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Ensign Engy Services (TSE:ESI)
TSX:ESI
RESEARCH TOOLSreports
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Ensign Energy Services
(TSX:ESI)
73Outperform
Positive Factors
Debt Reduction
The company reduced debt by approximately $220 million in 2024, surpassing its target, and remains on track for another $200 million reduction.
Fleet Utilization
Ensign highlighted continued strength in Canada, with the company's high-spec singles and triples largely booked through 2025 and about 75% of its high-spec single fleet already contracted into Q2/26.
Negative Factors
Stock Price Target
The target price was lowered to $3.50, reflecting some near-term macro uncertainty.
Ensign Energy Services (ESI) vs. S&P 500 (SPY)
Market Cap
C$387.86M
Dividend YieldN/A
Average Volume (3M)304.00K
Price to Earnings (P/E)14.4
Beta (1Y)1.20
Revenue Growth-7.71%
EPS Growth48.35%
CountryCA
Employees3,862
SectorEnergy
Sector Strength64
IndustryFossil Fuels
Share Statistics
EPS (TTM)-0.11
Shares Outstanding184,695,080
10 Day Avg. Volume388,733
30 Day Avg. Volume304,001
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)N/A
Price to Sales (P/S)0.24
Price to Cash Flow (P/CF)1.00
P/FCF Ratio1.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$3.25Price Target Upside54.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Ensign Energy Services Business Overview & Revenue Model
Company DescriptionEnsign Energy Services (ESI) is a leading global provider of oilfield services, specializing in drilling, well servicing, and production services. Operating in key energy-producing regions around the world, Ensign offers a comprehensive suite of services designed to optimize the exploration, development, and production of oil and gas resources. The company is committed to delivering innovative and efficient solutions, leveraging advanced technology and a skilled workforce to meet the diverse needs of its clients in the energy sector.
How the Company Makes MoneyEnsign Energy Services generates revenue primarily through its diverse range of oilfield services, including drilling, well servicing, and production services. The company's revenue model is centered around long-term contracts with oil and gas exploration and production companies, providing specialized equipment and skilled personnel to support their operations. Key revenue streams include fees for drilling rigs, which vary based on rig type, location, and contract length, as well as additional services such as directional drilling, equipment rentals, and maintenance. Ensign's strategic partnerships with major energy companies and its presence in multiple geographic markets also play a significant role in its earnings, allowing it to leverage global opportunities and mitigate regional market fluctuations.
Ensign Energy Services Financial Statement Overview
Summary
Ensign Energy Services shows a positive trajectory in its financials with improving profitability and efficient cash flow management. Revenue growth is strong, and operational efficiencies are evident, but challenges remain in cost management and leverage.Income Statement
Ensign Energy Services shows a positive trajectory in its income statement with a notable recovery in profitability. The net profit margin for TTM stands at 1.86%, a positive shift from previous negative margins. Revenue growth over the past year is strong at 7.04%, indicating recovery and growth potential. The EBIT and EBITDA margins for TTM are 7.36% and 28.25%, respectively, showing operational efficiency improvements. However, the gross profit margin has decreased to 10.99% from the previous year, suggesting potential cost management issues.75
Positive
Balance Sheet
The balance sheet of Ensign Energy Services is stable, with a debt-to-equity ratio of 0.84, indicating moderate leverage. The equity ratio stands at 46.08%, reflecting a healthy proportion of equity financing. Return on equity (ROE) is a modest 2.37% for TTM, showing room for improvement in generating returns for shareholders. The company maintains a substantial asset base, but high total debt remains a concern, affecting financial flexibility.65
Positive
Cash Flow
Ensign Energy Services demonstrates strong cash flow management. The operating cash flow to net income ratio is significantly positive at 9.94 for TTM, indicating robust cash generation relative to net income. The free cash flow to net income ratio is 4.46, showing efficient conversion of profits into cash. Despite a decrease in free cash flow by 24.04% compared to the previous year, the company maintains positive free cash flow, which supports ongoing operations and debt servicing.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.69B | 1.79B | 1.58B | 995.59M | 936.82M | 1.59B | Gross Profit |
| 185.51M | 240.87M | 141.11M | -36.79M | -96.09M | 88.16M | EBIT |
| 124.19M | 180.55M | 63.97M | -84.78M | 12.08M | -6.19M | EBITDA |
| 476.96M | 481.91M | 402.84M | 202.14M | 374.79M | 374.30M | Net Income Common Stockholders |
| 31.43M | 41.24M | 8.13M | -156.01M | -66.74M | -163.45M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 84.82M | 20.50M | 49.88M | 13.30M | 44.20M | 28.41M | Total Assets |
| 3.89B | 2.95B | 3.18B | 2.98B | 3.05B | 3.47B | Total Debt |
| 1.73B | 1.23B | 1.46B | 1.46B | 1.40B | 1.60B | Net Debt |
| 1.64B | 1.21B | 1.41B | 1.45B | 1.35B | 1.57B | Total Liabilities |
| 2.10B | 1.64B | 1.90B | 1.78B | 1.69B | 2.01B | Stockholders Equity |
| 1.72B | 1.31B | 1.29B | 1.19B | 1.37B | 1.46B |
| Cash Flow | Free Cash Flow | ||||
| 140.17M | 184.46M | 145.57M | 113.39M | 196.73M | 133.56M | Operating Cash Flow |
| 312.30M | 360.30M | 319.96M | 178.64M | 246.97M | 269.57M | Investing Cash Flow |
| -119.12M | -152.63M | -121.46M | -174.59M | -50.24M | -142.08M | Financing Cash Flow |
| -212.22M | -366.28M | -162.04M | -35.03M | -180.71M | -182.89M |
Ensign Energy Services Technical Analysis
Negative
2.10
Price Trends
3.02
Negative
2.96
Negative
2.70
Negative
Market Momentum
-0.22
Positive
26.54
Positive
10.91
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ESI, the sentiment is Negative. The current price of 2.1 is below the 20-day moving average (MA) of 2.76, below the 50-day MA of 3.02, and below the 200-day MA of 2.70, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 26.54 is Positive, neither overbought nor oversold. The STOCH value of 10.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ESI.
