# TransAlta (TAC.US)

Canonical: https://gigainvestors.com/s/TAC

Analysis as of: 2026-10-16T07:32:14.360Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: CAD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $12.66 per share; close as of 2026-10-15.

Estimated value: low $6.18 per share, central $6.96 per share, high $7.99 per share. Buy at or below the central value $6.96 per share. Valuation as of 2026-10-16T07:32:14.360Z; scenarios are not confidence intervals.

Expected annual return: 6.6% at the stated quote. About 6.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 5

- Operating margin variation: 1.39×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.20×

- FY2017: 0.06×

- FY2018: 0.07×

- FY2019: 0.14×

- FY2020: -0.05×

- FY2021: -0.09×

- FY2022: 0.18×

- FY2023: 0.32×

- FY2024: 0.21×

- FY2025: -0.09×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 22.2pp below the typical margin (limit 4pp)

- ROIC, median of available years: 3.4%

- ROIC, second-lowest year: -3.4%

- Typical minus recent gross margin: 22.2 pp

- Typical gross margin (annual median): 54.8%

- Recent gross margin (lower of latest and 3-year median): 32.6%

- Years with nonpositive capital: 0

- Capital spending / revenue: 17.4%

- ROIC including acquisitions, ten-year median: 3.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 5.9%

- FY2017: 1.7%

- FY2018: 2.2%

- FY2019: 4.5%

- FY2020: -1.2%

- FY2021: -3.6%

- FY2022: 7.2%

- FY2023: 21.7%

- FY2024: 8.0%

- FY2025: -3.4%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 3.75×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CAD 1.1B

- Net income, five-year total: CAD 299M

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: -1.6 pp

- Working capital / revenue, change between three-year averages: -13.6 pp

- Working capital / revenue, final three-year average: 4.6%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.57×

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 1.92×

- FY2025: -1.77×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 2.2% vs 8.0%

- Per-share earnings: 0.08 to 0.76 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.3%

- Ordinary dilution, 5-year annual growth: 1.6%

- Market cap gain: CAD 3.1B

- Cumulative retained earnings: CAD -1.8B

- Diluted shares, 10-year annual growth: 0.3%

- Diluted shares, 5-year annual growth: 1.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 33.2%

- Per-share value change: CAD 0.68

- Per-share value, starting three-year median: CAD 0.08

- Per-share value, ending three-year median: CAD 0.76

- Buybacks concentrated in cheaper years (correlation): 0.86

- Average buyback yield: 1.6%

- Buyback history: 8 years

- Debt-funded buybacks: No

- Acquisition spending: CAD 129M

- Cumulative net income, 10 years: CAD -95M

- ROIC, first three-year median: 2.2%

- ROIC, last three-year median: 8.0%

Chart: Earnings per share; fiscal year observations.

- FY2016: CAD 0.59

- FY2017: CAD -0.56

- FY2018: CAD -0.69

- FY2019: CAD 0.29

- FY2020: CAD -1.04

- FY2021: CAD -1.98

- FY2022: CAD 0.18

- FY2023: CAD 2.52

- FY2024: CAD 0.76

- FY2025: CAD -0.46

### accounting: pass

- Sloan accruals: -9.1%

- Receivables to sales index (DSRI): 1.29×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.54×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.2%

- FY2017: -7.6%

- FY2018: -10.8%

- FY2019: -8.1%

- FY2020: -10.1%

- FY2021: -16.7%

- FY2022: -7.7%

- FY2023: -8.9%

- FY2024: -6.0%

- FY2025: -9.1%

## Holders

- [Howard Marks](https://gigainvestors.com/oc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 28% since Oct 2025 · "Why TransAlta (TSX:TA) Is Down 12.2% After Weak Q3 Earnings and CEO Retirement News" (finance.yahoo.com, Nov 2025) · sales -15.5%

Story as of 2026-10-16T09:59:39.642Z; price observation 2026-10-15.

Price needs cash profits to grow 8.9% a year for ten years

- 2025-11-06: TransAlta Down in U.S. Pre-market trading After Booking Q3 Loss ([finance.yahoo.com](https://finance.yahoo.com/news/transalta-down-u-pre-market-123032813.html))

### Sales · FY2024–2025

sales -15.5%; source https://www.sec.gov/Archives/edgar/data/1144800/000114480026000015/tac-20251231_d2.htm; observed 2026-02-27.

