Enerflex (EFX) AI Stock Analysis

• Market Cap: C$1.12B
• Dividend Yield: 1.38%
• Average Volume (3M): 563.58K
• Price to Earnings (P/E): 25.6
• Beta (1Y): 1.21
• Revenue Growth: 4.51%
• EPS Growth: N/A
• Country: CA
• Employees: 4,600
• Sector: Energy
• Sector Strength: 46
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.36
• Shares Outstanding: 124,143,180
• 10 Day Avg. Volume: 531,952
• 30 Day Avg. Volume: 563,582
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.39
• Price to Cash Flow (P/CF): 2.10
• P/FCF Ratio: 2.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$16.77
• Price Target Upside: 85.10% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Enerflex's overall score reflects a mix of strengths and challenges. The company shows strong cash flow management and operational efficiency, but faces challenges with declining revenue and high valuation. Technical indicators suggest a bearish trend, though the stock could be nearing an oversold condition. The positive outlook from the earnings call and corporate events supports future performance, but geopolitical concerns and expected margin normalization introduce some uncertainty.

Positive Factors

Capital Allocation

With leverage now at the lower end of its target range, the company holds flexibility around capital allocation.

Financial Performance

EFX's results exceeded expectations driven by stable EI/AMS work and a strong jump in ES margins.

Negative Factors

Price Target

The price target is decreased to $16 from $20, mostly reflecting some additional macro uncertainty.

Enerflex Business Overview & Revenue Model

Company Description

Enerflex Ltd. supplies natural gas compression, oil and gas processing, refrigeration systems, energy transition solutions, and electric power generation equipment to the oil and natural gas industry. The company provides custom and standard compression packages for reciprocating and screw compressor applications; and designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, refrigeration systems, and electric power solutions, as well as engages in re-engineering, re-configuration, and re-packaging of compressors for various field applications; and modular processing equipment and waste gas systems for natural gas facilities. It also offers after-market services, parts distribution, operations and maintenance solutions, equipment optimization and maintenance programs, manufacturer warranties, exchange components, long-term service agreements, and technical services. In addition, the company rents natural gas compressors totaling approximately 800,000 horsepower. It serves small to large independent producers, integrated oil and natural gas companies, midstream and petrochemical companies, power generation companies, users of natural gas-fired electric power, and carbon capture players in Canada, the United States, Argentina, Bolivia, Brazil, Colombia, Mexico, the United Kingdom, Bahrain Kuwait, Oman, the United Arab Emirates, Australia, New Zealand, Indonesia, Malaysia, and Thailand. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.

How the Company Makes Money

Enerflex makes money through the sale and leasing of natural gas compression and processing equipment, as well as providing related services such as installation, maintenance, and operational support. Key revenue streams include equipment sales, aftermarket services, and long-term service contracts. The company also benefits from strategic partnerships and joint ventures in various regions, allowing it to expand its market reach and enhance its service offerings. Additionally, Enerflex engages in energy infrastructure projects, contributing to its earnings through the development and operation of energy facilities.

Enerflex Financial Statement Overview

Summary

Enerflex is navigating a challenging revenue environment with improved operational efficiency and robust cash flow management. The balance sheet remains healthy, albeit with moderate leverage. While profitability metrics show room for improvement, the company's ability to generate cash flows provides a positive outlook.

Income Statement

Enerflex has shown a resilient performance in the TTM with a positive gross profit margin of 19.3% and a net profit margin of 1.0%, indicating a slight profitability. However, there is a decline in total revenue from the previous year, which reflects a negative growth trajectory. EBIT and EBITDA margins have improved, showing efficient operations despite revenue pressures.

Balance Sheet

The company maintains a stable financial position with an equity ratio of 37.6%, indicating a balanced approach to financing its assets. However, the debt-to-equity ratio of 0.74 suggests moderate leverage. Enerflex's return on equity is relatively low at 2.6%, indicating underutilization of shareholder funds for generating profits.

