M
EBIT
33.20M43.71M37.57M30.46M28.85M25.90M
EBITDA
58.47M70.78M59.27M56.06M37.59M38.79M
Net Income Common Stockholders
4.68M11.18M18.89M13.60M11.15M20.36M
Balance SheetCash, Cash Equivalents and Short-Term Investments
59.80M51.79M33.73M42.65M78.61M24.23M
Total Assets
726.67M707.92M585.72M547.16M457.97M331.05M
Total Debt
160.73M129.19M74.76M26.54M17.48M19.59M
Net Debt
100.94M77.41M41.02M-16.11M-61.13M-4.64M
Total Liabilities
401.04M381.17M257.35M241.98M165.61M130.65M
Stockholders Equity
325.64M326.75M328.37M305.19M292.36M200.41M
Cash FlowFree Cash Flow
63.53M75.42M48.34M35.82M38.69M-8.55M
Operating Cash Flow
74.06M87.22M56.77M43.14M46.54M-2.75M
Investing Cash Flow
-62.16M-99.67M-79.62M-72.89M-56.61M-35.19M
Financing Cash Flow
-3.13M30.50M13.94M-6.21M64.44M45.04M

Calian Group Ltd. Technical Analysis

Technical Analysis Sentiment
Negative
Last Price40.50
Price Trends
50DMA
46.33
Negative
100DMA
47.18
Negative
200DMA
48.60
Negative
Market Momentum
MACD
-1.86
Positive
RSI
34.06
Neutral
STOCH
28.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CGY, the sentiment is Negative. The current price of 40.5 is below the 20-day moving average (MA) of 42.10, below the 50-day MA of 46.33, and below the 200-day MA of 48.60, indicating a bearish trend. The MACD of -1.86 indicates Positive momentum. The RSI at 34.06 is Neutral, neither overbought nor oversold. The STOCH value of 28.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CGY.

Calian Group Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$8.54B11.3438.85%3.74%3.76%14.27%
TSMDA
79
Outperform
C$3.41B42.267.09%33.74%61.09%
TSCAE
72
Outperform
$10.93B-5.31%1.44%-183.14%
TSCGY
69
Neutral
C$469.99M101.781.43%2.79%9.02%-76.61%
TSCVE
67
Neutral
$34.69B11.3310.88%3.75%3.97%-22.22%
TSBCE
67
Neutral
$32.30B194.671.53%11.96%-1.07%-91.94%
62
Neutral
$8.17B12.760.49%3.07%3.84%-16.79%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CGY
Calian Group Ltd.
40.50
-16.53
-28.98%
TSE:CAE
CAE
34.10
7.12
26.39%
TSE:CVE
Cenovus Energy
18.85
-5.62
-22.96%
TSE:BCE
BCE
35.16
-8.28
-19.06%
TSE:QBR.B
Quebecor
36.41
6.12
20.22%
TSE:MDA
MDA Ltd
27.24
13.12
92.92%

Calian Group Ltd. Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -17.98% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
Calian Group's earnings call reflected a balance of achievements and challenges. The company reported record-breaking revenue and a strong backlog, driven by significant defense contract wins and strategic expansions. However, these positives were tempered by a decline in organic growth, decreased adjusted EBITDA, and a net loss due to non-cash charges. Despite these challenges, the company reaffirmed its financial guidance for FY2025, suggesting confidence in future performance.
Highlights
Record-Breaking Revenue and Growth
Revenues on a trailing 12-month basis surpassed $750 million for the first time, marking a 9% increase against the previous 12 months.
New Contract Wins and Backlog
Calian signed new gross contracts valued at $154 million and ended the quarter with a solid backlog of $1.1 billion.
Defense Market Opportunities
Calian secured over $50 million in new and renewed multiyear defense contracts in Q1, highlighting ongoing demand for mission-critical defense solutions.
Strategic Appointments and Expansion
Appointment of retired Major-General Roch Pelletier and the launch of a U.S. subsidiary focused on U.S. federal government and defense opportunities.
Financial Guidance Reaffirmed
The company maintains its guidance for FY2025 with expected revenues in the range of $800 million to $880 million, and adjusted EBITDA in the range of $96 million to $106 million.
Lowlights
Organic Growth Decline
Organic growth was down 5% as growth in the defense market was offset by reductions in domestic defense training and delays in large programs in space and commercial IT infrastructure.
Adjusted EBITDA Decrease
Adjusted EBITDA decreased to $18 million from $21 million last year, with margin dropping to 9.6% from 11.9%, due to revenue mix and investments in sales capacity.
Net Loss Due to Non-Cash Charges
The company posted a net loss of $1 million due to non-cash accounting charges.
Company Guidance
In the Calian Group's first quarter 2025 earnings call, the company provided guidance indicating a strong strategic focus on their defense solutions, which accounted for 44% of consolidated revenues in fiscal 2024. Revenue on a trailing 12-month basis reached $752 million, up 9% from the previous period, with Q1 revenues at a record $185 million, reflecting a 3% increase. The company signed new contracts worth $154 million, boasting a backlog of $1.1 billion. Despite some project delays, Calian maintained its fiscal 2025 guidance, projecting revenues between $800 million and $880 million. The adjusted EBITDA is expected to range from $96 million to $106 million, maintaining a double-digit growth trajectory. Calian emphasized the ongoing demand for its defense solutions amid global geopolitical tensions and highlighted strategic hires and geographical expansions, particularly in the U.S. defense market, to bolster its growth.

