How does the current valuation (P/E, EV/EBITDA) compare to historical averages and peer benchmarks?

Answer Overview

The news release you provided tells us only about ATS Corporation’s Q1 FY 2026 financial results (revenues, net income, EPS). It does not disclose the market price of the shares, the number of shares outstanding, total debt, cash balances or any of the valuation multiples (P/E, EV/EBITDA) that would be needed for a direct comparison with historical averages or peer‑group benchmarks.

Below is a step‑by‑step guide to obtaining the missing pieces, calculating the multiples, and then interpreting them against both ATS’s historical ranges and the typical ranges for its peer set. I also include illustrative (hypothetical) numbers to show how the analysis would look once the data are gathered.

1. What data are required?

2. How to calculate the multiples

2.1. Price‑to‑Earnings (P/E)

[
\text{P/E}_\text{TTM} = \frac{\text{Share price}}{\text{TTM EPS}}
]

• TTM EPS = (Net income for the last 12 months) ÷ (Diluted shares outstanding).
  
• If only quarterly data are available, annualize the most recent quarter (multiply by 4) or use the exact trailing‑12‑month net income reported by data providers.

2.2. Enterprise Value‑to‑EBITDA (EV/EBITDA)

[
\text{EV} = \text{Market Capitalisation} + \text{Total Debt} + \text{Preferred Equity} + \text{Minority Interest} - \text{Cash & Cash Equivalents}
]

[
\text{EV/EBITDA}_\text{TTM}= \frac{\text{EV}}{\text{TTM EBITDA}}
]

• TTM EBITDA can be calculated from the income statement: [ \text{EBITDA}= \text{Net Income} + \text{Interest} + \text{Taxes} + \text{Depreciation} + \text{Amortisation} ] (Again, use a 12‑month sum or a data‑provider’s TTM figure.)

3. Historical valuation ranges for ATS

Because the news release does not contain historical multiples, you will need to pull them from a financial database (Bloomberg, FactSet, S&P Capital IQ, Morningstar, etc.). Below is the typical approach:

(These ranges are illustrative; you would replace them with the actual figures you extract.)

Interpretation framework

4. Peer‑group benchmark ranges

A typical peer set for ATS (oil‑field services & equipment) yields the following median multiples (as of the most recent trading day, e.g., 2025‑08‑06). Again, you will need to pull the exact numbers; the table below shows the kind of output you should expect.

Note: Some peers may have negative earnings or EBITDA in a given quarter; they are excluded from the median calculations.

5. Putting it together – Sample calculation

Below is a hypothetical illustration using publicly available numbers as of 2025‑08‑06 (the day before the press release). Replace the values with the actual data you retrieve.

Interpretation of the example:

• P/E is more than double the 5‑year average and the peer median, indicating the market is pricing a significant earnings premium. Possible reasons: anticipated higher margins, new contracts, or speculative optimism about oil‑price recovery.
  
• EV/EBITDA is also markedly above both the historical and peer medians, suggesting the market expects substantially stronger cash‑flow generation or is factoring in strategic assets (e.g., proprietary technology, ESG‑compliant rigs).
  

If the actual numbers you pull mirror this pattern, you would conclude that ATS is currently over‑valued relative to its own historical valuation and relative to its peer group. Conversely, if the actual P/E/EV‑EBITDA sit within or below the historical/peer ranges, ATS would be considered fairly valued or even cheap.

6. Checklist for a complete answer (what you should do next)

1. Gather the most recent market data (share price, market cap, debt, cash).
   
2. Pull the trailing‑12‑month net income and EBITDA from ATS’s quarterly filings or a data platform.
   
3. Calculate P/E and EV/EBITDA as shown above.
   
4. Extract historical multiples for ATS (5‑yr, 10‑yr averages) from the same data source.
   
5. Identify a peer set and compute peer median multiples.
   
6. Compare:
   
   • Current vs. historical → valuation drift (over/under relative to its own track record).
     
   • Current vs. peers → relative positioning within industry.
     
7. Provide a narrative that links the observed valuation to the recent earnings performance (e.g., revenue growth of 6.1 % but net income down 31 %). Discuss whether the earnings decline justifies a lower multiple, or whether other factors (contract backlog, oil‑price outlook, capital‑expenditure cycle) may support a premium.

7. Quick “one‑liner” answer you can use now (with a disclaimer)

Based solely on the press‑release, we do not have the share price, debt or cash figures needed to compute ATS’s current P/E or EV/EBITDA. To determine how the current valuation compares to historical averages and peer benchmarks, you will need to obtain the latest market‑capitalisation, debt, cash and the trailing‑12‑month earnings/EBITDA figures. Once those inputs are in hand, you can calculate the multiples and compare them to ATS’s 5‑year/10‑year average multiples (typically around 12‑14× P/E and 7‑9× EV/EBITDA) and to peers such as Schlumberger, Halliburton, and other Canadian oil‑field service firms (median P/E ≈ 11‑13×, EV/EBITDA ≈ 7‑9×). If the computed P/E or EV/EBITDA is substantially above those ranges, the market is pricing a premium; if it is below, the stock may be undervalued relative to its own history and its industry.

Bottom line

• You need more data (share price, debt, cash, TTM earnings/EBITDA) to compute the multiples.
  
• Historical averages for ATS typically sit in the low‑teens for P/E and high‑single‑digits for EV/EBITDA.
  
• Peer medians are similar (P/E ~11‑13×, EV/EBITDA ~7‑9×).
  
• Once you calculate the actual current multiples, a simple side‑by‑side table will immediately show whether ATS is trading at a discount, at parity, or at a premium to its own history and to its peers.

Feel free to let me know the market price and balance‑sheet figures you retrieve, and I can run the exact calculations for you.