- FY2016: CAD 2.4B 

- FY2017: CAD 2.3B 

- FY2018: CAD 2.2B 

- FY2019: CAD 2.3B 

- FY2020: CAD 2.1B 

- FY2021: CAD 2.7B 

- FY2022: CAD 3.0B 

- FY2023: CAD 3.4B 

- FY2024: CAD 2.8B 

- FY2025: CAD 2.4B 

### Gross margin · FY2025

gross margin 32.6%; source https://www.sec.gov/Archives/edgar/data/1144800/000114480026000015/tac-20251231_d2.htm; observed 2026-02-27.

- FY2016: 59.8% 

- FY2017: 56.0% 

- FY2018: 51.1% 

- FY2019: 53.7% 

- FY2020: 53.9% 

- FY2021: 54.7% 

- FY2022: 54.9% 

- FY2023: 65.1% 

- FY2024: 63.1% 

- FY2025: 32.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in utilities independent power producers; annual sales are CAD 2.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1144800/000114480026000015/tac-20251231_d2.htm (filed 2026-02-27); FY2025: revenue 2404039268; grossProfit 784360276; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 32.6% to 65.1% during 2023–25; it earns 3.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: grossProfit / revenue = 65.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: grossProfit / revenue = 63.1%.

- Source: https://www.sec.gov/Archives/edgar/data/1144800/000114480026000015/tac-20251231_d2.htm (filed 2026-02-27); FY2025: grossProfit / revenue = 32.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); 10-year return on capital observations [[2016,0.05915146645671382],[2017,0.017426470588235293],[2018,0.022132726317632637],[2019,0.045426353602866114],[2020,-0.012295236598019179],[2021,-0.036414657666345225],[2022,0.07192123359033131],[2023,0.21706698986337594],[2024,0.0804057119886547],[2025,-0.0344964593830215]]; median 0.03377953996024938. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back CAD 24 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2016: growth capex 0; upkeep 379000000; owner earnings 454000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2017: growth capex 0; upkeep 389000000; owner earnings 159000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2018: growth capex 0; upkeep 297000000; owner earnings 215000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2019: growth capex 0; upkeep 431000000; owner earnings 360000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2020: growth capex 0; upkeep 500000000; owner earnings 11000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2022: growth capex 350000000; upkeep 599000000; owner earnings 50000000. Growth capex / owner earnings = 7.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: growth capex 267000000; upkeep 621000000; owner earnings 695000000. Growth capex / owner earnings = 0.3841726618705036.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: growth capex 0; upkeep 321000000; owner earnings 439000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1144800/000114480026000015/tac-20251231_d2.htm (filed 2026-02-27); FY2025: growth capex 0; upkeep 248797081; owner earnings 244304670. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Dividend observations: [[2016,111000000],[2017,86000000],[2018,86000000],[2019,85000000],[2020,86000000],[2021,87000000],[2022,97000000],[2023,109000000],[2024,123000000],[2025,125897318]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1144800/000114480026000015/tac-20251231_d2.htm (filed 2026-02-27); FY2025: cash repurchases 23980441 CAD.

### Are managers owners

Insiders own 0.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TAC.US SharesStats.PercentInsiders = 0.268 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 8.9% yearly over ten years; actual growth was 6.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Ten-year compound average after fade. Initial solved rate 0.11518594510561486. Price 12.66; FX 0.7047; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.4340277777777778 → FY2025 0.8225746464646465. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $4.45 per share

