Cae Inc (NYSE: CAE)

Sector: Industrials Industry: Aerospace & Defense CIK: 0001173382
Market Cap 9.67 Bn
P/B 2.56
P/E 35.23
P/S 2.72
ROIC (Qtr) 8.03
Div Yield % 0.00
Rev 1y % (Qtr) 7.58
Total Debt (Qtr) 2.37 Bn
Debt/Equity (Qtr) 0.63
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About

Investment thesis

Bull case

  • Operating cash flow of 678.10M provides exceptional 86.82x coverage of minority interest expenses 7.81M, showing strong core operations.
  • Operating cash flow of 678.10M provides strong 28.07x coverage of stock compensation 24.16M, indicating sustainable incentive practices.
  • Robust free cash flow of 435.11M exceeds capital expenditure of 242.99M by 1.79x, indicating strong organic growth funding capability.
  • Tangible assets of 5.34B provide exceptional 7.03x coverage of deferred revenue 759.34M, showing strong service capability backing.
  • Cash position of 338.47M provides exceptional 43.34x coverage of minority interest expenses 7.81M, indicating strong liquidity.

Bear case

  • Operating cash flow of 678.10M barely covers its investment activities of (290M), with a coverage ratio of -2.34, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (290M) provide weak support for R&D spending of 88.39M, which is -3.28x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 678.10M provides insufficient coverage of deferred revenue obligations of 759.34M, which is 0.89x, raising concerns about future service delivery capabilities.
  • Operating earnings of 521.24M show weak coverage of depreciation charges of 331.17M, with a 1.57 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 435.11M represents just -1.39x of debt issuance (312.48M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Geographical areas [axis] Breakdown of Revenue (2025)

Peer comparison

Companies in the Aerospace & Defense
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GE General Electric Co 347.18 Bn 39.89 7.57 20.49 Bn
2 RTX RTX Corp 272.90 Bn 40.54 3.08 39.51 Bn
3 BA Boeing Co 185.24 Bn 98.01 2.07 54.10 Bn
4 LMT Lockheed Martin Corp 151.16 Bn 30.13 2.01 21.70 Bn
5 NOC Northrop Grumman Corp /De/ 100.62 Bn 24.06 2.40 17.02 Bn
6 HWM Howmet Aerospace Inc. 99.61 Bn -156.86 7.95 3.05 Bn
7 GD General Dynamics Corp 94.33 Bn 27.82 2.39 8.01 Bn
8 TDG TransDigm Group INC 75.70 Bn 41.87 8.31 30.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.08 2.53
EV to Cash from Ops. EV/CFO 12.82 74.76
EV to Debt EV to Debt 3.67 70.01
EV to EBIT EV/EBIT 16.67 8.56
EV to EBITDA EV/EBITDA 11.03 28.68
EV to Free Cash Flow [EV/FCF] EV/FCF 19.97 73.68
EV to Market Cap EV to Market Cap 0.90 1.05
EV to Revenue EV/Rev 2.45 9.46
Price to Book Value [P/B] P/B 2.56 7.10
Price to Earnings [P/E] P/E 35.23 21.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -3.71
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 18.88
Dividend per Basic Share Div per Share (Qtr) 0.00 0.72
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 11.28
Interest Coverage Int. cover (Qtr) 3.22 -10.55
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -4.36 -77.00
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 61.12 27,757.82
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.15
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 2,217.43 -9.06
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 276.37 11.61
EBIT Growth (1y) % EBIT 1y % (Qtr) 2,560.94 -0.09
EBT Growth (1y) % EBT 1y % (Qtr) 313.78 -31.50
EPS Growth (1y) % EPS 1y % (Qtr) 285.12 -100.94
FCF Growth (1y) % FCF 1y % (Qtr) 38.10 26.50
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 21.84 -1.44
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.32 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.20 1.78
Current Ratio Curr Ratio (Qtr) 0.91 3.60
Debt to Equity Ratio Debt/Equity (Qtr) 0.63 0.32
Interest Cover Ratio Int Coverage (Qtr) 3.22 -10.55
Times Interest Earned Times Interest Earned (Qtr) 3.22 -10.55
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 24.00 -309.23
EBIT Margin % EBIT Margin % (Qtr) 20.12 -340.98
EBT Margin % EBT Margin % (Qtr) 10.12 -345.99
Gross Margin % Gross Margin % (Qtr) 28.40 -51.92
Net Profit Margin % Net Margin % (Qtr) 7.70 -347.41