CAE Inc. (NYSE: CAE) is set to report earnings tomorrow and if you’re looking for an outside-the-box, tech-forward aviation stock, you should probably consider getting in ahead of them.
I’ve been following CAE for about three years now, which was when the company began a digital transformation that’s just now starting to take off.
So what does that mean? What does CAE do?
Well, at its core, CAE is a pilot trainer for both airlines and militaries.
The company makes training equipment and software that’s like a flight simulator on steroids.
It uses cloud computing, AI, and augmented reality technology that puts trainees inside an immersive digital environment, giving them the experience and training they need in a way that is cost-effective and safe.
After all, you can’t put a pilot in the air and then force the jet to malfunction just to see how they’ll react, right?
So you simulate it. And not with the Microsoft flight simulator we used to play with in school.
You use sophisticated, in-depth software, or even a physical flight-training apparatus.
With this technology, CAE can put a war-fighter on the bridge of a ship or in the cockpit of an F-18. They can even put a team of Navy SEALs or Green Berets on streets of Baghdad to rehearse a special forces mission.
It’s things like this that got CAE named Canada’s top defense company for 2025.
But that’s not all.
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Remember, that digital transformation I mentioned?
In addition to flight training, CAE recently launched a new AI-driven digital platform called Flightscape.
Flightscape provides real-time insights to increase efficiency and improve operational performance. That means optimizing flight crew schedules, refueling and maintenance, flight routes, in-flight services, and streamlining among other things.
So, while CAE maintains an unassailable position as the world’s leading pure-play simulation, training, and operational support company, it’s further branching out into airline operations management.
And the growth is more than evident in CAE’s earnings…
CAE Earnings
Like I said, CAE reports tomorrow, and if its flight pattern holds, it’s likely to beat.
That’s what it’s done in each of the past two quarters.
The company’s second-quarter earnings came in at $0.18 per share, topping the consensus estimate of $0.13.
And its third-quarter earnings (reported on February 13) registered $0.21 per share compared to the consensus of $0.20.
More than that, CAE reported:
- A 12% increase in consolidated revenue ($1.22 billion).
- A 31% increase in adjusted operating income ($190 million).
- A 21% improvement in adjusted EPS ($0.29, compared to $0.24 in the previous year).
- And a record $410 million in free cash flow.
The company also reported a record backlog of $20.3 billion after securing $2.2 billion in new orders in the third quarter alone.
Its civil aviation segment saw a 21% increase in revenue growth, bringing its segment-specific backlog to a record $8.8 billion.
And its defense segment achieved a book-to-sales ratio of 1.5x, contributing to a record $11.5 billion backlog.
That’s more than twice what it was a year ago.
For the current quarter, CAE expects revenue to climb 8.5% and EPS of $0.31, which would be a 244% year-over-year increase.
But like I said, CAE has been on a bit of a hot streak lately, so I could easily see them topping again.
However, if you want a real high-flying investment opportunity, you should check out my latest report here.
It details a company that’s taking Uber to the skies. It’s set to make a huge debut this year, too. So there’s no time to wait.
Fight on,
Jason Simpkins
Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more…
In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor’s page.
Be sure to visit our Angel Investment Research channel on YouTube and tune into Jason’s podcasts.
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