ATS CORPORATION

Recommendation history

• Q4 2026HoldHold: ATS delivered Q4 adjusted revenue of $744 million, adjusted earnings from operations of $76.8 million, and ended FY26 with approximately $2.0 billion of backlog, but Q4 bookings fell 18.4% and FY27 guidance is only for modest revenue growth. The bull case is a 50–75 basis-point FY27 margin improvement, stronger radiopharma and nuclear demand, and better cash generation; the tension is that transportation exits, GLP-1 backlog is normalizing, and restructuring execution must offset near-term growth pressure.
• Q3 2026HoldHold: Q3 revenue rose 16.7% to $761 million and backlog was approximately $2.1 billion, but gross margin fell 111 basis points to 29.6%. The backlog and 1.06 book-to-bill support growth, yet margin expansion remains an unquantified promise under a new CEO and interim CFO, while Q4 revenue guidance of $710 million-$750 million implies a softer finish.
• Q2 2026HoldHold: Q2 revenue rose 18.9% to $729 million, adjusted earnings from operations increased 40% to $79.1 million, and backlog reached approximately $2.1 billion, but bookings were down 1.1% year over year and leverage remains elevated at 3.4x net debt to adjusted EBITDA. The growth setup is credible, yet the CEO transition, restructuring execution, working-capital conversion, and unquantified margin outlook argue for waiting for better evidence.
• Q1 2026HoldHold: Q1 revenue rose 6.1% to $737 million and adjusted operating margin was 10.7%, but organic revenue fell 1.2% and bookings dropped 15% year over year. The $2.1 billion backlog and 1.7:1 trailing book-to-bill support visibility, yet 3.6x net leverage, a CEO transition, and tariff-sensitive investment timing keep this from being a clean buy.
• Q4 2025HoldHold: Q4 bookings rose 9% to $863 million and backlog reached $2.1 billion, but adjusted revenue fell 8.9% and adjusted EPS fell to $0.41. The growth setup is improving, yet 3.9x leverage, only modest expected margin expansion, and unresolved EV and tariff execution risks do not make this a clean buy.
• Q3 2025HoldHold: Q3 bookings rose 32% to $883 million and backlog reached $2.1 billion, but revenue fell 13.3% to $652 million and adjusted EPS was $0.32. Life Sciences and Food & Beverage provide visibility, while the EV dispute, 3.7x leverage, tariff exposure, and only modest near-term margin improvement keep this from being a clean buy.
• Q2 2025HoldHold: Q2 revenue fell 16.7% to $613 million and adjusted earnings from operations fell 43% to $56.5 million, while bookings were flat at $742 million and backlog was just over $1.8 billion. Life Sciences is the credible growth engine, but the unresolved EV customer dispute freezes roughly $155 million of overdue receivables and $170 million of contract assets, keeping leverage at 3.4x versus a 2-3x target.