In a world increasingly reliant on automated solutions, ATS Corporation stands at the forefront, transforming industries with its cutting-edge technology and innovative systems. Renowned for its excellence in automation, ATS designs and implements solutions that streamline manufacturing processes across diverse sectors, from life sciences to food and beverage. As we delve into the investment potential of ATS, we must consider whether its impressive growth trajectory and market position still align with its current valuation.
Table of contents
Company Description
ATS Corporation, founded in 1978 and headquartered in Cambridge, Canada, specializes in providing comprehensive automation solutions across various industries, including life sciences, transportation, and consumer products. With a market capitalization of approximately 2.67B and a workforce of 7,500 employees, ATS operates primarily in North America but has a growing global presence. The company offers a diverse portfolio encompassing automation products, engineering services, and software solutions designed to enhance manufacturing efficiency and operational sustainability. As a leader in the industrial machinery sector, ATS is strategically positioned to shape the future of automation through innovative technologies and integrated solutions that drive productivity and performance across its clients’ operations.
Fundamental Analysis
In this section, I will analyze ATS Corporation’s income statement, key financial ratios, and dividend payout policy to assess its overall financial health.
Income Statement
The table below summarizes the income statement of ATS Corporation over the past five fiscal years, showcasing key financial metrics to aid in investment decision-making.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 1.43B | 2.18B | 2.58B | 3.03B | 2.53B |
| Cost of Revenue | 1.05B | 1.57B | 1.85B | 2.18B | 1.89B |
| Gross Profit | 384M | 612M | 726M | 855M | 647M |
| Operating Expenses | 265M | 426M | 503M | 540M | 637M |
| EBITDA | 192M | 303M | 350M | 459M | 168M |
| EBIT | 121M | 187M | 224M | 317M | 15M |
| Interest Expense | 42M | 33M | 65M | 71M | 98M |
| Net Income | 64M | 122M | 127M | 194M | -28M |
| EPS | 0.70 | 1.32 | 1.39 | 1.98 | -0.29 |
| Filing Date | 2021-03-31 | 2022-03-31 | 2023-03-31 | 2024-03-31 | 2025-05-29 |
Interpretation of Income Statement
Over the five-year period, ATS Corporation experienced fluctuating revenue, peaking in 2024 at 3.03B CAD before declining to 2.53B CAD in 2025. Net income showed a significant turnaround in 2024 with 194M CAD, but fell to a loss of 28M CAD in 2025, indicating a concerning trend. Margins have been inconsistent, with gross profit margins declining sharply in 2025. The latest year’s performance signals potential challenges in controlling costs and managing profitability, emphasizing the need for caution in investment decisions regarding ATS.
Financial Ratios
The table below summarizes the key financial ratios for ATS Corporation over the past few fiscal years.
| Metrics | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 4.48% | 5.59% | 4.94% | 6.39% | -1.11% |
| ROE | 8.99% | 12.44% | 11.31% | 11.53% | -1.64% |
| ROIC | 7.80% | 6.53% | 7.03% | 8.03% | 0.09% |
| P/E | 38.26 | 33.94 | 40.56 | 22.95 | -125.28 |
| P/B | 3.44 | 4.22 | 4.59 | 2.65 | 2.06 |
| Current Ratio | 1.40 | 1.36 | 1.39 | 1.70 | 1.69 |
| Quick Ratio | 1.17 | 1.11 | 1.15 | 1.42 | 1.41 |
| D/E | 0.57 | 1.12 | 1.12 | 0.77 | 0.99 |
| Debt-to-Assets | 23.16% | 35.88% | 35.52% | 31.49% | 36.79% |
| Interest Coverage | 2.86 | 5.71 | 3.44 | 4.46 | 0.09 |
| Asset Turnover | 0.82 | 0.71 | 0.73 | 0.74 | 0.55 |
| Fixed Asset Turnover | 7.11 | 7.19 | 7.21 | 7.53 | 5.66 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
Analyzing ATS Corporation’s financial ratios for FY 2025 reveals several concerning trends. The liquidity ratios, such as the current ratio (1.69) and quick ratio (1.41), indicate adequate short-term financial health but may not be sufficient in a crisis. The company struggles with profitability, as evidenced by a negative net profit margin (-1.11%) and pretax profit margin (-3.27%). These figures suggest ongoing operational challenges and potential inefficiencies. The debt to equity ratio (0.997) indicates a high reliance on debt, raising concerns about solvency, especially given the low solvency ratio (4.28%). Furthermore, the interest coverage ratio (0.094) is alarmingly low, suggesting difficulty in meeting interest obligations, which heightens overall financial risk.
Evolution of Financial Ratios
Over the past five years, ATS Corporation’s financial ratios have shown a downward trend in profitability, with net profit margins declining significantly, while liquidity ratios have remained relatively stable. The increasing debt levels relative to equity also indicate growing financial leverage, which warrants careful monitoring.
