ATSAF - ATS Automation Tooling Systems: Is Its Weak Q2 FY2019 Revenue Growth A Concern?
Investment Thesis
ATS Automation Tooling Systems (ATSAF) (TSX:ATA) (“ATS”) delivered only modest revenue growth in its Q2 FY2019 earnings mainly due to several transitory factors. Nevertheless, its backlog and bookings still grew significantly from last year. This should translate into solid revenue growth in the upcoming quarters. The company’s funnel activities remain quite strong thanks to demand in its life sciences and transportations (electrical vehicles) segments. Its EV to EBITDA ratio is now lower than its historical average. We believe the current share price is attractive, especially given its strong growth prospect.
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