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Trican Well Service (TSE:TCW)
TSX:TCW
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Trican Well Service
(TSX:TCW)
75Outperform
Positive Factors
Customer Base
TCW maintains one of the best customer lists in Canada, which should allow for stability in results next year.
Dividends
The company raised its quarterly dividend by 11%, reflecting an annualized yield of more than 4%.
Share Repurchase
The company has repurchased 3.9 million shares, equating to about 20% of the current buyback program.
Negative Factors
Growth Expectations
There is not much expected in terms of growth from the company into 2025.
Rating Downgrade
The rating for TCW shares has been downgraded to Market Perform from Outperform.
Valuation
The lack of growth into 2025 combined with TCW's relatively expensive valuation causes a more neutral approach to the shares.
Trican Well Service (TCW) vs. S&P 500 (SPY)
Market Cap
$761.02M
Dividend Yield4.92%
Average Volume (3M)607.97K
Price to Earnings (P/E)7.4
Beta (1Y)0.56
Revenue Growth0.84%
EPS Growth-1.74%
CountryCA
Employees1,200
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.55
Shares Outstanding188,372,210
10 Day Avg. Volume506,404
30 Day Avg. Volume607,972
Financial Highlights & Ratios
PEG Ratio8.87
Price to Book (P/B)N/A
Price to Sales (P/S)0.89
Price to Cash Flow (P/CF)2.70
P/FCF Ratio3.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$5.36Price Target Upside39.56% Upside
Rating ConsensusHold
Number of Analyst Covering4
Trican Well Service Business Overview & Revenue Model
Company DescriptionTrican Well Service Ltd. is a leading provider of oilfield services catering primarily to the upstream oil and gas sector. With its headquarters in Calgary, Alberta, Trican offers a comprehensive suite of services, including hydraulic fracturing, cementing, and coiled tubing operations, among others. These services are essential for the exploration and development of oil and natural gas wells, helping energy companies optimize their production capabilities.
How the Company Makes MoneyTrican Well Service generates revenue by providing specialized oilfield services to energy companies engaged in the exploration and production of oil and natural gas. The company's key revenue streams include hydraulic fracturing, which enhances the extraction of hydrocarbons from reservoirs, cementing services that ensure well integrity, and coiled tubing operations for well intervention and maintenance. Trican's earnings are influenced by factors such as oil and gas commodity prices, which drive demand for exploration and production activities, as well as their strategic partnerships with major oil and gas companies. Additionally, the company's focus on technological innovation and operational efficiency helps it maintain a competitive edge and secure long-term contracts with clients.
Trican Well Service Financial Statement Overview
Summary
Trican Well Service is financially sound with strong profitability, as evidenced by a robust EBITDA margin of 22.99% and a healthy return on equity of 22.42%. However, the slight dip in net profit margin and free cash flow requires attention.Income Statement
Trican Well Service exhibited a solid financial performance with a gross profit margin of 19.38% and an EBIT margin of 15.14% for 2024. The company demonstrated a steady revenue growth from 2023 to 2024, although the net profit margin slightly declined to 11.16%, suggesting some cost pressures. Despite these challenges, the EBITDA margin remained robust at 22.99%, indicating strong operational efficiency.78
Positive
Balance Sheet
The balance sheet is strong with a low debt-to-equity ratio of 0.04, reflecting prudent financial leverage. The equity ratio stands at 71.50%, showcasing a solid equity base. Return on equity is healthy at 22.42%, indicating effective use of shareholders' equity to generate profits.81
Very Positive
Cash Flow
Cash flow analysis highlights a decrease in free cash flow from 2023 to 2024, with free cash flow to net income ratio at 0.73. This suggests efficient conversion of income into cash flow despite the decline. The operating cash flow to net income ratio is robust at 1.41, indicating strong cash generation capabilities.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 980.84M | 972.68M | 866.29M | 562.48M | 397.02M | Gross Profit |
| 190.00M | 201.15M | 150.34M | 43.29M | -40.57M | EBIT |
| 148.51M | 161.62M | 110.18M | 14.22M | -70.77M | EBITDA |
| 225.54M | 238.76M | 190.68M | 101.76M | -144.44M | Net Income Common Stockholders |
| 109.48M | 121.01M | 79.22M | 12.06M | -233.32M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 26.28M | 88.75M | 58.11M | 29.51M | 22.61M | Total Assets |
| 683.07M | 710.44M | 671.12M | 577.84M | 563.21M | Total Debt |
| 20.01M | 18.14M | 42.39M | 10.32M | 13.77M | Net Debt |
| -6.27M | -70.61M | -15.72M | -19.19M | -8.84M | Total Liabilities |
| 194.68M | 193.38M | 166.45M | 88.44M | 70.94M | Stockholders Equity |
| 488.39M | 517.07M | 504.67M | 489.40M | 492.27M |
| Cash Flow | Free Cash Flow | |||
| 79.78M | 169.17M | 48.61M | 20.21M | 57.98M | Operating Cash Flow |
| 154.84M | 248.46M | 152.23M | 74.10M | 70.77M | Investing Cash Flow |
| -75.92M | -75.09M | -85.80M | -39.35M | 13.26M | Financing Cash Flow |
| -141.39M | -142.73M | -37.83M | -27.84M | -68.67M |
Trican Well Service Technical Analysis
Negative
3.84
Price Trends
4.53
Negative
4.72
Negative
4.69
Negative
Market Momentum
0.04
Negative
62.13
Neutral
64.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TCW, the sentiment is Negative. The current price of 3.84 is below the 20-day moving average (MA) of 4.50, below the 50-day MA of 4.53, and below the 200-day MA of 4.69, indicating a bearish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 62.13 is Neutral, neither overbought nor oversold. The STOCH value of 64.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TCW.
