PHX Energy Services (PHX) AI Stock Analysis

• Market Cap: C$400.00M
• Dividend Yield: 9.1%
• Average Volume (3M): 57.91K
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.71
• Revenue Growth: 0.51%
• EPS Growth: -40.79%
• Country: CA
• Employees: 924
• Sector: Energy
• Sector Strength: 82
• Industry: Oil & Gas Drilling
• EPS (TTM): 1.17
• Shares Outstanding: 45,506,770
• 10 Day Avg. Volume: 32,100
• 30 Day Avg. Volume: 57,910
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.63
• Price to Cash Flow (P/CF): 5.80
• P/FCF Ratio: 94.20
• 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$11.00
• Price Target Upside: 25.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

PHX Energy Services demonstrates strong financial performance with consistent growth and a stable balance sheet. The technical analysis suggests neutral to slightly bullish conditions. The company's valuation is attractive due to a low P/E ratio and high dividend yield. Recent corporate events further support strategic growth and shareholder value, contributing positively to the overall score.

Positive Factors

Financial Ratings

The analyst reiterates an Outperform rating and target price of $12, reflecting confidence in the company's prospects.

Revenue Growth

U.S. Revenue of $132 million was up ~13% quarter over quarter, delivering the strongest Q4 in PHX's history.

Shareholder Returns

The company plans to return ~70% of excess free cash flow to shareholders, which represents one of the highest levels in the coverage group.

Negative Factors

Market Dependency

In Canada, revenue increased 7% year-over-year to $46 million, a Q4 high for the segment since 2014.

Valuation Concerns

Despite a strong dividend yield and solid market share, the company's inexpensive valuation may raise questions about its market position.

PHX Energy Services Business Overview & Revenue Model

Company Description

PHX Energy Services (PHX) is a Canadian-based energy services company that provides horizontal and directional drilling technology and services to oil and natural gas exploration and production companies. The company operates primarily in the oilfield services sector, offering innovative drilling solutions designed to enhance efficiency and performance in challenging drilling environments.

How the Company Makes Money

PHX Energy Services makes money by providing specialized drilling technology and services to oil and natural gas companies. Its revenue model primarily revolves around offering directional and horizontal drilling services that enable clients to efficiently extract hydrocarbons from complex reservoirs. The company generates income through service contracts with energy companies, where it deploys its advanced drilling equipment and expertise to optimize well placement and performance. Key revenue streams include fees charged for the use of its proprietary drilling technologies and related services. Strategic partnerships with major oil and gas producers and a focus on technological innovation are significant factors contributing to PHX's earnings, allowing it to maintain competitive service offerings in the oilfield services market.

PHX Energy Services Financial Statement Overview

Summary

PHX Energy Services demonstrates strong financial health with consistent revenue and profit growth. The balance sheet is stable, with manageable leverage and effective equity use. Cash flows are generally positive, though recent capital expenditures have impacted free cash flow. The company presents a positive financial trajectory, with some areas requiring monitoring to ensure continued stability and growth.

Income Statement

PHX Energy Services has shown consistent revenue growth over the years, with a notable increase in total revenue from 2020 to 2024. The gross profit margin has remained healthy, although it slightly decreased in 2024 compared to 2023. The net profit margin experienced a drop in 2024 due to reduced net income, but overall profitability remains strong. EBITDA margins are solid, indicating efficient operations, though EBIT margin in 2024 was affected by zero EBIT. Despite some fluctuations, the company exhibits robust revenue and profit growth trends.

Balance Sheet

The company's debt-to-equity ratio is moderate, suggesting manageable leverage levels. Return on equity (ROE) has been strong, reflecting effective use of shareholders' equity, though it decreased in 2024 due to lower net income. The equity ratio indicates a stable financial structure with a good proportion of equity in total assets. While the balance sheet is generally strong, a slight increase in total debt in 2024 warrants monitoring.