Cash Flow

Enerflex exhibits strong cash flow management with a significant increase in free cash flow, leading to a robust free cash flow to net income ratio. The operating cash flow to net income ratio is healthy, supporting liquidity. The company has successfully turned around its cash flow from previous deficits.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.41B	3.16B	1.78B	960.16M	1.22B
	Gross Profit
504.00M	555.50M	322.72M	219.55M	298.18M
	EBIT
173.00M	162.34M	17.48M	54.29M	116.01M
	EBITDA
369.00M	269.70M	93.24M	124.81M	204.14M
	Net Income Common Stockholders
32.00M	-110.92M	-100.94M	-18.45M	69.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
92.00M	140.51M	253.78M	172.76M	95.68M
	Total Assets
2.79B	3.91B	4.27B	2.19B	2.18B
	Total Debt
777.00M	1.32B	1.48B	388.44M	451.64M
	Net Debt
685.00M	1.19B	1.23B	215.68M	355.96M
	Total Liabilities
1.74B	2.52B	2.73B	837.69M	782.88M
	Stockholders Equity
1.05B	1.39B	1.54B	1.35B	1.40B
Cash Flow		Free Cash Flow
306.00M	185.00M	-96.07M	167.81M	86.50M
	Operating Cash Flow
324.00M	273.31M	19.77M	225.16M	220.25M
	Investing Cash Flow
-59.00M	-158.89M	43.25M	-63.53M	-137.76M
	Financing Cash Flow
-263.00M	-200.49M	11.85M	-83.89M	-82.05M

Enerflex Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EFX, the sentiment is Negative. The current price of 9.06 is below the 20-day moving average (MA) of 10.42, below the 50-day MA of 11.36, and below the 200-day MA of 10.43, indicating a bearish trend. The MACD of -0.62 indicates Positive momentum. The RSI at 36.08 is Neutral, neither overbought nor oversold. The STOCH value of 9.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:EFX.

Enerflex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRX	82 Outperform	C$152.27M	2.88	34.27%	0.56%	19.21%	105.30%
SES	78 Outperform	C$2.89B	5.48	52.24%	3.19%	28.30%	227.26%
PSI	76 Outperform	C$865.79M	7.14	26.63%	4.64%	12.14%	26.17%
EFX	65 Neutral	C$1.12B	25.63	3.06%	1.38%	4.51%	―
Sector *	57 Neutral	$7.65B	4.47	-4.82%	6.50%	0.12%	-64.74%

Enerflex Corporate Events

Enerflex Announces Leadership Change and Reaffirms 2025 Outlook

Enerflex Ltd. announced a leadership transition with Marc Rossiter stepping down as President, CEO, and Director, and Preet Dhindsa named as Interim CEO. The company reaffirms its 2025 outlook and plans to expand direct shareholder returns, including a 50% increase in quarterly dividends and a new issuer bid. Enerflex continues to focus on enhancing profitability, leveraging its market position, and investing in growth opportunities, while maintaining a disciplined capital program.

Enerflex Announces Share Buyback Program to Boost Shareholder Value

Enerflex Ltd. has announced its intention to implement a Normal Course Issuer Bid (NCIB) to repurchase up to 5% of its public float over the next twelve months, subject to approval by the Toronto Stock Exchange. This move is part of Enerflex’s strategy to enhance shareholder returns, following a recent 50% increase in its quarterly dividend, and reflects the company’s belief that its current market share price does not fully represent its underlying value.

Enerflex Ltd. Reports Strong Q4 2024 Financial Results and Operational Growth

Enerflex Ltd. reported its financial results for Q4 2024, showcasing an adjusted EBITDA of $121 million and free cash flow of $76 million. The company reduced its net debt-to-EBITDA ratio to 1.5x and maintained strong operational visibility with a contract backlog of $1.5 billion in energy infrastructure and $1.3 billion in after-market services. Enerflex’s North American contract compression business performed well, driven by increased natural gas production, and the company plans to expand its fleet size by the end of 2025.