ONEX Corporation (ONEX) AI Stock Analysis

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ONEX Corporation

(TSX:ONEX)

56Neutral

ONEX Corporation's overall stock score reflects a stable financial foundation but highlights challenges in income and cash flow stability. Despite strong performance and fundraising successes in certain segments, bearish technical indicators and limited dividend yield constrain the potential upside. Optimism from earnings calls and successful corporate events provide some balance to the risks.

ONEX Corporation (ONEX) vs. S&P 500 (SPY)

Market Cap

C$6.69B

Dividend Yield0.42%

Average Volume (3M)196.56K

Price to Earnings (P/E)17.4

Beta (1Y)0.86

Revenue Growth-17.78%

EPS Growth-41.13%

CountryCA

Employees373

SectorFinancial

Sector Strength79

IndustryAsset Management

Share Statistics

EPS (TTM)5.43

Shares Outstanding70,359,890

10 Day Avg. Volume197,203

30 Day Avg. Volume196,559

Financial Highlights & Ratios

PEG Ratio0.40

Price to Book (P/B)N/A

Price to Sales (P/S)2472.88

Price to Cash Flow (P/CF)19.90

P/FCF Ratio19.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$137.00

Price Target Upside44.21% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

ONEX Corporation Business Overview & Revenue Model

Company DescriptionOnex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.

How the Company Makes MoneyONEX Corporation generates revenue through management fees and carried interest from its private equity and credit investments. The company earns management fees from overseeing and managing the assets within its investment funds. Additionally, ONEX benefits from carried interest, which is a share of the profits from investments made by its funds, contingent upon achieving a minimum return threshold. ONEX also earns returns on its proprietary investments made alongside its funds, further contributing to its revenue. The firm's earnings are influenced by successful investment strategies, market conditions, and its ability to grow its assets under management through strategic partnerships and acquisitions.

ONEX Corporation Financial Statement Overview

Summary

ONEX Corporation presents a mixed financial picture. While the balance sheet is stable with a strong equity base and manageable leverage, the income statement shows significant revenue fluctuations and declining profitability. Cash flow generation is inconsistent, posing challenges in converting income to cash consistently.

Income Statement

Neutral

ONEX Corporation has experienced significant revenue fluctuations, with a sharp decline in the most recent year. The gross profit margin is healthy at approximately 66.6%, but the EBIT margin is notably absent, indicating potential operational challenges. Net income dropped significantly, impacting the net profit margin. Overall, the income statement reflects volatility and declining profitability.

Balance Sheet

Positive

The balance sheet is relatively stable with a strong equity base. The debt-to-equity ratio is manageable at approximately 0.62, indicating moderate leverage. The equity ratio stands at 60.3%, suggesting financial stability. However, a slight increase in total debt could pose a future risk.

Cash Flow

Neutral

Cash flow generation is inconsistent, with a recent positive free cash flow growth rate. The operating cash flow to net income ratio is low, indicating potential issues in converting income to cash. Although free cash flow turned positive, historical volatility suggests ongoing cash management challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
647.00M	1.12B	437.00M	2.03B	1.14B
	Gross Profit
431.00M	908.00M	163.00M	1.74B	917.00M
	EBIT
0.00	789.00M	242.00M	1.41B	835.00M
	EBITDA
331.00M	569.00M	302.00M	1.47B	892.00M
	Net Income Common Stockholders
303.00M	529.00M	235.00M	1.41B	730.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
929.00M	265.00M	161.00M	790.00M	706.00M
	Total Assets
13.96B	12.90B	12.16B	12.89B	11.87B
	Total Debt
5.20B	3.94B	3.56B	3.83B	4.12B
	Net Debt
4.27B	3.67B	3.45B	3.28B	3.41B
	Total Liabilities
5.54B	4.33B	3.91B	4.51B	4.63B
	Stockholders Equity
8.42B	8.56B	8.25B	8.37B	7.24B
Cash Flow		Free Cash Flow
174.00M	60.00M	-392.00M	361.00M	381.00M
	Operating Cash Flow
174.00M	68.00M	-384.00M	361.00M	382.00M
	Investing Cash Flow
38.00M	55.00M	234.00M	-55.00M	-9.00M
	Financing Cash Flow
453.00M	30.00M	-282.00M	-465.00M	-657.00M

ONEX Corporation Technical Analysis

Technical Analysis Sentiment

Negative

Last Price95.00

Price Trends

50DMA

102.72

Negative

100DMA

107.92

Negative

200DMA

101.93

Negative

Market Momentum

MACD

-2.13

Negative

RSI

46.69

Neutral

STOCH

42.13

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ONEX, the sentiment is Negative. The current price of 95 is below the 20-day moving average (MA) of 96.63, below the 50-day MA of 102.72, and below the 200-day MA of 101.93, indicating a bearish trend. The MACD of -2.13 indicates Negative momentum. The RSI at 46.69 is Neutral, neither overbought nor oversold. The STOCH value of 42.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ONEX.

