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    ATS (TSX:ATS) Just Gave Investors Something To Think About

    Simply Wall St·08/16/2026 08:28:33
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    Earnings miss and new guidance put ATS (TSX:ATS) in focus

    ATS (TSX:ATS) is back on investors' radar after first quarter results showed sales and profitability under pressure, followed by fresh second quarter revenue guidance and an update on its previously announced share buyback.

    See our latest analysis for ATS.

    The recent first quarter earnings miss, new second quarter revenue guidance and an inactive buyback appear to be weighing on sentiment, with ATS’s share price at CA$28.16 and a 30 day share price return down 27.2%. The 1 year total shareholder return is down 26.4%, which points to fading momentum compared with previous years.

    If ATS’s recent weakness has you reassessing your options, this can be a useful moment to look across the automation and factory technology space and see what stands out in 37 robotics and automation stocks

    ATS now trades at a sizable discount to both analyst targets and one estimate of intrinsic value after its weak quarter and cautious guidance. Is that too harsh, or a fair reflection of the risks?

    Most Popular Narrative: 36% Undervalued

    Compared with the narrative fair value of CA$43.89, ATS at CA$28.16 screens as materially discounted. This is why the most followed narrative focuses on long term cash generation and margins rather than the recent share price slide.

    The shift toward services, digital solutions, and aftermarket consumables (as seen with products like Connected Care Hub and virtual reality training) is expanding ATS's recurring revenue base, offering more predictable cash flows and contributing to gradual gross margin and adjusted earnings growth.

    Read the complete narrative. Read the complete narrative.

    Want to see what is behind that cash flow story? The narrative leans heavily on faster earnings growth, fatter margins and a higher future earnings multiple. Curious which combinations of those inputs are doing the heavy lifting?

    Result: Fair Value of CA$43.89 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, ATS still faces meaningful risks. Reliance on acquisitions and elevated leverage, along with weaker order bookings, could challenge the upbeat cash flow narrative.

    Find out about the key risks to this ATS narrative.

    Another View on ATS Using Market Multiples

    The earlier fair value for ATS leaned on long term cash flows and a narrative model. Looking at the current P/E tells a different story. ATS trades on 57.9x earnings, which is higher than the North American Machinery industry at 27.6x and the peer average at 33.6x.

    The fair ratio for ATS is 60.2x, only slightly above the current 57.9x. That puts the stock close to where the market could move the multiple, but still leaves limited room for error if earnings forecasts or sentiment shift. Does that narrow gap make you more cautious, or does it reinforce the longer term thesis?

    See what the numbers say about this price — find out in our valuation breakdown.

    TSX:ATS P/E Ratio as at Aug 2026
    TSX:ATS P/E Ratio as at Aug 2026

    Next Steps

    Sentiment around ATS is clearly mixed right now, so it may help to look through the key numbers and form your own takeaway by reviewing the 4 key rewards and 2 important warning signs.

    Looking for more investment ideas beyond ATS?

    If ATS has you rethinking your watchlist, do not stop here. Use this moment to refresh your ideas and line up your next potential opportunities.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.