ATS Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week, you might have seen that ATS Corporation (TSE:ATS) released its third-quarter result to the market. The early response was not positive, with shares down 7.5% to CA$54.15 in the past week. The result was positive overall - although revenues of CA$752m were in line with what the analysts predicted, ATS surprised by delivering a statutory profit of CA$0.47 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for ATS

Following last week's earnings report, ATS' nine analysts are forecasting 2025 revenues to be CA$2.98b, approximately in line with the last 12 months. Statutory per share are forecast to be CA$1.78, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CA$3.07b and earnings per share (EPS) of CA$2.28 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the CA$63.50 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values ATS at CA$73.00 per share, while the most bearish prices it at CA$45.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that ATS' revenue growth is expected to slow, with the forecast 0.1% annualised growth rate until the end of 2025 being well below the historical 19% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ATS.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ATS. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$63.50, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for ATS going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for ATS (of which 1 is potentially serious!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.