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1. Company Snapshot

1.a. Company Description

ATS Corporation, together with its subsidiaries, provides automation solutions worldwide.The company is also involved in the planning, designing, building, commissioning, and servicing automated manufacturing and assembly systems, including automation products and test solutions.It offers enterprise solutions in the areas of project management; partners/suppliers/vendors team selection and coordination; facility layouts and operational design; business case development and project justification; post project service, spare parts, and support; and system design, built, integration, commissioning, validation, training and start up.


In addition, the company offers pre-automation services comprising discovery and analysis, concept development, simulation, and total cost of ownership modelling; post automation services, including training, process optimization, preventative maintenance, emergency and on-call support, spare parts, retooling, retrofits, and equipment relocation; and contract manufacturing services.Further, it provides engineering design, prototyping, process verification, specification writing, software and manufacturing process controls development, standard automation products/platforms, equipment design and build, third-party equipment qualification, procurement and integration, automation system installation, product line commissioning, validation, and documentation services.The company serves life sciences, transportation, consumer products, food and beverage, and energy markets.


The company was formerly known as ATS Automation Tooling Systems Inc.and changed its name to ATS Corporation in November 2022.ATS Corporation was founded in 1978 and is headquartered in Cambridge, Canada.

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1.b. Last Insights on ATS

The recent 3-month performance of ATS Corporation was negatively impacted by a decline in revenue, which decreased by 13% year-over-year to CA$652.0m in the third quarter of 2025. This decline was likely driven by a slowdown in demand for the company's industrial automation solutions. Additionally, the company's earnings per share (EPS) missed expectations, which may have contributed to the negative sentiment surrounding the stock. The company's participation in various investor conferences, including the J.P. Morgan Industrials Conference and the RBC Capital Markets Canadian Industrials Conference, may provide opportunities for the company to address investor concerns and reiterate its growth strategy.

1.c. Company Highlights

2. ATS Corporation's Q2 Fiscal 2026 Earnings: Strong Organic Growth and Margin Expansion

ATS Corporation reported a robust second quarter in fiscal 2026, with revenues reaching $729 million, up 19% from the same period last year. Adjusted earnings from operations were $79 million. The company's earnings per share (EPS) came in at $0.45, slightly below estimates of $0.4662. The revenue growth was driven by strong order bookings, which stood at $734 million, a 6% sequential increase. The order backlog remains healthy at approximately $2.1 billion, providing good revenue visibility for the coming periods.

Publication Date: Nov -10

📋 Highlights
  • Revenue Growth:: Q2 revenue surged to $729 million, a 19% year-over-year increase, driven by strong order bookings of $734 million (+6% sequentially).
  • Order Backlog Strength:: Total backlog reached $2.1 billion, with Life Sciences at $1.1 billion and Energy at $277 million (+154% YoY) from nuclear refurbishment projects.
  • Financial Guidance:: Q3 revenue projected at $700–740 million; full-year revenue growth guidance of high single digits, with adjusted EBITDA margin expected to exceed 13.8% (2025: 13.8%).
  • Deleveraging Strategy:: Net debt/EBITDA at 3.4x, aiming to reduce to 2–3x by fiscal 2026, with $28 million operating cash flow and potential equity issuance for flexibility.
  • Operational Efficiency:: Restructuring costs $15 million with <1-year payback; SG&A run rate at $134.6 million, expected to leverage as revenue grows, improving adjusted operating margins.

Segmental Performance

The company's diverse market presence across Life Sciences, Food and Beverage, Energy, Consumer Products, and Transportation contributed to its robust performance. The Life Sciences segment maintained a strong order backlog of $1.1 billion, driven by demand in submarkets such as radiopharma, auto-injectors, and diagnostic wearables. In the Energy segment, the order backlog surged to a record $277 million, up 154% from Q2 last year, driven by nuclear refurbishment projects. The Food and Beverage segment also saw wins across multiple regions, with a quarter-end backlog of $218 million.

Guidance and Outlook

ATS Corporation expects Q3 revenues to range between $700 million and $740 million and has reaffirmed its full-year high single-digit revenue growth outlook. The company anticipates adjusted operating margin improvement on a full-year basis in fiscal 2026, driven by its restructuring plan aimed at realigning its cost structure. The estimated costs for this restructuring are $15 million, with an expected payback of less than 1 year.