Distribution Policy
ATS Corporation currently does not pay dividends, which is consistent with its strategy of prioritizing reinvestment into growth initiatives and research and development. The absence of dividends is supported by a negative net income and ongoing investments aimed at enhancing long-term shareholder value. While the company does engage in share buybacks, this strategy is also subject to scrutiny given the financial challenges. Overall, this distribution approach may align with sustainable value creation, but investors should monitor performance closely.
Sector Analysis
ATS Corporation operates in the Industrial – Machinery sector, specializing in automation solutions. Key competitors include major players in manufacturing automation, with strengths in engineering design and a broad service offering.
Strategic Positioning
ATS Corporation holds a significant position in the industrial automation sector, with a market cap of approximately 2.67B. The company specializes in automation solutions, which are crucial across various industries, including life sciences and consumer products. Despite competitive pressures from emerging technologies and established players, ATS maintains a robust market share by continuously innovating its product offerings. The company faces challenges from technological disruptions but is well-positioned to leverage its engineering capabilities and extensive service portfolio to enhance operational efficiencies for clients, ultimately driving sustainable growth.
Key Products
ATS Corporation offers a range of innovative automation solutions tailored to various industries. Below is a summary of some of their key products:
| Product | Description |
|---|---|
| Automated Manufacturing Systems | Comprehensive systems designed for efficient manufacturing and assembly processes across industries. |
| Test Solutions | Advanced testing equipment that ensures product quality and performance during manufacturing. |
| Connected Factory Solutions | Software systems that provide real-time data analysis for improved operational efficiency. |
| Pre-Automation Services | Services including concept development, simulation, and total cost of ownership modeling. |
| Contract Manufacturing Services | Tailored manufacturing solutions that meet specific client needs, optimizing production lines. |
| Process Optimization Tools | Tools and services focused on maximizing efficiency and reducing downtime in production. |
| Spare Parts and Retrofitting | Offering essential spare parts and retrofitting services to extend the life of existing equipment. |
These products reflect ATS Corporation’s commitment to delivering cutting-edge automation solutions that enhance productivity and operational effectiveness for its clients.
Main Competitors
The competitive landscape within the industrial machinery sector is characterized by several notable players, each vying for market share with unique offerings.
| Company | Market Cap |
|---|---|
| Xometry, Inc. | 2.98B |
| Standex International Corporation | 2.93B |
| Triton International Limited | 2.55B |
| ATS Corporation | 2.67B |
| Hillenbrand, Inc. | 2.24B |
| TIC Solutions, Inc. | 2.10B |
| Enerpac Tool Group Corp. | 2.01B |
| PureCycle Technologies, Inc. | 1.67B |
| Nano Nuclear Energy Inc | 1.49B |
| American Superconductor Corporation | 1.47B |
| Power Solutions International, Inc. | 1.37B |
The main competitors in the industrial machinery sector include Xometry, Standex, and Triton International, each operating primarily in the North American market. These companies offer various automation solutions and services, positioning themselves as significant players in this dynamic industry.
Competitive Advantages
ATS Corporation stands out in the industrial machinery sector due to its comprehensive automation solutions that span planning, design, and servicing of manufacturing systems. With a diverse clientele across life sciences, transportation, and consumer products, ATS is well-positioned to capitalize on emerging market opportunities. The company’s ongoing investment in software and digital solutions, including connected factory management systems, enhances operational efficiency and drives sustainable production improvements. Looking ahead, new product developments and expansion into untapped markets could further solidify ATS’s competitive edge and foster long-term growth.
SWOT Analysis
This SWOT analysis aims to provide a comprehensive view of ATS Corporation’s strategic position.
Strengths
- Strong market position
- Diverse product offerings
- Experienced leadership
Weaknesses
- Lack of dividend
- High beta indicates volatility
- Dependence on specific industries
Opportunities
- Expansion into emerging markets
- Growth in automation demand
- Innovation in digital solutions
Threats
- Economic downturn impacts demand
- Intense competition
- Supply chain disruptions
The overall SWOT assessment indicates that while ATS Corporation possesses significant strengths and opportunities for growth, it must remain vigilant against market threats and manage its weaknesses strategically. This balanced approach will be essential for sustaining long-term success.
Stock Analysis
In reviewing ATS Corporation’s stock performance over the past year, we observe significant price movements that reflect the company’s trading dynamics and investor sentiment.
Trend Analysis
Over the past year, ATS Corporation’s stock has experienced a price change of -36.16%, indicating a bearish trend. This considerable decline suggests a persistent downward trajectory, characterized by acceleration, as reflected in the standard deviation of 4.32, which points to notable volatility. The stock’s highest price reached 43.82, while the lowest was 23.5, further highlighting the significant fluctuations within this timeframe.
Volume Analysis
In the last three months, ATS Corporation’s trading volume has totaled approximately 63.5M, with seller-driven activity dominating the market, as evidenced by seller volume of 32.5M compared to buyer volume of 30.9M. However, the overall volume trend is increasing, which suggests that investor participation is growing. Recent data shows that in the latest period, buyer volume has slightly outpaced seller volume, indicating a shift toward a slightly buyer-dominant sentiment, with buyers accounting for 55% of the recent transactions.
