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CES Energy Solutions Corp (TSE:CEU)
:CEU
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CES Energy Solutions
(OTC:CEU)
78Outperform
CES Energy Solutions (CEU) vs. S&P 500 (SPY)
Market Cap
C$1.54B
Dividend Yield1.83%
Average Volume (3M)607.11K
Price to Earnings (P/E)8.5
Beta (1Y)0.98
Revenue Growth5.94%
EPS Growth46.19%
CountryCA
Employees2,237
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)0.82
Shares Outstanding224,765,120
10 Day Avg. Volume910,600
30 Day Avg. Volume607,111
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)N/A
Price to Sales (P/S)0.69
Price to Cash Flow (P/CF)5.50
P/FCF Ratio8.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.35Price Target Upside65.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
CES Energy Solutions Business Overview & Revenue Model
Company DescriptionCES Energy Solutions (CEU) is a leading provider of technically advanced consumable chemical solutions for the oil and gas industry. Operating in North America, the company specializes in drilling fluids, production chemicals, and specialty chemicals tailored to optimize the performance and efficiency of energy production processes. CES Energy Solutions serves a wide range of clients across various sectors, including upstream, midstream, and downstream operations.
How the Company Makes MoneyCES Energy Solutions primarily generates revenue through the sale of drilling fluids and production chemicals that are crucial for oil and gas exploration and production activities. The company offers a comprehensive suite of customizable chemical solutions designed to enhance wellbore stability, improve drilling efficiency, and ensure optimal production flow. Key revenue streams include the direct sale of these chemical products, as well as associated services such as technical support and application expertise. CES Energy Solutions leverages strategic partnerships with oilfield service companies and operators, ensuring a stable demand for its solutions. Additionally, the company's focus on innovation and sustainability in product development helps maintain its competitive edge and contributes significantly to its earnings.
CES Energy Solutions Financial Statement Overview
Summary
CES Energy Solutions shows strong profitability with increasing margins and revenue growth. The balance sheet is stable with manageable leverage, though debt levels require monitoring. Cash flow is solid but has shown volatility recently.Income Statement
CES Energy Solutions demonstrates robust profitability with a consistently increasing gross profit margin at 23.92% in TTM, and net profit margin at 8.62%. Revenue growth is strong, showing a 6.39% increase from the previous year. EBIT and EBITDA margins also indicate healthy operational efficiency at 11.34% and 14.83% respectively. These metrics highlight strong revenue growth and effective cost management.85
Very Positive
Balance Sheet
The company's balance sheet reflects a moderate debt-to-equity ratio of 0.57, indicating manageable leverage. The return on equity is impressive at 26.59%, showcasing effective utilization of equity to generate profits. The equity ratio stands at 50.62%, pointing towards balanced asset financing. Overall, the balance sheet is stable, but the company should monitor its debt levels to maintain financial health.74
Positive
Cash Flow
CES Energy Solutions shows a solid operating cash flow to net income ratio of 1.43, reflecting strong cash generation from operations. The free cash flow to net income ratio is 0.98, indicating effective conversion of earnings into cash. However, the free cash flow growth rate has decreased by 14.88%, suggesting potential volatility in managing capital expenditures. Cash flow management remains positive but requires attention to sustain growth.78
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.30B | 2.16B | 1.92B | 1.20B | 888.05M | 1.28B | Gross Profit |
| 550.92M | 465.34M | 396.95M | 261.08M | 165.62M | 273.38M | EBIT |
| 260.87M | 223.17M | 166.99M | 74.16M | -4.09M | 70.09M | EBITDA |
| 341.45M | 296.01M | 232.69M | 141.86M | -177.18M | 147.04M | Net Income Common Stockholders |
| 198.44M | 154.64M | 95.22M | 49.88M | -222.90M | 30.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| -33.10M | 0.00 | -59.65M | -42.02M | 18.25M | -44.85M | Total Assets |
| 1.32B | 1.38B | 1.41B | 1.09B | 857.89M | 1.22B | Total Debt |
| 488.69M | 463.72M | 551.13M | 437.20M | 317.10M | 407.63M | Net Debt |
| 521.78M | 463.72M | 610.77M | 479.23M | 298.85M | 452.48M | Total Liabilities |
| 624.24M | 719.27M | 801.95M | 600.92M | 402.23M | 540.46M | Stockholders Equity |
| 697.57M | 658.00M | 609.05M | 486.68M | 455.66M | 679.31M |
| Cash Flow | Free Cash Flow | ||||
| 193.98M | 227.88M | -55.91M | -101.83M | 130.92M | 136.33M | Operating Cash Flow |
| 283.19M | 301.78M | -2.74M | -74.41M | 156.68M | 187.30M | Investing Cash Flow |
| -91.39M | -71.83M | -46.79M | -12.76M | -16.89M | -43.36M | Financing Cash Flow |
| -190.36M | -229.95M | 49.53M | 68.91M | -120.14M | -143.94M |
CES Energy Solutions Technical Analysis
Negative
6.87
Price Trends
8.77
Negative
8.86
Negative
8.15
Negative
Market Momentum
-0.52
Positive
22.77
Positive
10.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CEU, the sentiment is Negative. The current price of 6.87 is below the 20-day moving average (MA) of 8.05, below the 50-day MA of 8.77, and below the 200-day MA of 8.15, indicating a bearish trend. The MACD of -0.52 indicates Positive momentum. The RSI at 22.77 is Positive, neither overbought nor oversold. The STOCH value of 10.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CEU.