Calian Group Ltd. Corporate Events

Stock BuybackBusiness Operations and Strategy
Calian Group Ltd. Boosts Share Repurchase Strategy Amid Market Undervaluation
Positive
Mar 12, 2025

Calian Group Ltd. announced plans to increase its share repurchases through block trades, aiming to buy back approximately 250,000 shares worth around $10 million. This decision comes as the company experiences a share price at five-year lows despite consecutive record years of revenue and adjusted EBITDA. Calian’s CEO, Kevin Ford, emphasized the company’s growth potential and the market’s underestimation of its opportunities in defense, space, and healthcare sectors. The move is part of Calian’s strategy to enhance shareholder value and align with its M&A agenda, which remains a top priority for capital allocation.

Executive/Board ChangesShareholder Meetings
Calian Group Ltd. Announces Director Election Results
Positive
Feb 14, 2025

Calian Group Ltd. announced the results of the election of directors during their Annual Meeting of Shareholders held on February 13, 2025. The voting results showed strong support for the nominees, with Josh Blair, Kevin Ford, and other directors receiving high approval ratings. This announcement underscores Calian’s commitment to maintaining a robust leadership team, which is crucial for its strategic operations and market positioning.

Business Operations and StrategyFinancial Disclosures
Calian Group Reports Record Q1 Revenue Amid Strategic Expansion
Neutral
Feb 13, 2025

Calian Group Ltd. reported a 3% increase in first-quarter revenue to $185 million, marking its highest first-quarter revenue on record. Despite this growth, adjusted EBITDA fell by 17% to $18 million, influenced by changes in revenue mix and increased sales and delivery investments. The company also announced the formation of a new U.S. subsidiary to focus on government and defense sectors, highlighting its strategic focus on expanding its footprint in these areas amidst rising global defense demands.

Business Operations and StrategyFinancial Disclosures
Calian Group Hits Record Q1 Revenue Amid Global Defence Demand
Neutral
Feb 13, 2025

Calian Group Ltd. reported its highest first-quarter revenue on record with a 3% increase to $185 million, despite a decline in organic growth offset by acquisitions. The company faces a reduction in profitability due to increased operational expenses and amortization charges, but remains optimistic about its future prospects, driven by global demand for defence solutions and potential increased military investment in Canada.

Business Operations and Strategy
Calian Group Secures Over $50M in Defense Contracts for 2025
Positive
Feb 6, 2025

Calian Group Ltd. announced securing over $50 million in new and renewed multi-year defense contracts in Q1 of fiscal 2025, reflecting the increasing demand for global security and operational readiness solutions. The contracts include providing operational readiness training for NATO, highlighting Calian’s role in enhancing military preparedness and strengthening its industry positioning, thereby reinforcing its commitment to delivering mission-critical solutions for military forces worldwide.

Financial Disclosures
Calian Group Ltd. Schedules Conference Call for Q1 FY 2025 Results
Neutral
Jan 30, 2025

Calian Group Ltd. announced it will hold a conference call on February 13, 2025, to discuss its first quarter FY 2025 results, covering the period ending December 31, 2024. The call is open to financial and media participants, and highlights the company’s ongoing commitment to transparency and stakeholder engagement.

Executive/Board ChangesBusiness Operations and Strategy
Calian Group Expands Defence Leadership with Strategic Appointment
Positive
Jan 23, 2025

Calian Group Ltd. has appointed Major-General (Ret.) Roch Pelletier as Regional Vice President of Global Defence & Security for Europe, the U.K., and NATO. This strategic move aims to enhance Calian’s defence business by leveraging increased global military spending and the demand for advanced technologies, strengthening partnerships, and enhancing operational support. Major-General Pelletier’s extensive experience in national defence strategy and international collaboration is expected to advance Calian’s IT, cybersecurity, and advanced training capabilities, aligning with global priorities on defence modernization and NATO collaboration.

Calian US Expands Leadership to Boost Communication Solutions
Dec 16, 2024

Calian US, Inc. has strengthened its leadership team by appointing Tony Rayner as Chief Operating Officer and Paul Attner as Senior Vice President of U.S. Government Services. These strategic additions aim to bolster Calian US’s capabilities in providing cutting-edge communication solutions, particularly to the U.S. government, leveraging the expertise and resources of its parent company, Calian Group Ltd. The company is also set to introduce innovative products like a ‘monitoring-as-a-service’ product for RF signal management, further enhancing its service offerings.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.