Ensign Energy Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.56B | 8.52 | 26.23% | 1.81% | 5.94% | 46.19% | |
75 Outperform | $832.61M | 8.25 | 21.89% | 4.16% | 0.84% | -1.74% | |
73 Outperform | C$387.86M | 14.37 | -1.55% | ― | -7.71% | 48.35% | |
68 Neutral | $892.71M | 8.13 | 6.90% | ― | -0.02% | 60.38% | |
67 Neutral | C$296.29M | 7.17 | 10.71% | ― | 0.05% | -43.08% | |
57 Neutral | $8.40B | 5.59 | -5.99% | 7.42% | -0.03% | -68.66% | |
48 Neutral | C$76.49M | ― | -2.44% | ― | -4.44% | 0.75% |
* Energy Sector Average
Performance Comparison
TSE:ESI
Ensign Energy Services
2.22
-0.29
-11.55%
TSE:CEU
CES Energy Solutions
6.87
2.22
47.87%
TSE:PD
Precision Drilling
63.46
-19.27
-23.29%
TSE:TCW
Trican Well Service
4.40
0.42
10.61%
TSE:WRG
Western Energy Services
2.23
-0.51
-18.61%
TSE:STEP
STEP Energy Services
4.07
0.32
8.53%
Ensign Energy Services Earnings Call Summary
Earnings Call Date: Mar 7, 2025 | % Change Since: -14.29% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
Ensign Energy Services reported achievements in debt reduction, market share growth in Canada, and strong safety records. However, they faced challenges with decreased revenue and EBITDA, reduced U.S. operations, and competitive pricing in Australia. The positive aspects were largely offset by the negative trends.Highlights
Debt Reduction Success
Ensign Energy Services reduced debt by $220 million in 2024, exceeding their target of $200 million. Since 2019, they have reduced net debt by $664.6 million.
Market Share Growth in Canada
The company grew its Canadian market share with an 18% year-over-year increase, expanding their client base to three new clients.
100% Utilization in Middle East and Latin America
Ensign achieved full utilization of their rigs in the Middle East and Latin American business units, maintaining strong operational performance.
Safety Performance Milestone
Ensign ended the year with the second-best safety performance in the company's history, with three divisions operating without incidents.
EDGE AutoPilot Technology Expansion
The company expanded its EDGE AutoPilot drilling rig control system by 25% year-over-year, enhancing operational efficiency and profitability.
Lowlights
Decreased Revenue and EBITDA
Total revenue for 2024 decreased by 6% to $1.68 billion, and adjusted EBITDA dropped by 8% to $450.1 million, primarily due to reduced U.S. activity.
Decline in U.S. Operations
U.S. operations saw a 23% decrease in total operating days for 2024, affected by customer consolidation and depressed natural gas prices.
Challenges in Australia
The company faced reduced activity in Australia due to competitors dropping pricing on shallow and mid-sized rigs, affecting rig utilization.
Company Guidance
In the fourth quarter of 2024, Ensign Energy Services provided a comprehensive financial and operational update, highlighting robust performance and strategic achievements. The company successfully reduced its debt by $220 million, surpassing its target of $200 million, and generated $450 million in adjusted EBITDA. Despite a 1% revenue decrease to $426.5 million compared to the previous year, Ensign maintained strong operational metrics, including 100% utilization in the Middle East and Latin America. The company operated approximately 100 rigs daily, upgraded 20 rigs, and expanded drilling solution penetration by 25% year-over-year. Ensign also identified growth opportunities worth $19 million and achieved its second-best safety performance in company history, with three divisions operating incident-free throughout the year. Looking ahead, Ensign aims to reduce its debt further, targeting an additional $200 million reduction in 2025.Ensign Energy Services Corporate Events
Ensign Energy Secures $25 Million in Debenture Offering
Jan 2, 2025
Ensign Energy Services has successfully closed a $25 million private placement of unsecured, subordinated convertible debentures, offering investors a promising 7.50% annual interest rate. The proceeds from this offering will be utilized for general corporate purposes, while major stakeholders, including significant shareholders, actively participated in the transaction.
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.