Analyst Opinions
Recent analyst recommendations for ATS Corporation (ATS) indicate a cautious stance, with a consensus rating of “Hold.” Analysts have expressed concerns about the company’s low return on equity and return on assets, scoring them both at 1. Notably, the discounted cash flow score is relatively better at 3, suggesting some potential for growth. Given these mixed signals, it’s prudent for investors to monitor the situation closely before making any significant investment decisions.
Stock Grades
The latest grades for ATS Corporation reflect a cautious sentiment among analysts.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | Maintain | Neutral | 2024-08-13 |
| Goldman Sachs | Maintain | Sell | 2024-08-13 |
| JP Morgan | Maintain | Neutral | 2024-05-24 |
Overall, the trend shows a stable yet cautious outlook with two neutral ratings from JP Morgan and a sell recommendation from Goldman Sachs. This suggests that while the stock is not currently seen as a strong buy, there is a consistent view among analysts to maintain their positions, reflecting a wait-and-see approach.
Target Prices
The consensus target price for ATS Corporation (ATS) is firmly set at $34.
| Target High | Target Low | Consensus |
|---|---|---|
| 34 | 34 | 34 |
Overall, analysts expect ATS to maintain a stable performance, with a clear consensus around the $34 target price.
Consumer Opinions
Consumer sentiment surrounding ATS Corporation (ticker: ATS) reflects a blend of enthusiasm and caution, showcasing both strong loyalty and critical feedback.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent customer service and support!” | “High prices compared to competitors.” |
| “Innovative products that stand out!” | “Delivery times are often delayed.” |
| “User-friendly interface and design.” | “Limited options for customization.” |
Overall, consumer feedback indicates that while ATS Corporation excels in customer service and product innovation, concerns about pricing and delivery consistency persist among users.
Risk Analysis
In evaluating ATS Corporation, I’ve identified several key risks that could affect its performance and investment viability. Below is a summary of these risks:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in market demand affecting sales. | High | High |
| Regulatory Risk | Changes in regulations impacting operations. | Medium | High |
| Operational Risk | Supply chain disruptions affecting production. | High | Medium |
| Financial Risk | Increased debt levels impacting liquidity. | Medium | High |
| Technological Risk | Rapid tech changes requiring constant innovation. | High | Medium |
In summary, the most likely and impactful risks for ATS Corporation include market and operational risks. Recent trends show increasing volatility in demand due to economic shifts, which necessitates a cautious investment approach.
Should You Buy ATS Corporation?
ATS Corporation currently demonstrates a challenging profitability landscape with a negative net income of -28.05M and a net profit margin of -1.11%. The company is in a phase of value destruction, as its return on invested capital (ROIC) of 0.09% is below the weighted average cost of capital (WACC) of 7.26%. With a debt-to-equity ratio of 0.997, ATS exhibits a significant reliance on debt, which may increase financial risk. The overall rating of C suggests that investors may want to exercise caution and consider further analysis before making decisions.
Favorable signals
In the data provided, there are several favorable elements to note. The gross margin stands at 25.53%, indicating a positive ability to generate profit from sales. Additionally, the interest expense percentage is 3.88%, which reflects a manageable debt cost. Furthermore, the current ratio of 1.69 and quick ratio of 1.41 both signal a favorable liquidity position, suggesting the company can meet its short-term obligations. Lastly, the fixed asset turnover ratio of 5.66 is favorable, indicating efficient use of fixed assets to generate sales.
Unfavorable signals
Conversely, there are considerable unfavorable signals in the data. The revenue growth is reported at -16.47%, which suggests a decline in sales. Additionally, gross profit growth is -24.41%, reflecting a significant drop in profitability. The net margin is also unfavorable at -1.11%, indicating that the company is operating at a loss. The return on equity (ROE) is -1.64% and the return on invested capital (ROIC) is 0.09%, both indicating poor returns for shareholders. Furthermore, the interest coverage ratio of 0.16 is unfavorable, suggesting challenges in covering interest expenses.
Conclusion
Given that the income statement evaluation is unfavorable and the ratios evaluation is also unfavorable, it may appear that the company is facing significant challenges. Moreover, the recent seller volume exceeds the buyer volume, suggesting a need for buyers to return before any positive trend can be expected. It might be prudent to remain cautious while monitoring for potential improvements in the company’s performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- ATS Automation Inc. Welcomes Intelligent Building Systems to Family of ATS Companies – Yahoo Finance (Dec 01, 2025)
- Legal & General Group Plc Sells 22,764 Shares of ATS Corporation $ATS – MarketBeat (Dec 01, 2025)
- (ATS) Dynamic Trading Report (ATS:CA) – news.stocktradersdaily.com (Dec 05, 2025)
- ATS Corporation to Engage with Investors at UBS Conference – TipRanks (Nov 24, 2025)
- ATS to Participate in the Scotiabank Transportation & Industrials Conference – Business Wire (Nov 06, 2025)
For more information about ATS Corporation, please visit the official website: atsautomation.com
