Stock price when the opinion was issued
CAE EPS of 24c beat estimates of 19c; revenue of $1.13B beat estimates of $1.08B. Backlog is now a record $18B. We have liked the stock historically, but it has had lots of execution issues. It has high market share, but we always thought it should be more profitable overall, considering its moat and duopolistic industry with really just one other serious global competitor. We would consider 25X earnings fairly priced and would prefer an exit into something more reliable.
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World leader in flight simulation business. Strong company with recent performance in the stock market. Latest quarter has had a bit of a slowdown on sales, but overall the business is strong. Evolution of new pilots that will require new training will be good for business. Expecting high single digit revenue growth. Would recommend holding.
Difficulty with defense side, longer-term contracts crimping profitability, those will wind down in 2025. Signing more profitable contracts in the meantime. Likes it. Very well run. Not a lot of similar companies, so shares usually trade at a premium. Market-average profitability, pretty strong balance sheet.
Geopolitical conflict begets defense spending. Airline travel was one of the key drivers of the elevated CPI print yesterday, so pilots will continue to be in demand. He'd buy here, and add more on weakness.