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ADF Group Inc. SV (TSE:DRX)
:DRX
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ADF Group Inc. SV
(TSX:DRX)
82Outperform
Positive Factors
Financial Performance
ADF Group reported financial results that largely beat estimates, with revenue of $107.4M and EBITDA of $23.1M surpassing expectations.
Shareholder Returns
ADF announced a cash utilization strategy including the intention to repurchase up to 3.0M shares and doubling its semi-annual dividend to $0.02/share.
Negative Factors
Market Conditions
U.S. non-residential construction spending growth has slowed, although figures are still reaching new all-time highs.
ADF Group Inc. SV (DRX) vs. S&P 500 (SPY)
Market Cap
C$152.27M
Dividend Yield0.57%
Average Volume (3M)93.43K
Price to Earnings (P/E)2.9
Beta (1Y)-0.20
Revenue Growth19.21%
EPS Growth105.30%
CountryCA
Employees545
SectorIndustrials
Sector Strength70
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)1.84
Shares Outstanding16,652,596
10 Day Avg. Volume157,475
30 Day Avg. Volume93,432
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)N/A
Price to Sales (P/S)0.64
Price to Cash Flow (P/CF)-8.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
ADF Group Inc. SV Business Overview & Revenue Model
Company DescriptionADF Group Inc. SV (DRX) is a leading player in the steel fabrication industry, specializing in the design, engineering, fabrication, and installation of complex steel structures. The company serves sectors such as commercial, industrial, institutional, and public infrastructure, offering a comprehensive range of services including the fabrication of heavy steel components and the installation of structural steelwork. ADF Group is recognized for its expertise in delivering large-scale projects with precision and efficiency.
How the Company Makes MoneyADF Group Inc. generates revenue primarily through contracts for the fabrication and installation of steel structures. The company secures projects across diverse sectors, which often involve long-term contracts that provide a steady stream of income. Key revenue streams include engineering services, fabrication of steel components, and on-site installation services. ADF Group often establishes partnerships with construction firms and project developers, contributing significantly to its earnings. Additionally, its reputation for handling complex and large-scale projects attracts contracts from major infrastructure and commercial developments, further bolstering its revenue.
ADF Group Inc. SV Financial Statement Overview
Summary
ADF Group Inc. demonstrates a solid financial performance across all key metrics. Revenue and profit margins are on an upward trajectory, indicating robust growth and efficiency. The balance sheet exhibits a strong capital structure with low leverage, enhancing financial stability. Cash flow generation is strong, underscoring effective cash management. Overall, the company is well-positioned for continued financial health and growth.Income Statement
The company shows strong revenue growth with a significant increase from $250.89 million in 2023 to $350.63 million in TTM 2024, indicating a 39.82% growth rate. Gross profit and net profit margins are healthy at 29.73% and 16.60% respectively in TTM 2024. EBIT and EBITDA margins are also robust, at 16.84% and 24.87%, reflecting operational efficiency and strong earnings capability.85
Very Positive
Balance Sheet
The balance sheet is solid with a debt-to-equity ratio of 0.29, showing conservative leverage. The equity ratio stands at 52.90%, indicating a strong capital structure. Return on equity is impressive at 35.77%, illustrating effective use of equity. The overall financial position is stable, with low risk due to manageable debt levels.78
Positive
Cash Flow
Cash flow statements are strong with a significant free cash flow growth of 5.30% from the previous year. The operating cash flow to net income ratio is at a healthy 1.44, indicating strong cash generation relative to earnings. The free cash flow to net income ratio at 1.29 further supports robust cash management and operational efficiency.88
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 350.63M | 331.02M | 250.89M | 280.74M | 172.59M | 179.71M | Gross Profit |
| 104.24M | 72.92M | 35.57M | 24.69M | 26.20M | 16.51M | EBIT |
| 59.03M | 50.14M | 20.80M | 9.01M | 11.43M | 502.00K | EBITDA |
| 87.21M | 55.82M | 24.18M | 17.29M | 15.60M | 4.82M | Net Income Common Stockholders |
| 58.21M | 37.62M | 14.94M | 9.56M | 6.87M | -2.13M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 8.73M | 72.38M | 7.19M | 7.13M | 17.81M | 3.98M | Total Assets |
| 137.81M | 328.61M | 271.62M | 201.05M | 189.95M | 173.54M | Total Debt |
| 10.14M | 48.84M | 51.52M | 36.67M | 25.58M | 40.16M | Net Debt |
| 2.19M | -23.54M | 44.33M | 29.54M | 7.78M | 36.18M | Total Liabilities |
| 33.86M | 166.47M | 146.63M | 92.60M | 90.39M | 79.14M | Stockholders Equity |
| 103.96M | 162.13M | 124.98M | 108.45M | 99.56M | 94.41M |
| Cash Flow | Free Cash Flow | ||||
| 75.15M | 71.37M | -14.77M | -19.40M | 27.02M | -2.53M | Operating Cash Flow |
| 84.09M | 77.86M | -2.61M | 2.67M | 28.84M | -894.00K | Investing Cash Flow |
| -8.54M | -6.27M | -12.08M | -21.99M | -1.75M | -670.00K | Financing Cash Flow |
| -54.45M | -6.69M | 14.16M | 9.20M | -12.44M | 1.36M |
ADF Group Inc. SV Technical Analysis
Negative
5.30
Price Trends
7.64
Negative
8.45
Negative
10.25
Negative
Market Momentum
-0.55
Positive
29.65
Positive
10.42
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DRX, the sentiment is Negative. The current price of 5.3 is below the 20-day moving average (MA) of 7.02, below the 50-day MA of 7.64, and below the 200-day MA of 10.25, indicating a bearish trend. The MACD of -0.55 indicates Positive momentum. The RSI at 29.65 is Positive, neither overbought nor oversold. The STOCH value of 10.42 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DRX.