Cash Flow

PHX Energy Services has maintained positive operating cash flows, with free cash flow showing a significant drop in 2024 due to higher capital expenditures. The operating cash flow to net income ratio is robust, indicating good cash generation relative to earnings. However, the decline in free cash flow growth in 2024 suggests potential issues in sustaining cash reserves for future investments. Overall, cash flow management is effective but warrants attention to capital spending impacts.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
659.66M	656.34M	535.74M	349.92M	233.73M
	Gross Profit
124.49M	150.10M	109.64M	71.65M	32.04M
	EBIT
0.00	75.98M	37.53M	20.99M	3.24M
	EBITDA
121.10M	150.08M	72.88M	58.69M	26.97M
	Net Income Common Stockholders
54.62M	98.58M	44.31M	22.72M	-6.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.16M	16.43M	18.25M	24.83M	25.75M
	Total Assets
423.29M	385.49M	375.22M	262.49M	216.54M
	Total Debt
52.18M	44.77M	62.41M	35.87M	39.10M
	Net Debt
38.02M	28.34M	44.16M	11.04M	13.35M
	Total Liabilities
201.08M	175.53M	198.35M	128.06M	84.51M
	Stockholders Equity
222.21M	209.97M	176.88M	134.43M	132.03M
Cash Flow		Free Cash Flow
11.39M	31.11M	-37.70M	8.27M	42.23M
	Operating Cash Flow
96.90M	96.72M	37.08M	45.43M	67.91M
	Investing Cash Flow
-49.16M	-20.26M	-47.39M	-23.63M	-19.10M
	Financing Cash Flow
-51.11M	-77.95M	2.71M	-22.72M	-33.65M

PHX Energy Services Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.79
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PHX, the sentiment is Neutral. The current price of 8.79 is above the 20-day moving average (MA) of 8.71, below the 50-day MA of 8.84, and below the 200-day MA of 9.03, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 49.89 is Neutral, neither overbought nor oversold. The STOCH value of 18.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:PHX.

PHX Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCW	78 Outperform	$877.81M	8.51	21.89%	3.96%	0.84%	-1.74%
PHX	77 Outperform	C$400.00M	7.53	25.28%	9.10%	0.51%	-40.79%
TOT	74 Outperform	C$357.68M	6.04	11.04%	3.69%	2.65%	52.69%
CEU	70 Outperform	$1.66B	9.00	26.23%	1.81%	8.79%	31.76%
STEP	59 Neutral	C$314.20M	168.85	0.49%	―	0.98%	-96.29%
Sector *	58 Neutral	$9.12B	5.24	-7.59%	7.51%	0.53%	-65.25%
ESI	53 Neutral	C$430.88M	14.37	-1.55%	―	-6.00%	-150.20%

PHX Energy Services Corporate Events

PHX Energy Services Declares Quarterly Dividend

PHX Energy Services Corp. has announced a quarterly cash dividend of $0.20 per common share, payable on April 15, 2025, to shareholders of record as of March 31, 2025. This announcement reflects the company’s ongoing commitment to providing value to its shareholders and underscores its stable financial position within the oil and natural gas services industry.

PHX Energy Reports Record Revenue Amid Profitability Challenges

PHX Energy Services announced record-breaking revenue for the fourth quarter and the entire year, with consolidated revenue reaching $178.7 million. Despite the revenue growth, the company’s profitability declined due to increased equipment repair expenses and lower gains from the sale of drilling equipment. The US division contributed significantly to the revenue, while the Canadian division saw its highest fourth-quarter revenue since 2014.

PHX Energy Services Announces Leadership Transition and Executive Promotions

PHX Energy Services announced a leadership transition with founder and CEO John Hooks becoming the Executive Board Chair, while President Michael Buker will succeed him as CEO. This succession is part of a long-term plan to ensure continuity and focus on strategic growth, with Mr. Buker expected to continue driving operational success and shareholder rewards. Additionally, key executive promotions were made to support the company’s operational and technological development.