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ChampionX Corporation (CHX)
:CHX
US Market

ChampionX (CHX) AI Stock Analysis

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ChampionX

(NASDAQ:CHX)

69Neutral
ChampionX demonstrates strong financial health with consistent revenue growth and robust cash flow generation, despite having room for improvement in net profit margins. The technical indicators suggest a bearish trend, while its valuation appears reasonable with a moderate dividend yield.

ChampionX (CHX) vs. S&P 500 (SPY)

ChampionX Business Overview & Revenue Model

Company DescriptionChampionX Corporation (CHX) is a global leader in providing chemical solutions and technology-driven equipment for the energy industry. The company operates primarily in the oilfield services sector, offering a comprehensive range of products and services designed to enhance the efficiency and productivity of oil and gas operations. ChampionX's core offerings include production and automation technologies, chemical solutions, and drilling technologies, all aimed at optimizing the performance of its clients' assets.
How the Company Makes MoneyChampionX makes money through a diversified revenue model that includes the sale of chemical solutions and technology-driven equipment and services to the energy sector. Its key revenue streams are derived from production and automation technologies, which provide advanced equipment and software to improve oilfield operations, and its chemical solutions, which include specialty chemicals used in oil and gas extraction and processing. The company also benefits from significant partnerships with major oil and gas companies, which contribute to its earnings by ensuring a steady demand for its products and services. Additionally, ChampionX leverages its global presence and industry expertise to maintain a competitive edge, further driving its revenue growth.

ChampionX Financial Statement Overview

Summary
ChampionX presents a strong financial profile with consistent revenue growth and profitability improvements. The company effectively manages its leverage while maintaining strong cash flow generation. However, there is room to enhance net profit margins and strengthen the equity ratio for further financial resilience.
Income Statement
78
Positive
ChampionX has demonstrated solid revenue growth, with total revenue increasing from 2019 to 2024. Gross profit margin has remained stable, showing effective cost management. However, the net profit margin has room for improvement despite a positive trajectory since 2020. The EBITDA margin reflects strong operational efficiency.
Balance Sheet
72
Positive
The company's debt-to-equity ratio has improved over the years, indicating better leverage management. Return on equity is healthy, but the equity ratio suggests potential room for strengthening the financial structure. Overall, the balance sheet shows good financial stability with manageable debt levels.
Cash Flow
80
Positive
ChampionX has shown impressive free cash flow growth, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is robust, highlighting efficient cash conversion. The company has consistently maintained positive free cash flow, supporting its financial flexibility.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.63B3.76B3.81B3.07B1.90B
Gross Profit
1.19B1.14B898.66M743.27M409.17M
EBIT
468.07M506.61M300.12M204.61M-53.77M
EBITDA
744.57M719.36M616.36M441.89M-496.66M
Net Income Common Stockholders
320.27M314.24M154.97M113.30M-742.35M
Balance SheetCash, Cash Equivalents and Short-Term Investments
507.68M288.56M250.19M251.68M201.42M
Total Assets
3.47B3.24B3.39B3.53B3.48B
Total Debt
695.79M665.75M627.95M724.51M932.61M
Net Debt
188.11M377.20M377.76M472.83M731.19M
Total Liabilities
1.64B1.58B1.71B1.78B1.86B
Stockholders Equity
1.85B1.68B1.69B1.77B1.63B
Cash FlowFree Cash Flow
448.37M397.95M310.55M243.75M264.88M
Operating Cash Flow
589.68M540.27M413.36M328.22M310.04M
Investing Cash Flow
-215.34M-127.78M-87.99M-37.41M22.13M
Financing Cash Flow
-150.46M-373.17M-324.81M-234.35M-175.37M

ChampionX Technical Analysis

Technical Analysis Sentiment
Positive
Last Price28.54
Price Trends
50DMA
28.84
Positive
100DMA
29.20
Positive
200DMA
30.35
Negative
Market Momentum
MACD
-0.04
Positive
RSI
52.53
Neutral
STOCH
66.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHX, the sentiment is Positive. The current price of 28.54 is below the 20-day moving average (MA) of 29.33, below the 50-day MA of 28.84, and below the 200-day MA of 30.35, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 52.53 is Neutral, neither overbought nor oversold. The STOCH value of 66.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CHX.