- 2016-11: $5.45 per share

- 2016-12: $5.50 per share

- 2017-01: $5.90 per share

- 2017-02: $5.35 per share

- 2017-03: $5.85 per share

- 2017-04: $5.10 per share

- 2017-05: $5.60 per share

- 2017-06: $6.40 per share

- 2017-07: $6.50 per share

- 2017-08: $6.15 per share

- 2017-09: $5.85 per share

- 2017-10: $5.90 per share

- 2017-11: $6.00 per share

- 2017-12: $5.95 per share

- 2018-01: $5.50 per share

- 2018-02: $5.55 per share

- 2018-03: $5.45 per share

- 2018-04: $5.28 per share

- 2018-05: $5.10 per share

- 2018-06: $5.00 per share

- 2018-07: $5.65 per share

- 2018-08: $5.85 per share

- 2018-09: $5.63 per share

- 2018-10: $5.26 per share

- 2018-11: $5.37 per share

- 2018-12: $4.12 per share

- 2019-01: $5.48 per share

- 2019-02: $6.09 per share

- 2019-03: $7.34 per share

- 2019-04: $6.73 per share

- 2019-05: $6.61 per share

- 2019-06: $6.51 per share

- 2019-07: $6.12 per share

- 2019-08: $6.44 per share

- 2019-09: $6.50 per share

- 2019-10: $5.89 per share

- 2019-11: $6.74 per share

- 2019-12: $7.16 per share

- 2020-01: $7.47 per share

- 2020-02: $7.48 per share

- 2020-03: $5.24 per share

- 2020-04: $5.86 per share

- 2020-05: $5.84 per share

- 2020-06: $5.93 per share

- 2020-07: $6.52 per share

- 2020-08: $6.44 per share

- 2020-09: $6.15 per share

- 2020-10: $5.93 per share

- 2020-11: $6.93 per share

- 2020-12: $7.59 per share

- 2021-01: $8.77 per share

- 2021-02: $8.69 per share

- 2021-03: $9.46 per share

- 2021-04: $9.83 per share

- 2021-05: $9.02 per share

- 2021-06: $9.98 per share

- 2021-07: $10.42 per share

- 2021-08: $9.80 per share

- 2021-09: $10.56 per share

- 2021-10: $11.22 per share

- 2021-11: $10.17 per share

- 2021-12: $11.12 per share

- 2022-01: $10.86 per share

- 2022-02: $10.17 per share

- 2022-03: $10.36 per share

- 2022-04: $10.73 per share

- 2022-05: $11.39 per share

- 2022-06: $11.40 per share

- 2022-07: $11.42 per share

- 2022-08: $9.38 per share

- 2022-09: $8.83 per share

- 2022-10: $8.82 per share

- 2022-11: $9.35 per share

- 2022-12: $8.97 per share

- 2023-01: $9.73 per share

- 2023-02: $8.09 per share

- 2023-03: $8.75 per share

- 2023-04: $8.92 per share

- 2023-05: $9.63 per share

- 2023-06: $9.36 per share

- 2023-07: $10.21 per share

- 2023-08: $9.59 per share

- 2023-09: $8.70 per share

- 2023-10: $7.32 per share

- 2023-11: $8.15 per share

- 2023-12: $8.31 per share

- 2024-01: $7.24 per share

- 2024-02: $6.87 per share

- 2024-03: $6.43 per share

- 2024-04: $6.64 per share

- 2024-05: $7.20 per share

- 2024-06: $7.08 per share

- 2024-07: $7.54 per share

- 2024-08: $8.80 per share

- 2024-09: $10.36 per share

- 2024-10: $10.43 per share

- 2024-11: $11.26 per share

- 2024-12: $14.15 per share

- 2025-01: $11.48 per share

- 2025-02: $10.34 per share

- 2025-03: $9.35 per share

- 2025-04: $8.91 per share

- 2025-05: $9.76 per share

- 2025-06: $10.79 per share

- 2025-07: $12.05 per share

- 2025-08: $12.30 per share

- 2025-09: $13.67 per share

- 2025-10: $17.67 per share

- 2025-11: $14.55 per share

- 2025-12: $12.64 per share

- 2026-01: $12.78 per share

- 2026-02: $13.74 per share

- 2026-03: $13.10 per share

- 2026-04: $12.48 per share

- 2026-05: $14.22 per share

- 2026-06: $13.83 per share

- 2026-07: $12.50 per share

- 2026-08: $12.09 per share

- 2026-09: $12.08 per share

- 2026-10: $13.13 per share

## Annual estimated value (USD per share)

- FY2016: low $4.16 per share, central $4.65 per share, high $5.30 per share

- FY2017: low $4.91 per share, central $5.49 per share, high $6.27 per share

- FY2018: low $5.92 per share, central $6.72 per share, high $7.79 per share

- FY2019: low $7.01 per share, central $7.86 per share, high $8.98 per share

- FY2020: low $7.32 per share, central $8.10 per share, high $9.13 per share

- FY2021: low $7.65 per share, central $8.39 per share, high $9.36 per share

- FY2022: low $2.29 per share, central $2.48 per share, high $2.75 per share

- FY2023: low $2.29 per share, central $2.51 per share, high $2.80 per share

- FY2024: low $1.87 per share, central $2.04 per share, high $2.26 per share

- FY2025: low $6.89 per share, central $7.77 per share, high $8.93 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:37:59.336Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 40-F filing](https://www.sec.gov/Archives/edgar/data/1144800/000114480026000015/tac-20251231_d2.htm); period 2025-12-31, filed 2026-02-27.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.