ATS Automation Q2 Revenue Rises 56%; Shares Pop

Shares of ATS Automation Tooling Systems (ATA) jumped in early trading Wednesday, after the company reported a strong second quarter. The Canada-based company provides automation solutions to businesses worldwide.

Q2 revenues increased 55.6% year-over-year to C$522.1 million, including C$120.4 million in revenues earned by acquired companies.

Earnings per share were C$0.41 in Q2 2022, up from C$0.13 in Q2 2021. Adjusted earnings per share amounted to C$0.53, up from C$0.26 in the prior-year quarter.

Order Bookings reached C$510 million, 26.6% higher than a year ago. On the other hand, Order Backlog increased 35.5% to C$1.3 billion from C$956 million (as of September 26, 2021).

ATS CEO Andrew Hider said, “The second quarter featured strong operational results including organic revenue growth, acquisition contributions from CFT and BioDot, margin expansion in line with our plan, solid Order Bookings and record Order Backlog.

“With our Order Backlog providing good revenue visibility, a healthy balance sheet in place to support growth, and our talented and committed workforce pursuing continuous improvement through our ABM, ATS is well positioned to continue creating value.”

During the quarter, the company made acquisitions to strengthen its process engineering consulting capabilities, enhance its digital offerings, expand its portfolio of precision conveying technologies, and strengthen its position in the food and drink end-market. (See Insiders’ Hot Stocks on TipRanks)

On October 27, TD Securities analyst Cherilyn Radbourne reiterated a Buy rating on ATA and a C$48 price target. This implies 4.8% upside potential.

Overall, consensus on the Street is that ATA is a Strong Buy based on four Buys. The average ATS Automation Tooling Systems price target of C$51.88 implies 13.3% upside potential to current levels.

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