ChampionX Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
BKBKR
79
Outperform
$41.44B13.8318.47%2.09%9.10%55.56%
FTFTI
77
Outperform
$10.64B13.9427.06%0.79%16.23%1403.29%
HAHAL
75
Outperform
$21.41B8.7925.14%2.73%-0.32%-3.41%
NONOV
75
Outperform
$5.63B9.3310.12%1.86%3.42%-35.98%
SLSLB
75
Outperform
$55.94B13.3221.59%2.70%9.58%6.53%
CHCHX
69
Neutral
$5.45B17.8118.18%1.29%-3.31%4.82%
57
Neutral
$8.36B5.49-6.03%7.47%0.03%-68.64%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CHX
ChampionX
28.54
-2.85
-9.08%
BKR
Baker Hughes Company
41.85
11.08
36.01%
FTI
TechnipFMC
25.88
3.73
16.84%
HAL
Halliburton
24.66
-11.25
-31.33%
NOV
NOV
14.25
-3.35
-19.03%
SLB
Schlumberger
40.08
-10.16
-20.22%

ChampionX Earnings Call Summary

Earnings Call Date: Feb 4, 2025 | % Change Since: -2.59% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The call presented a strong financial performance for ChampionX with significant growth in adjusted EBITDA, excellent free cash flow generation, and robust shareholder returns. However, the company faced challenges with flat revenue growth, declines in specific segments, and market uncertainties in North America. Despite these obstacles, the company remains optimistic about 2024, driven by international growth and opportunities in emissions technology.
Highlights
Strong Adjusted EBITDA Growth
ChampionX delivered a 25% year-over-year growth in adjusted EBITDA, reaching over 20% margin, which expanded by 430 basis points. This was driven by higher volumes, productivity, cost management, and higher selling prices.
Record Cash Flow and Shareholder Returns
Generated over $400 million of free cash flow and returned $343 million to shareholders, up 52% from 2022. The company increased its share repurchase program to $1.5 billion and raised the regular cash dividend by 12%.
International Growth and Diversification
International growth was strong in the fourth quarter at 6% sequentially, led by 15% growth in Middle East and Africa region. Production Chemical Technologies business grew 16% in 2023 in the U.S., and Production & Automation Technologies grew 16% internationally.
Positive Outlook for 2024
Expecting a growth year for ChampionX in 2024, both internationally and in North America, driven by production-oriented businesses. The EPA's methane standards are expected to drive accelerated growth in emissions business.
Lowlights
Flat Revenue and Decline in Certain Segments
Fourth quarter revenue was flat sequentially and down 4% year-over-year. Production Automation Technologies revenue decreased by 6% sequentially, and Drilling Technologies revenue fell by 15% sequentially.
Challenges in North American Short-Cycle Business
Short-cycle North American business, particularly Drilling Technologies, faced challenges with a sequential revenue decline of more than expected due to U.S. land activity slowdown and customer destocking.
Seasonal and Market Uncertainties
Facing near-term market uncertainty with respect to the timing and trajectory of U.S. land drilling and completions activity, impacting the first quarter outlook with expected lower international revenue due to seasonality.
Company Guidance
In the fourth quarter of 2023, ChampionX Corporation reported a strong financial performance with an adjusted EBITDA margin of 21%, flat sequentially, and a 25% year-over-year growth in adjusted EBITDA. The company achieved a 430 basis point expansion in adjusted EBITDA margin and generated over $400 million in free cash flow, with a return on invested capital reaching 18%, up 400 basis points from the prior year. Revenue was reported at $944 million, showing a 6% increase internationally, led by 15% growth in the Middle East and Africa and 7% in Latin America. North American revenue remained flat, with Production Chemical Technologies growing 16% in the U.S. for the full year. ChampionX returned 83% of free cash flow to shareholders, amounting to $343 million, and announced an increase in its share repurchase program to $1.5 billion. For 2024, the company expects continued revenue and earnings growth, with an emphasis on productivity projects and capital returns to shareholders.

ChampionX Corporate Events

M&A TransactionsBusiness Operations and Strategy
ChampionX to Sell US Synthetic for $300 Million
Neutral
Feb 25, 2025

On February 24, 2025, ChampionX announced a definitive agreement to sell its subsidiary, US Synthetic Corporation, to LongRange Capital for approximately $300 million. This divestiture is part of a larger acquisition strategy involving ChampionX and Schlumberger Limited, with the transaction expected to close following the completion of the merger between ChampionX and SLB. The sale of US Synthetic, which specializes in polycrystalline diamond cutter inserts and other drilling technologies, is anticipated to foster further growth under LongRange Capital’s ownership, while ChampionX continues to focus on its core oilfield technology offerings.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.