Cash Flow and Leverage

The company generated $28 million in cash flows from operating activities and invested $18.3 million in capital expenditures and intangible assets. The net debt to adjusted EBITDA ratio stands at 3.4x, with a goal to reduce leverage to within the target range of 2 to 3x. ATS Corporation is exploring options for deleveraging, including an equity issuance, to enhance its financial flexibility.

Valuation and Estimates

Given the current valuation metrics, with a P/E Ratio of -93.9, P/S Ratio of 1.43, and EV/EBITDA of 31.75, it appears that the market has high expectations for the company's future growth. Analysts estimate next year's revenue growth at 11.0%, indicating a continued upward trajectory. The company's efforts to deleverage and improve its margin profile are expected to contribute to its long-term financial health and growth prospects.

3. NewsRoom

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Assessing ATS (TSX:ATS) Valuation After Recent Weak Returns and Changing Market Sentiment

Oct -07

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Where Does ATS Stand After a 15% Drop Amid Automation Market Shifts?

Oct -06

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Hypha Labs and Automated Technical Services (ATS) Enter into Agreement to Scale its Mushroom Accelerator Technology for Commercial Nutraceutical Manufacturing

Sep -29

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New Strong Sell Stocks for September 23rd

Sep -23

Source: zacks.com

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Is the Options Market Predicting a Spike in ATS Stock?

Sep -10

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ATS to Participate in the Morgan Stanley 13th Annual Laguna Conference

Aug -27

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ATS to Participate in the RBC Capital Markets Global Industrials Conference

Aug -14

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ATS First Quarter 2026 Earnings: Revenues Beat Expectations, EPS Lags

Aug -11

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.16%)

6. Segments

Construction Contracts

Expected Growth: 6%

ATS Corporation's 6% growth in Construction Contracts is driven by increasing infrastructure spending, government initiatives, and rising demand for sustainable building practices. Additionally, the company's strategic expansion into new markets, improved operational efficiency, and strong relationships with key clients have contributed to this growth.

Services

Expected Growth: 5%

ATS Corporation's 5% growth in services is driven by increasing demand for digital transformation, adoption of Industry 4.0 technologies, and growing need for operational efficiency. Additionally, expansion into new markets, strategic partnerships, and investments in innovation are contributing to the growth.

Automation Systems

Expected Growth: 8%

ATS Corporation's Automation Systems segment growth is driven by increasing demand for industrial automation, adoption of Industry 4.0 technologies, and rising need for process optimization and efficiency. Additionally, growing investments in robotics, artificial intelligence, and IoT solutions, as well as expansion into new markets and geographies, contribute to the segment's 8% growth rate.

7. Detailed Products

Industrial Automation Solutions

ATS Corporation provides industrial automation solutions that help manufacturers improve efficiency, reduce costs, and increase productivity. Our solutions include robotic automation, machine vision, and control systems.

IT Services

ATS Corporation offers a range of IT services, including IT consulting, cloud services, cybersecurity, and data analytics. Our team of experts helps businesses optimize their IT infrastructure and improve their bottom line.

Test and Measurement Solutions

ATS Corporation provides test and measurement solutions that help companies ensure the quality and reliability of their products. Our solutions include testing and inspection systems, and data acquisition systems.

Custom Automation Solutions

ATS Corporation designs and builds custom automation solutions that meet the unique needs of our clients. Our solutions include robotic automation, machine vision, and control systems.

8. ATS Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for ATS Corporation is moderate, as there are some alternative solutions available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers is high, as they have many options available in the market and can easily switch to competitors if they are not satisfied with ATS Corporation's services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low, as ATS Corporation has a strong negotiating position and can easily switch to alternative suppliers if needed.

Threat Of New Entrants

The threat of new entrants is moderate, as there are some barriers to entry in the industry, but it is still possible for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high, as there are many competitors in the market and they are all competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 41.73%
Debt Cost 6.97%
Equity Weight 58.27%
Equity Cost 11.19%
WACC 9.43%
Leverage 71.61%

11. Quality Control: ATS Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 3.2/10

Value: 4.8

Growth: 3.0

Quality: 2.6

Yield: 0.0

Momentum: 3.5

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.71$

Current Price

37.71$

Potential

-0.00%

Expected Cash-Flows