ONEX Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IAG	70 Outperform	C$11.78B	12.87	13.26%	2.72%	-17.69%	29.19%
BAM	68 Neutral	C$109.21B	37.76	20.07%	3.29%	27.17%	16.13%
Sector *	64 Neutral	$13.46B	9.44	9.34%	4.72%	16.14%	-8.80%
ONEX	56 Neutral	C$6.69B	17.39	3.54%	0.42%	-17.78%	-41.13%

* Financial Sector Average

Performance Comparison

TSE:ONEX

ONEX Corporation

87.25

-9.03

-9.38%

MFC

Manulife Financial

27.30

5.06

22.75%

FRFHF

Fairfax Financial Holdings

1,387.01

326.29

30.76%

TSE:IAG

iA Financial Corporation Inc

120.28

40.74

51.22%

CIXXF

CI Financial

21.90

10.34

89.45%

TSE:BAM

Brookfield Asset Management Ltd. Class A

64.40

11.93

22.74%

ONEX Corporation Earnings Call Summary

Earnings Call Date: Feb 21, 2025 | % Change Since: -13.64% | Next Earnings Date: May 9, 2025

Earnings Call Sentiment Positive

Onex had a strong performance in 2024, especially in its credit and structured credit segments, with significant capital return and fundraising successes. However, challenges in healthcare and consumer sectors, along with foreign exchange impacts and modest FRE losses, indicate areas to monitor. Overall, the company remains optimistic about growth opportunities in 2025.

Highlights

Significant Fundraising Success

Onex raised $1.5 billion across its private equity platforms in 2024, with strategic co-investment partnerships helping expand the client base. Additionally, Onex Partners completed fundraising for its Opportunities Fund, reaching $1.2 billion in commitments.

Return of Capital

OP and ONCAP returned over $3 billion of capital to investors, including $1 billion to Onex, which is 2.5 times more than what was achieved in 2023.

Structured Credit Growth

Onex ranked as the number seven issuer of global broadly syndicated CLOs, executing 30 transactions raising $13 billion of fee-generating AUM in 2024, with a 34% increase in fee-generating AUM over the last 12 months.

Share Repurchase Program

Onex completed a substantial issuer bid, repurchasing 2.3 million shares in Q4, bringing total repurchases for the year to 5.7 million shares. Over the last five years, Onex has repurchased approximately 28 million shares, reducing shares outstanding by almost 30%.

Strong Performance in Credit Investments

Credit investments delivered a $16 million net gain or a 2% return in Q4 and a 9% return for the year, driven by structured and opportunistic strategies.

Lowlights

Challenges in Healthcare and Consumer Companies

Returns were offset by challenging results in the healthcare and consumer sectors, impacting the overall performance.

Foreign Exchange Impact on PE Portfolio

Unfavorable foreign exchange from a strengthening U.S. dollar drove a mark-to-market loss of about $60 million on non-U.S. dollar investments.

Modest FRE Loss

A modest fee-related earnings loss of $1 million for Q4 was reported, with a $6 million contribution from the asset management platforms, indicating some challenges in reaching breakeven for non-credit operations.

Company Guidance

During the Onex Fourth Quarter Earnings Results Conference Call, the company provided guidance indicating strong performance across its platforms in 2024 and positive momentum for 2025. Onex's private equity team successfully returned over $3 billion of capital to investors, including $1 billion to Onex, a 2.5 times increase from 2023, while raising $1.5 billion in capital. The credit platform ranked as the seventh issuer of global broadly syndicated CLOs, executing 30 transactions and raising or extending $13 billion of fee-generating AUM. The company completed a substantial issuer bid, repurchasing 2.3 million shares, contributing to a total of 5.7 million shares repurchased in 2024. Onex ended the year with investing capital per share of $113.70, up 6% from the previous year, and maintained strong liquidity with $1.6 billion available. The structured credit business saw a 34% increase in fee-generating AUM over the last 12 months, contributing to a 45% increase in fee-related earnings for the year, with a run rate FRE contribution of $50 million at year-end. Looking ahead, Onex aims for further growth in 2025, with expectations to sustain positive fee-related earnings, particularly from the credit platform, and plans to remain active in share repurchases.

ONEX Corporation Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

ONCAP V Fund Closes with $1.3 Billion in Commitments, Boosting Onex’s Investment Momentum

Positive

Apr 7, 2025

ONCAP, a mid-market private equity platform of Onex Corporation, announced the final close of its ONCAP V fund with $1.3 billion in commitments, including $250 million from Onex. The fund has already deployed 40% of its capital across four investments and returned $530 million to its Limited Partners in 2024. This successful fundraising reflects ONCAP’s strong market position and investment framework, enabling it to deliver robust returns and attract new investors. Onex Corporation continues to demonstrate momentum across its investment platforms, with significant capital raised in Onex Partners and Onex Credit, further solidifying its industry positioning.

Spark’s Take on TSE:ONEX Stock

According to Spark, TipRanks’ AI Analyst, TSE:ONEX is a Neutral.

ONEX Corporation’s overall score reflects a stable balance sheet but challenges in income and cash flow stability. While recent earnings calls suggest optimism, including strong performance in credit investments and robust fundraising, technical indicators point to bearish trends. The valuation is moderate, but low dividend yield provides limited income potential for investors.

To see Spark’s full report on TSE:ONEX stock, click here.

Business Operations and StrategyFinancial Disclosures

Onex Corporation Reports 2024 Financial Results with Strategic Focus on Growth

Neutral

Feb 21, 2025

Onex Corporation announced its fourth quarter and full year 2024 financial results, highlighting a challenging year with net earnings of $303 million, down from $529 million in 2023. Despite a decrease in net earnings, the company raised over $1.5 billion in private equity and over $13 billion in fee-generating assets through its Structured Credit platform. These activities underscore Onex’s strategic focus on long-term shareholder value and strengthening its market positioning.

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.