Discounted Cash Flow Calculation for TSX:ALYA using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
TSX:ALYA DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Alithya Group's share price is below the future cash flow value, and at a moderate discount (> 20%).
Alithya Group's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Alithya Group's earnings available for a low price, and how does
this compare to other companies in the same industry?
Alithya Group's earnings are expected to grow significantly at over 20% yearly.
Alithya Group's revenue is expected to grow by 11.7% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Alithya Group's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Paul Raymond has been Chief Executive Officer and President of Alithya Group Inc since November 1,2018. Mr. Raymond oversees the growth and operation of Groupe Alithis Inc worldwide. He has over 25 years of industry experience. He has held several leadership positions in North America and Europe with large IT services corporations as well as the Canadian Forces. Mr. Raymond served as the Head of Global Insurance Sector Council at CGI Group, Inc. and also served as its Senior Vice President for Boston and U S North East at CGI Group, Inc. Mr. Raymond was responsible for CGI’s daily operations across eight states including New York and Massachussetts. Mr. Raymond’s responsibilities spans all of CGI’s vertical sectors. He joined CGI in 1993 as a Project Manager in the telecommunications sector in Montreal. After managing several large projects and strategic initiatives, he served as Vice President of CGI’s operation in the Canadian Atlantic provinces since 1997. At the end of 1999, he served as a Regional Vice-President of CGI’s Boston office and then, since 2002, he served as a Senior Vice-President of Business Engineering for CGI USA. From September 2002 to September 2008, he served as a Senior Vice-President for CGI’s New England operation and for its Insurance Service Line in the USA. He has more than 24 years of experience in the IT world, he provides Xpertdoc a global perspective of the insurance industry. Prior to joining CGI, Mr. Raymond held a variety of leadership positions within the Communications and Electronics Branch of the Canadian army. He serves as a Member of Advisory Board at Xpertdoc Technologies Inc. He serves as the President Emeritus of the New England Canada Business Council and is a member of the board of directors of the Maple Leaf Foundation. Paul serves on the Board of the Make-a-wish foundation (Quebec) as well as the Maple Leaf Foundation in Boston. Mr. Raymond has been Director of Alithya Group Inc. Mr. Raymond holds a BEng in Computer Engineering from the Royal Military College of Canada in Kingston, Ontario.
Insufficient data for Paul to compare compensation growth.
Insufficient data for Paul to establish whether their remuneration is reasonable compared to companies of similar size in Canada.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Alithya Group management team is less than 2 years, this suggests a new team.
Founder & Director
Senior VP & CFO
Senior VP & COO
Senior VP & Chief Information Officer
Vice President of Communications & Investor Relations
Chief Legal Officer and Corporate Secretary
Senior Vice President of Human Capital
Senior Vice President of Integrated Management Solutions
Senior Vice President of Ontario and Western Canada
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Alithya Group board of directors is less than 3 years, this suggests a new board.
Is There An Opportunity With Alithya Group Inc.'s (TSE:ALYA) 39.85% Undervaluation?
by estimating the company's future cash flows and discounting them to their present value. … Discounted Cash Flows (DCF) … If you want to learn more about discounted cash flow, the basis for my calcs can be read in detail in the Simply Wall St analysis model.
Alithya Group Inc. provides strategy and digital technology services in Canada, the United States, and Europe. The company’s digital strategy and transformation services include strategic consulting and organizational change, governance and strategic alignment, investment management, collaborative management and co-management, business and enterprise architecture, managing the people side of change, and project management. It also provides enterprise and business architecture, business analysis and architecture, information systems architecture, and technology architecture services. In addition, the company offers project management, project execution, change and transition management, integrated portfolio, and project management solutions; and infrastructure management services, including IT management, business report, infrastructure health check and audit, technology component design and documentation, technology implementation, infrastructure upgrade, repair and optimization, operation of physical and virtual, SAN, and network infrastructure. Further, it provides operational management of IT services, including coordination of incidents, issues, changes, and service requests at clients’ offices and facilities, or remotely. It serves banking, financial markets and insurance, manufacturing, retail and distribution, energy, transportation, telecommunications, healthcare, professional services, and public sector clients. The company was founded in 1992 and is based in Montreal, Canada.
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