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ChampionX Corporation (CHX)
NASDAQ:CHX
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ChampionX
(NASDAQ:CHX)
75Outperform
ChampionX (CHX) vs. S&P 500 (SPY)
Market Cap
$5.69B
Dividend Yield1.27%
Average Volume (3M)4.29M
Price to Earnings (P/E)18.0
Beta (1Y)1.03
Revenue Growth-3.31%
EPS Growth4.82%
CountryUS
Employees7,100
SectorEnergy
Sector Strength84
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)1.65
Shares Outstanding190,800,000
10 Day Avg. Volume6,143,425
30 Day Avg. Volume4,285,948
Financial Highlights & Ratios
PEG Ratio3.74
Price to Book (P/B)N/A
Price to Sales (P/S)1.55
Price to Cash Flow (P/CF)6.80
P/FCF Ratio6.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$40.00Price Target Upside33.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
ChampionX Business Overview & Revenue Model
Company DescriptionChampionX Corporation provides chemistry solutions, and engineered equipment and technologies to oil and gas companies worldwide. The company's Production Chemical Technologies segment offers onshore and offshore chemical solutions, such as corrosion inhibitors, scale inhibitors, emulsion breakers, and biocides to oil and natural gas production and midstream markets to manage and control corrosion, oil and water separation, flow assurance, sour gas treatment, and water-related issues. The company's Production & Automation Technologies segment provides artificial lift equipment, end-to-end automation and digital solutions, and other production equipment, including electrical submersible pumping systems, gas lift systems, jet pumps, multiplex surface pumps, plunger lift equipment, progressive cavity pumping systems, downhole rod lift systems, emissions monitoring solutions, chemical injection systems, flow control valves, and gauges under the Harbison-Fischer, Norris, Alberta Oil Tool, Oil Lift Technology, PCS Ferguson, Pro-Rod, Upco, Unbridled ESP, Norriseal-Wellmark, Quartzdyne, Spirit, Theta, Timberline, and Windrock brands. The company's Drilling Technologies segment offers polycrystalline diamond cutter inserts, bearings, valves, and mining tools under the US Synthetic brand for use in oil and gas drill bits, renewable energy applications, mixers, and agitators; and high-density ceramic roof bolt mining tools for underground mining operations. The company's Reservoir Chemical Technologies segment provides chemistry-oriented solutions and technologies for well drilling, cementing, fracturing, acidizing, and other well interventions, as well as fracturing fluid packages, drilling and cement additives, and products for acidizing activities. ChampionX Corporation is headquartered in The Woodlands, Texas.
How the Company Makes MoneyChampionX makes money through a diversified revenue model that includes the sale of chemical solutions and technology-driven equipment and services to the energy sector. Its key revenue streams are derived from production and automation technologies, which provide advanced equipment and software to improve oilfield operations, and its chemical solutions, which include specialty chemicals used in oil and gas extraction and processing. The company also benefits from significant partnerships with major oil and gas companies, which contribute to its earnings by ensuring a steady demand for its products and services. Additionally, ChampionX leverages its global presence and industry expertise to maintain a competitive edge, further driving its revenue growth.
ChampionX Financial Statement Overview
Summary
ChampionX exhibits strong financial performance with consistent revenue growth and improvements in profitability. The company effectively manages its leverage and has robust cash flow generation, though there is room for improvement in net profit margins and strengthening the equity ratio.Income Statement
ChampionX has demonstrated solid revenue growth, with total revenue increasing from 2019 to 2024. Gross profit margin has remained stable, showing effective cost management. However, the net profit margin has room for improvement despite a positive trajectory since 2020. The EBITDA margin reflects strong operational efficiency.78
Positive
Balance Sheet
The company's debt-to-equity ratio has improved over the years, indicating better leverage management. Return on equity is healthy, but the equity ratio suggests potential room for strengthening the financial structure. Overall, the balance sheet shows good financial stability with manageable debt levels.72
Positive
Cash Flow
ChampionX has shown impressive free cash flow growth, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is robust, highlighting efficient cash conversion. The company has consistently maintained positive free cash flow, supporting its financial flexibility.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.63B | 3.76B | 3.81B | 3.07B | 1.90B | Gross Profit |
| 1.19B | 1.14B | 898.66M | 743.27M | 409.17M | EBIT |
| 468.07M | 506.61M | 300.12M | 204.61M | -53.77M | EBITDA |
| 744.57M | 719.36M | 616.36M | 441.89M | -496.66M | Net Income Common Stockholders |
| 320.27M | 314.24M | 154.97M | 113.30M | -742.35M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 507.68M | 288.56M | 250.19M | 251.68M | 201.42M | Total Assets |
| 3.47B | 3.24B | 3.39B | 3.53B | 3.48B | Total Debt |
| 695.79M | 665.75M | 627.95M | 724.51M | 932.61M | Net Debt |
| 188.11M | 377.20M | 377.76M | 472.83M | 731.19M | Total Liabilities |
| 1.64B | 1.58B | 1.71B | 1.78B | 1.86B | Stockholders Equity |
| 1.85B | 1.68B | 1.69B | 1.77B | 1.63B |
| Cash Flow | Free Cash Flow | |||
| 448.37M | 397.95M | 310.55M | 243.75M | 264.88M | Operating Cash Flow |
| 589.68M | 540.27M | 413.36M | 328.22M | 310.04M | Investing Cash Flow |
| -215.34M | -127.78M | -87.99M | -37.41M | 22.13M | Financing Cash Flow |
| -150.46M | -373.17M | -324.81M | -234.35M | -175.37M |
ChampionX Technical Analysis
Positive
30.02
Price Trends
29.43
Positive
29.22
Positive
30.18
Negative
Market Momentum
0.25
Negative
55.84
Neutral
39.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHX, the sentiment is Positive. The current price of 30.02 is above the 20-day moving average (MA) of 29.46, above the 50-day MA of 29.43, and below the 200-day MA of 30.18, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 55.84 is Neutral, neither overbought nor oversold. The STOCH value of 39.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CHX.