CES Energy Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$355.78M | 5.87 | 11.04% | 3.94% | -0.83% | -27.55% | |
78 Outperform | C$1.54B | 8.46 | 26.23% | 1.83% | 5.94% | 46.19% | |
75 Outperform | C$828.84M | 8.07 | 21.89% | 4.29% | 0.84% | -1.74% | |
73 Outperform | C$410.02M | 14.37 | -1.55% | ― | -7.71% | 48.35% | |
68 Neutral | C$888.77M | 8.08 | 6.90% | ― | -0.02% | 60.38% | |
67 Neutral | C$296.29M | 7.17 | 10.71% | ― | 0.05% | -43.08% | |
57 Neutral | $8.36B | 5.49 | -6.03% | 7.47% | 0.03% | -68.64% |
* Energy Sector Average
Performance Comparison
TSE:CEU
CES Energy Solutions
6.87
2.22
47.87%
TSE:PD
Precision Drilling
63.18
-19.55
-23.63%
TSE:TCW
Trican Well Service
4.40
0.42
10.61%
TSE:ESI
Ensign Energy Services
2.22
-0.29
-11.55%
TSE:TOT
Total Energy Services
9.35
-0.31
-3.21%
TSE:STEP
STEP Energy Services
4.07
0.32
8.53%
CES Energy Solutions Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: -3.92% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
CES Energy Solutions Corp. reported strong financial results with record-breaking revenue and EBITDA, increased market share, and a substantial dividend increase. However, challenges such as margin degradation in drilling fluids, currency and tariff issues, and a working capital build were noted. Despite these challenges, the company's strategic actions and strong financial performance contributed to a predominantly positive outlook.Highlights
Second Best Quarterly Revenue
CES Energy Solutions Corp. reported $605.4 million in revenue for Q4 2024, which is 9.5% higher than Q4 of last year and just $1 million lower than their quarterly record.
Record-Breaking EBITDA
The company achieved an all-time record quarterly EBITDA of $103.2 million, marking a 22% increase compared to last year's Q4.
EBITDA Margin Improvement
The EBITDA margin improved to 17.1% in Q4 2024, up from 15.3% in Q4 2023.
Increased Market Share in North America
CES reached an industry-leading North American rig market share of over 27.7%, its highest ever in the North American land market.
Significant Share Repurchase
CES repurchased 10.6 million shares of the 19.2 million shares allowed under the current NCIB plan, representing 55% of the program.
Dividend Increase
The company announced a 42.5% increase in its quarterly dividend to $0.0425 per share from $0.03 per share.
Strong Free Cash Flow
CES reported a free cash flow of $34.6 million during the quarter and $186.9 million during 2024.
Increased Employee Count
The total number of employees at CES increased by 294 (or approximately 13%) over the year, reflecting growth.
Lowlights
Margin Degradation in Drilling Fluids
Transient margin degradation occurred in January due to a higher proportion of rigs drilling non-specialty portions of wells, anticipated to affect Q1 2025 margins.
Currency and Tariff Challenges
The roughly 8% decline in the Canadian dollar versus the U.S. dollar is causing the need to revisit pricing with customers. Canadian counter tariffs imposed may impact profitability.
Working Capital Build
A working capital build was noted, influenced by anticipation of tariffs and strategic purchasing.
Company Guidance
During the CES Energy Solutions Corp. Fourth Quarter 2024 Results Conference Call, key financial metrics and guidance for 2025 were highlighted. The company reported its second best quarterly revenue of $605.4 million, a 9.5% increase from the previous year, and a record quarterly EBITDA of $103.2 million, up 22% year-over-year. The EBITDA margin improved to 17.1% from 15.3% in Q4 2023. CES repurchased 10.6 million shares under its NCIB plan, representing 55% of the current program, and generated $34.6 million in free cash flow for the quarter. The company plans a 42.5% increase in quarterly dividends to $0.0425 per share. Looking ahead, CES anticipates $80 million in CapEx for 2025, with a focus on strategic acquisitions and maintaining a debt-to-EBITDAC ratio of 1x to 1.5x. The company holds a leading 27.7% market share in the North American rig market and expects continued growth in the U.S. and Canadian divisions. Despite challenges from tariffs and currency fluctuations, CES remains resilient, with plans to adjust pricing and production as needed.CES Energy Solutions Corporate Events
CES Energy Solutions Celebrates Record Q3 Performance
Nov 6, 2024
CES Energy Solutions Corp. reports a remarkable Q3 2024 with record revenue of $606.5 million and an adjusted EBITDAC of $102.5 million, representing a significant year-over-year growth. The company highlights its robust financial resilience and profitability driven by its unique business model and innovative chemical solutions. CES also declared a quarterly dividend, emphasizing its commitment to returning value to shareholders.
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.