Trican Well Service Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $761.02M | 7.37 | 21.89% | 4.92% | 0.84% | -1.74% | |
70 Outperform | $1.37B | 7.39 | 26.23% | 2.37% | 8.79% | 31.76% | |
67 Neutral | $783.22M | 6.93 | 6.90% | ― | -1.83% | -62.53% | |
59 Neutral | C$278.89M | 135.00 | 0.49% | ― | 0.98% | -96.29% | |
57 Neutral | $7.68B | 4.29 | -3.52% | 6.80% | -0.14% | -64.60% | |
53 Neutral | C$357.22M | 14.37 | -1.55% | ― | -6.00% | -150.20% | |
48 Neutral | C$71.07M | ― | -2.44% | ― | -4.44% | 0.75% |
* Energy Sector Average
Performance Comparison
TSE:TCW
Trican Well Service
4.28
-0.08
-1.86%
TSE:CEU
CES Energy Solutions
6.40
0.84
15.03%
TSE:PD
Precision Drilling
62.36
-37.74
-37.70%
TSE:ESI
Ensign Energy Services
2.06
-0.53
-20.46%
TSE:WRG
Western Energy Services
2.10
-0.66
-23.91%
TSE:STEP
STEP Energy Services
3.86
-0.26
-6.31%
Trican Well Service Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -17.01% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with strong financial performance and strategic initiatives like dividend increases and technology modernization. However, concerns over potential U.S. tariffs and pricing pressures were notable challenges.Highlights
Strong Financial Position
Trican exited the quarter with positive working capital of approximately $128 million and cash of about $26 million. They generated positive earnings of $27.6 million, translating to $0.14 per share.
Increase in Dividend
The Board of Directors approved a dividend of $0.05 per share for this quarter, reflecting an increase of 11% from the previous quarterly dividend.
Fracturing Division Performance
Q4 revenue was up about 17% year-over-year and EBITDA was up about 13% in the fracturing division.
Technology Modernization Initiative
Trican is undertaking a significant technology modernization initiative with a 2025 investment of approximately $10 million, aimed at enhancing operational efficiency and incorporating artificial intelligence.
Coiled Tubing Revenue Growth
Coiled tubing revenue was up 12% year-over-year and EBITDA was up almost 80%, with high utilization rates in Q1.
Lowlights
Adjusted EBITDA Decline
Adjusted EBITDA for the quarter was $55.6 million or 20% of revenues, down from $56.4 million or 22% of revenues in Q4 of last year.
Potential Impact of U.S. Tariffs
Concerns over potential 10% U.S. tariffs on Canadian oil and gas imports, and possible retaliatory tariffs from Canada, could impact costs, particularly for sand imported from the U.S.
Pricing Pressure in Q4
Experienced pricing pressure in Q4 due to some competitors not being as busy, leading to some margin compression.
Company Guidance
During the Trican Well Service's Fourth Quarter 2024 earnings call, CFO Scott Matson reported revenues of $275.5 million and an adjusted EBITDA of $55.6 million, representing 20% of revenues. This was slightly down from the previous year's Q4 EBITDA of $56.4 million or 22% of revenues. The company generated positive earnings of $27.6 million or $0.14 per share, with free cash flow amounting to $33.9 million. Capital expenditures for the quarter totaled $18.7 million, with $14.2 million allocated to maintenance capital and $4.5 million to upgrade capital, focusing on electrification and equipment upgrades. For 2025, Trican has planned a $70 million capital budget targeting maintenance, growth initiatives, and technology enhancements, including a $10 million investment in a new ERP platform and AI capabilities. Additionally, the company repurchased and canceled 3.1 million shares in Q4 under the NCIB program and announced an 11% increase in quarterly dividends, maintaining an annual payout of approximately $36 million.Trican Well Service Corporate Events
Business Operations and StrategyFinancial Disclosures
Trican Well Service to Release Q1 2025 Results and Host Conference Call
Neutral
Mar 31, 2025
Trican Well Service Ltd. announced that it will release its First Quarter 2025 financial results on May 12, 2025, after the market closes. The company will hold a conference call on May 13, 2025, to discuss these results, providing stakeholders with insights into its financial performance and operational strategies.
DividendsFinancial Disclosures
Trican Well Service Reports 2024 Results and Boosts Dividend
Neutral
Feb 20, 2025
Trican Well Service Ltd. reported its annual results for 2024, highlighting a marginal revenue increase to $980.8 million despite low natural gas prices, and a decrease in profit to $109.5 million. The company announced an 11% increase in its quarterly dividend, indicating strong financial health with a positive balance sheet, despite a reduction in cash reserves due to tax liabilities and capital expenditures.
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.