What macroeconomic or sector trends could affect ALYA’s growth trajectory?

Macro & sector backdrop

Alithya (ALYA) is a mid‑cap Canadian tech‑services firm that benefits most from the broader “digital‑transformation” wave. Two macro trends dominate its growth outlook:

1. Corporate IT spend and cloud‑AI adoption – North‑American and European enterprises continue to allocate a larger share of capital budgets to cloud migration, data‑analytics, and AI‑driven automation. The World Economic Forum and IDC now estimate that corporate cloud‑services spend will grow ~9‑10 % CAGR through 2028, providing a tail‑wind for firms that sell implementation, integration and managed‑services contracts—Alithya’s core offering. The company’s 84.8 % repeat‑client revenue indicates it is well‑positioned to capture incremental spend as existing clients expand their cloud footprints.

2. Macroeconomic conditions – The company’s revenue growth (2.7 % YoY) is modest, so it is sensitive to broader economic health. A resilient U.S. and Canadian GDP (Q2‑2024 growth still above 1.5 %) and relatively low‑to‑moderate interest‑rate environment support corporate cap‑ex. Conversely, a tightening cycle (higher rates, tighter credit) or a prolonged recession could force IT budgets to tighten, especially on discretionary digital‑transformation projects, which could cap Alithya’s upside. Additionally, currency exposure (USD/ CAD) can affect reported revenue and margins given a large portion of contracts are USD‑priced. A strengthening CAD would compress reported dollars, while a weaker CAD could boost reported revenue but also raise cost‑inflation pressures for imported software licences.

Trading implications

• Bullish case: If macro data (e.g., PMI, corporate‑cap‑ex surveys) continue to show robust tech‑spending and no major recession signal, ALYA’s stable repeat‑business and improving gross margin suggest incremental upside. Technical charts show the stock trading above its 50‑day moving average with support near $23.00 and a bullish breakout above the $27.5–$28.0 resistance zone. A pull‑back to that support with a “sell‑the‑news” bounce could be a low‑risk entry.

• Bearish case: A sudden deterioration in macro sentiment—higher rates, rising inflation, or a sharp slowdown in corporate IT budgets—could pressure earnings and compress margins. Watch for a break below the 50‑day MA and the $23 support; that would signal a trend‑change risk.

Actionable insight: Maintain a long‑biased stance on ALYA if macro data continue to support healthy corporate IT spend, but tighten stops at the $23‑$22.5 region. If macro indicators turn negative (e.g., higher CPI, tighter credit) and the stock falls below its 20‑day SMA, consider exiting or hedging with a put spread to protect against a broader tech‑sector pullback.