ATS Corp T.ATS

Ink Research

[retiredcf]

June 21, 2023

Morning Report: EV battery makers help drive ATS up the INK rankings

As we enter summer, we continue with our technology theme by visiting ATS Corporation (ATS). The stock was the top mover up the INK Edge rankings last week as we reported on Saturday in the #stock_ideas channel in INK Chat. Strictly speaking, ATS is not a Technology stock as it is classified as an Industrial by Refinitiv. However, technology is the driving force behind ATS with automation solutions accounting for more than 60% of the firm's business. Industries served include the EV battery space. Since last October, ATS has announced over half a billion US dollars in sales orders for automated battery assembly systems from automotive customers. The sales are expected to be executed over the next two years.

In addition to automation solutions, hardware and software components contributed to about 18% of fiscal 2023 sales with the balance derived from supply chain services. On May 18th, ATS announced Q4 (ended March 31, 2023) results reported fiscal year revenue of $2.577 billion, up 18.1% from the year before. Basic EPS for the fiscal year was $1.39, up from $1.32 a year ago. ATS has been on the acquisition trail, but the bulk of its Q4 sales growth was organic. ATS reported Q4 sales of $0.73 billion, up 21.2% from Q4 2022. Organic revenue growth excluding contributions from acquired companies and foreign exchange translation was 16.5%. On May 30th, ATS closed an initial public offering on the New York Stock Exchange for gross proceeds of US$282.9 million when it issued 6.9 million shares at US$41 per share. ATS expects to use the cash for strategic opportunities and general corporate purposes. The stock now trades on both the New York and Toronto exchanges. Meanwhile, insiders have been modestly adding to their positions over the past 90 days, which has helped move the stock up our rankings.