Cargojet (TSX: CJT) sees Q1 revenue surge 45.7%. Airline stock to buy?

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Cargojet (TSX: CJT) sees Q1 revenue surge 45.7%. Airline stock to buy?

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Cargojet (TSX: CJT) sees Q1 revenue surge 45.7%. Airline stock to buy?
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Highlights

  • Stocks of Cargojet Inc (TSX: CJT) jumped by almost four per cent at 10:42 AM EST on Monday, May 2.
  • The Mississauga, Ontario-headquartered company reported total revenues of C$ 233.6 million in Q1 FY2022 against C$ 160.3 million in Q1 2021.
  • CJT stock, however, has plummeted by nearly 15 per cent in a year.

Stocks of Cargojet Inc (TSX: CJT) jumped by almost four per cent at 10:42 AM EST on Monday, May 2, after the company announced its quarterly results for the first three months of fiscal 2022.

President and CEO of Cargojet Dr Ajay Virmani pointed out that the air cargo company has continuously evolved with the changing air cargo landscape since March 2020. He said that the recent geopolitical worries strained the already struggling supply chain system. But it also created new opportunities for the air cargo industry, and Cargojet is well-positioned to capitalize on emerging opportunities, he added.

That said, let us discuss Cargojet’s financials and stock performance in detail.

Cargojet Inc (TSX: CJT)’s Q1 FY2022 results

The Mississauga, Ontario-headquartered company reported total revenues of C$ 233.6 million in the first quarter of FY2022 against C$ 160.3 million in the first three months of 2021. The air cargo company recorded an increased gross margin of C$ 66.9 million in the latest quarter compared to C$ 45.3 million in 2021.

Cargojet’s adjusted EBITDA and Adjusted EBITDAR amounted to C$ 83 million in Q1 FY2022, up from C$ 64.2 million a year ago. However, it posted a net loss of C$ 56.4 million in the latest quarter against a net profit of C$ 89.4 million in Q1 2021. The decrease in net income came despite a year-on-year (YoY) growth of 45.7 per cent in total revenues, supported by robust demand for the global air cargo.

When excluding warrant valuation loss or gain, the company recorded a net profit of C$ 30.4 million in the latest quarter compared to C$ 7.5 million in Q1 2021.

On a YoY basis, its Domestic Network saw an improvement of 10.3 per cent, and ACMI recorded 36.2 per cent in growth while Charter business notably grew 298 per cent in Q1 FY2022. Its adjusted free cash flow amounted to C$ 42.7 million in the latest quarter, up from C$ 35.2 million in Q1 2021.

Cargojet Inc (TSX: CJT)’s Q1 2022 results

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Cargojet’s stock performance

Cargojet’s stock was trading at C$ 155.86 per share at 10:42 AM EST on May 2, with a decline of nearly 15 per cent in the past one year.

According to Refinitiv, Cargojet crossed the Relative Strength Index (RSI) value of 70 in January 2021, then fell sharply below 30 in early March, and it again crossed 70 in March-end. The data suggest that its RSI value was moving up around 43.31 when writing this on May 2. 

Bottomline

Cargojet agreed to provide air transportation services for DHL Network Operations (USA) Inc’s global network for five years on March 29. The agreement also included a renewal option for an additional two years. Cargojet expects to enhance its earnings and cash flows with this long-term strategic deal.

Also read: IFC, FFH, CIX, GSY and IGM: 5 TSX financial stocks to buy in May 2022

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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