Based on the measurements of profitability obtained from Canadian Pacific's financial statements, Canadian Pacific's profitability may be sliding down. It has an above-average risk of reporting lower numbers next quarter. Profitability indicators assess Canadian Pacific's ability to earn profits and add value for shareholders.
Canadian Pacific Price To Sales Ratio
8.17
At this time, Canadian Pacific's Price To Sales Ratio is very stable compared to the past year. As of the 11th of December 2024, EV To Sales is likely to grow to 10.04, while Days Sales Outstanding is likely to drop 46.26. At this time, Canadian Pacific's Operating Income is very stable compared to the past year. As of the 11th of December 2024, Net Income is likely to grow to about 4.1 B, while Accumulated Other Comprehensive Income is likely to drop (648.9 M).
For Canadian Pacific profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Canadian Pacific to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Canadian Pacific Railway utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Canadian Pacific's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Canadian Pacific Railway over time as well as its relative position and ranking within its peers.
Please note, there is a significant difference between Canadian Pacific's value and its price as these two are different measures arrived at by different means. Investors typically determine if Canadian Pacific is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Canadian Pacific's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Canadian Pacific Railway Net Income vs. Price To Sales Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Canadian Pacific's current stock value. Our valuation model uses many indicators to compare Canadian Pacific value to that of its competitors to determine the firm's financial worth.
Canadian Pacific Railway is number one stock in price to sales category among its peers. It also is number one stock in net income category among its peers making up about 563,754,343 of Net Income per Price To Sales. At this time, Canadian Pacific's Price To Sales Ratio is very stable compared to the past year. Comparative valuation analysis is a catch-all model that can be used if you cannot value Canadian Pacific by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Canadian Pacific's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.
Canadian Net Income vs. Price To Sales
Price to Sales ratio is typically used for valuing equity relative to its own past performance as well as to performance of other companies or market indexes. In most cases, the lower the ratio, the better it is for investors. However, it is advisable for investors to exercise caution when looking at price-to-sales ratios across different industries.
Canadian Pacific
P/S
=
MV Per Share
Revenue Per Share
=
6.97 X
The most critical factor to remember is that the price of equity takes a firm's debt into account, whereas the sales indicators do not consider financial leverage. Generally speaking, Price to Sales ratio shows how much market values every dollar of the company's sales.
Net income is the profit of a company for the reporting period, which is derived after taking revenues and gains and subtracting all expenses and losses. Net income is one of the most-watched numbers by money managers as well as individual investors.
Canadian Pacific
Net Income
=
(Rev + Gain)
-
(Exp + Loss)
=
3.93 B
Because income is reported on the Income Statement of a company and is measured in dollars some investors prefer to use Profit Margin, which measures income as a percentage of sales.
Canadian Net Income Comparison
Canadian Pacific is currently under evaluation in net income category among its peers.
Canadian Pacific Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Canadian Pacific, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Canadian Pacific will eventually generate negative long term returns. The profitability progress is the general direction of Canadian Pacific's change in net profit over the period of time. It can combine multiple indicators of Canadian Pacific, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Profitability drivers are factors that can directly affect your investment outlook on Canadian Pacific. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Canadian Pacific position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Canadian Pacific's important profitability drivers and their relationship over time.
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Canadian Pacific position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Canadian Pacific will appreciate offsetting losses from the drop in the long position's value.
Canadian Pacific Pair Trading
Canadian Pacific Railway Pair Trading Analysis
The ability to find closely correlated positions to Canadian Pacific could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Canadian Pacific when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Canadian Pacific - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Canadian Pacific Railway to buy it.
The correlation of Canadian Pacific is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Canadian Pacific moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Canadian Pacific Railway moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Canadian Pacific can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
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When determining whether Canadian Pacific Railway is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Canadian Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Canadian Pacific Railway Stock. Highlighted below are key reports to facilitate an investment decision about Canadian Pacific Railway Stock:
You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
To fully project Canadian Pacific's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Canadian Pacific Railway at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Canadian Pacific's income statement, its balance sheet, and the statement of cash flows.
Potential Canadian Pacific investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Canadian Pacific investors may work on each financial statement separately, they are all related. The changes in Canadian Pacific's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Canadian Pacific's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
