Some of the best opportunities on the TSX show up when a strong business gets punished by short-term noise. Boyd Group Services (TSX: BYD) may be that kind of setup right now.
The collision repair giant has fallen more than 55% from its record high, yet its latest results tell a very different story than the stock price suggests.
Revenue is rising, profits are expanding, and the company closed its biggest acquisition ever. For patient investors, this gap between performance and price could be the setup worth watching heading into the back half of 2026.
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Why the Canadian stock is down 55%
Boyd operates one of the largest collision repair networks in North America, running shops under the Boyd Autobody and Gerber Collision brands. The business fixes cars after accidents, work that mostly comes through insurance companies rather than walk-in customers.
For the past two years, that pipeline of work slowed down. Fewer people were filing insurance claims as premiums rose and drivers became more cautious about reporting minor accidents.
On the May 13 earnings call, CEO Brian Kaner explained that claims volumes fell as much as several percentage points during that stretch, which weighed on sales growth across the entire industry, not just Boyd.
At the same time, Boyd took on debt to fund its acquisitions, including the US$1.3 billion purchase of Joe Hudson’s Collision Center, which closed in January 2026.
Rising debt combined with slower sales growth tends to scare investors, and the stock price reflects that fear.
The bull case for the undervalued TSX stock
The first quarter of 2026 tells a more encouraging story.
- Sales rose 28% year over year to a record US$997 million, while adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) rose 52% to US$122 million.
- Its EBITDA margin expanded by 200 basis points year over year to 12.3%. Much of that improvement came from Project 360, an internal cost-cutting and efficiency program.
- Boyd has already banked over US$60 million in savings from that program and its acquisition synergies, up from US$40 million at the end of 2025.
- Management expects another $30 million this year, with $50 million more coming between 2027 and 2029, for a total of $140 million in savings.
The Joe Hudson’s deal added 258 locations and pushed Boyd’s total store count up 33% to 1,312 shops. That single transaction was the largest in company history.
Management said on the call that store conversions to Boyd’s systems finished shortly after the quarter ended, which should let those locations return to normal performance levels going forward.
Perhaps most important for investors watching the recovery story, claims volumes appear to be stabilizing.
Management noted that industry claims declined only 0% to 2% in the first quarter, which is back in line with the company’s long-term growth framework. April same-store sales were already approaching the low end of that 3% to 5% target range.
Paying for the Joe Hudson’s deal pushed Boyd’s net debt to $2 billion at the end of the first quarter, compared with $488 million just three months earlier.
Leverage, measured as debt relative to earnings, fell to about 2.9 times from 3.1 times in the prior quarter. Management said on the call it still expects leverage to reach 2.6 times as early as the end of 2026, helped by the cash flow the business generates each quarter.
Notably, Boyd intends to keep reinvesting cash flow into new locations and small acquisitions, a strategy that has historically paid off for long-term shareholders.
Given a free cash flow (FCF) margin of 10%, Boyd Group could end 2029 with a FCF of $500 million based on revenue estimates. If the Canadian stock is priced at 10 times forward FCF, it could return over 80% within the next 30 months.
