Q: on sept 5 you upgraded ATS to Bplus since that time the shares have dropped over 16 percent 1. what has caused the drop 2. would you buy at todays price 3. what 3 current metrics do you use to value ATS and how do they compare to ATS.s historical 3 year metrics thanks Richard
5i Research Answer:
ATS reported mixed results (we have comments posted in the Q&A here). Investors are concerned about a drop in the backlog. While disappointing, at the new price we would still consider it buyable. Sometimes after weakness stocks can 'drift' so buyers may have some flexibility here in the short term. Typically we value it on a price/earnings basis in relation to its growth rate. At the current 20X, it is well below its historical averages of the past 10 years (25x to 62x, this is also the 3-year range). F2024 growth is still very strong, though F2025 growth is expected to be more muted, especially if the backlog does not pick up.