ADF Group Inc. SV Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | C$152.27M | 2.88 | 34.27% | 0.57% | 19.21% | 105.30% | |
76 Outperform | C$1.13B | 23.15 | 8.63% | 3.37% | 3.68% | 19.78% | |
76 Outperform | C$1.08B | 10.65 | 26.59% | 3.46% | 21.39% | 37.48% | |
75 Outperform | C$31.38B | 44.49 | 9.33% | 0.62% | 11.98% | 22.53% | |
68 Neutral | C$730.03M | 22.77 | 6.73% | ― | 4.84% | 67.68% | |
62 Neutral | $7.70B | 13.14 | 3.53% | 3.32% | 3.90% | -14.25% | |
51 Neutral | C$1.07B | ― | -5.87% | 4.48% | -8.64% | -136.62% |
* Industrials Sector Average
Performance Comparison
TSE:DRX
ADF Group Inc. SV
5.34
-7.33
-57.85%
TSE:BDT
Bird Construction
20.09
1.99
10.99%
TSE:GDI
GDI Integrated
30.97
-8.03
-20.59%
TSE:SIS
Savaria
15.79
-0.79
-4.76%
TSE:ARE
Aecon Group Inc.
16.79
0.77
4.81%
TSE:WSP
WSP Global
245.46
36.78
17.63%
ADF Group Inc. SV Earnings Call Summary
Earnings Call Date: Apr 10, 2025 | % Change Since: -30.35% | Next Earnings Date: Jun 4, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant improvements in net income, margins, and EBITDA, despite a slight quarterly revenue decline and some uncertainties related to the order backlog and market conditions.Highlights
Year-to-Date Revenue Growth
Year-to-date revenues reached $262.2 million, reflecting an 8.1% increase compared to last year.
Significant Increase in Gross Margins and EBITDA
Gross margins for the quarter were 30.4%, up from 24.4% in the previous year, and year-to-date margins were 31.7%, up from 21.1%. Adjusted EBITDA increased by 78.1% year-over-year.
Strong Net Income Growth
The company reported a net income of $16.4 million for the quarter, a significant increase from $11.2 million the previous year. Year-to-date net income increased by 75.9%.
Order Backlog and Strategic NCIB
The company has an order backlog of $330.3 million and announced a Normal Course Issuer Bid (NCIB) to repurchase shares, indicating confidence in future growth.
Lowlights
Quarterly Revenue Decrease
Quarterly revenues were $80 million, which is $2.2 million lower than the same quarter last year.
Challenges with Order Backlog
Although confident about future contracts, there is a noted decrease in the order backlog from the beginning of the year.
Impact of U.S. Election and Tariffs
There is uncertainty due to the U.S. election and recent tariff announcements, which may cause market hesitation.
Company Guidance
During the ADF Group Inc.'s earnings call for Q3 2025, several key metrics and pieces of guidance were highlighted. The company reported revenues of $80 million for the quarter, a decrease of $2.2 million compared to the previous year, but a year-to-date increase of 8.1% to $262.2 million. The gross margin for the quarter improved to 30.4%, up from 24.4% in the same quarter last year, with an adjusted EBITDA of $24 million, marking a significant increase from the previous year's $17.8 million. Year-to-date, the gross margin rose to 31.7%, and the adjusted EBITDA saw a 78.1% increase to $72 million. Net income for the quarter was $16.4 million, or $0.55 per share, compared to $11.2 million, or $0.34 per share, in the previous year, with a year-to-date net income of $47.7 million, reflecting a 75.9% increase. The company closed the quarter with $65.5 million in cash and cash equivalents and a working capital of $1.4 million. The order backlog stood at $330.3 million, and the Board authorized a normal course issuer bid to repurchase up to 10% of the public float, highlighting confidence in their growth prospects despite some market uncertainties.ADF Group Inc. SV Corporate Events
Business Operations and Strategy
ADF Group Secures $120 Million in New Contracts Across North America
Positive
Feb 26, 2025
ADF Group Inc. has announced the acquisition of new contracts in Quebec and the Western United States, totaling $120 million. These contracts include significant projects such as the renovation of a sports complex and various structural steel contracts in the recreational sector. The projects will be executed over approximately 15 months, involving ADF’s fabrication plants in Quebec and Montana. This development adds to ADF’s existing order backlog of $330.3 million, potentially enhancing its market position and operational capacity.
Executive/Board ChangesBusiness Operations and Strategy
ADF Group Inc. Appoints Luc Reny to Board of Directors
Positive
Feb 3, 2025
ADF Group Inc. has appointed Mr. Luc Reny as an independent member of its Board of Directors, effective January 31, 2025. Mr. Reny brings extensive experience from his roles in Power Corporation and various other organizations, enhancing ADF’s strategic capabilities. His appointment is expected to support ADF’s continued growth and strengthen its market position by leveraging his expertise in financial and governance areas.
ADF Group’s Financial Gains and Strategic Outlook
Dec 12, 2024
ADF Group Inc. reported a strong financial performance for the nine months ending October 31, 2024, with revenues climbing 8.1% to $262.2 million and net income rising significantly. The company attributes this growth to improved gross margins, driven by increased fabrication volume and successful investments in automation. ADF remains well-positioned to maintain its operations and pursue development projects, with a solid cash flow and substantial working capital.
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.