CAECAE Inc.
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (1.5×).
Operating profit is fully backed by cash.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 8% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is CAE?
CAE Inc. earns 7.1% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 1.9 points below what the capital costs: growth destroys value
- Operating margin
- 15%
Operating margin · Aerospace & Defense median 9.6% · fiscal year to FY2025
- Cash conversion
- 1.52×
Cash conversion · operating cash flow covers the operating profit after tax
- Share count, year on year
- +0.48%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 15% |
| FY2021 | 1.6% |
| FY2022 | 8.4% |
| FY2023 | 12% |
| FY2024 | −4.3% |
| FY2025 | 15% |
Details›
- Gross marginfiscal year to FY2025
- 28%
- Operating marginfiscal year to FY2025
- 15%
- Net marginfiscal year to FY2025
- 8.6%
- Free cash flow margin
- 11%
- R&D as % of revenue
- 2.6%
- Revenue, trailing twelve months
- $4.71B
- Free cash flow, trailing twelve months
- $540M
- Net income, trailing twelve months
- $405M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 7.1%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.