ATS Automation (TSX:ATA) is a Cambridge-based company that provides factory automation solutions worldwide. Its shares have dropped 7% over the past month as of close on February 21. This is a stock that long-term investors should keep an eye on this decade.
A recent report from Fortunate Business Insights forecast that the global industrial automation market will reach USD $296 billion by 2026, compared to a value of $157 billion U.S. in 2018. This would represent a compound annual growth rate (CAGR) of 8.4% over the forecast period.
Automation is rearing its head across a broad array of sectors, but factory automation is seeing some of the most immediate impacts in these early phases.
This company released its third quarter fiscal 2020 results on February 5. Revenues rose 14% year-over-year to $367.2 million while EBITDA shrank to $26.8 million due to restructuring charges, higher stock compensation, and operating inefficiencies that it is addressing with its Reorganization Plan.
The Order Backlog rose 1% from the prior year to $939 million. In the quarter, ATS Automation also acquired MARCO Limited, a leading provider of yield control and recipe formulation systems.
Shares of ATS Automation possessed a price-to-earnings ratio of 31 and a price-to-book value of 2.2 as of close on February 21. These technicals are favourable in comparison to its industry peers. The company is moving forward with a fantastic balance sheet and very promising growth potential. This is a stock to buy on the dip.
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