ChampionX Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $43.52B | 14.77 | 18.47% | 1.96% | 9.10% | 55.56% | |
79 Outperform | $13.11B | 16.29 | 27.06% | 0.63% | 16.23% | 1403.29% | |
78 Outperform | $5.80B | 9.49 | 10.12% | 1.81% | 3.42% | -35.98% | |
77 Outperform | $56.95B | 13.48 | 21.59% | 2.65% | 9.58% | 6.53% | |
75 Outperform | $5.69B | 18.02 | 18.18% | 1.27% | -3.31% | 4.82% | |
75 Outperform | $22.02B | 8.96 | 25.14% | 2.68% | -0.32% | -3.41% | |
58 Neutral | $9.14B | 5.25 | -7.99% | 7.51% | 0.53% | -65.25% |
* Energy Sector Average
Performance Comparison
CHX
ChampionX
30.02
-8.60
-22.27%
BKR
Baker Hughes Company
44.80
11.98
36.50%
FTI
TechnipFMC
32.17
6.00
22.93%
HAL
Halliburton
25.55
-13.45
-34.49%
NOV
NOV
15.41
-4.23
-21.54%
SLB
Schlumberger
42.20
-11.07
-20.78%
ChampionX Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 2.46% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The call presented a strong financial performance for ChampionX with significant growth in adjusted EBITDA, excellent free cash flow generation, and robust shareholder returns. However, the company faced challenges with flat revenue growth, declines in specific segments, and market uncertainties in North America. Despite these obstacles, the company remains optimistic about 2024, driven by international growth and opportunities in emissions technology.Highlights
Strong Adjusted EBITDA Growth
ChampionX delivered a 25% year-over-year growth in adjusted EBITDA, reaching over 20% margin, which expanded by 430 basis points. This was driven by higher volumes, productivity, cost management, and higher selling prices.
Record Cash Flow and Shareholder Returns
Generated over $400 million of free cash flow and returned $343 million to shareholders, up 52% from 2022. The company increased its share repurchase program to $1.5 billion and raised the regular cash dividend by 12%.
International Growth and Diversification
International growth was strong in the fourth quarter at 6% sequentially, led by 15% growth in Middle East and Africa region. Production Chemical Technologies business grew 16% in 2023 in the U.S., and Production & Automation Technologies grew 16% internationally.
Positive Outlook for 2024
Expecting a growth year for ChampionX in 2024, both internationally and in North America, driven by production-oriented businesses. The EPA's methane standards are expected to drive accelerated growth in emissions business.
Lowlights
Flat Revenue and Decline in Certain Segments
Fourth quarter revenue was flat sequentially and down 4% year-over-year. Production Automation Technologies revenue decreased by 6% sequentially, and Drilling Technologies revenue fell by 15% sequentially.
Challenges in North American Short-Cycle Business
Short-cycle North American business, particularly Drilling Technologies, faced challenges with a sequential revenue decline of more than expected due to U.S. land activity slowdown and customer destocking.
Seasonal and Market Uncertainties
Facing near-term market uncertainty with respect to the timing and trajectory of U.S. land drilling and completions activity, impacting the first quarter outlook with expected lower international revenue due to seasonality.
Company Guidance
In the fourth quarter of 2023, ChampionX Corporation reported a strong financial performance with an adjusted EBITDA margin of 21%, flat sequentially, and a 25% year-over-year growth in adjusted EBITDA. The company achieved a 430 basis point expansion in adjusted EBITDA margin and generated over $400 million in free cash flow, with a return on invested capital reaching 18%, up 400 basis points from the prior year. Revenue was reported at $944 million, showing a 6% increase internationally, led by 15% growth in the Middle East and Africa and 7% in Latin America. North American revenue remained flat, with Production Chemical Technologies growing 16% in the U.S. for the full year. ChampionX returned 83% of free cash flow to shareholders, amounting to $343 million, and announced an increase in its share repurchase program to $1.5 billion. For 2024, the company expects continued revenue and earnings growth, with an emphasis on productivity projects and capital returns to shareholders.ChampionX Corporate Events
M&A TransactionsBusiness Operations and Strategy
ChampionX to Sell US Synthetic for $300 Million
Neutral
Feb 25, 2025
On February 24, 2025, ChampionX announced a definitive agreement to sell its subsidiary, US Synthetic Corporation, to LongRange Capital for approximately $300 million. This divestiture is part of a larger acquisition strategy involving ChampionX and Schlumberger Limited, with the transaction expected to close following the completion of the merger between ChampionX and SLB. The sale of US Synthetic, which specializes in polycrystalline diamond cutter inserts and other drilling technologies, is anticipated to foster further growth under LongRange Capital’s ownership, while ChampionX continues to focus on its core oilfield technology offerings.
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.