Advantage Energy (AAV) AI Stock Analysis

• Market Cap: $1.54B
• Dividend Yield: N/A
• Average Volume (3M): 562.93K
• Price to Earnings (P/E): 71.4
• Beta (1Y): 0.97
• Revenue Growth: -2.31%
• EPS Growth: -78.23%
• Country: CA
• Employees: 61
• Sector: Energy
• Sector Strength: 72
• Industry: Fossil Fuels
• EPS (TTM): 0.13
• Shares Outstanding: 166,700,000
• 10 Day Avg. Volume: 944,442
• 30 Day Avg. Volume: 562,929
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.82
• Price to Cash Flow (P/CF): 6.90
• P/FCF Ratio: 0.00
• 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$12.62
• Price Target Upside: 32.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Advantage Energy demonstrates a mixed outlook with significant strengths in production growth and cost management. However, these are tempered by financial challenges including declining profitability and high valuation. Technical analysis suggests weak momentum, and while strategic initiatives are promising, risks from volatile gas prices persist.

Positive Factors

Cost Efficiency

Advantage Energy Ltd. has reduced operating costs at the Charlie Lake asset by 25%, enhancing cost efficiency.

Operational Efficiency

The company's Charlie Lake wells yielded significantly higher results compared to previous operations, showcasing improved operational efficiency.

Negative Factors

Investor Concerns

Higher leverage post-acquisition has frustrated investors due to the deferral of the buyback program.

Advantage Energy Business Overview & Revenue Model

Company Description

Advantage Energy Ltd. (AAV) is a Canadian energy company engaged primarily in the exploration, development, and production of oil and natural gas reserves. Operating within the energy sector, the company focuses on leveraging its assets to produce sustainable and efficient energy solutions. Advantage Energy's core activities include the development of unconventional resource plays, with a significant emphasis on the Montney natural gas formation in Alberta, Canada.

How the Company Makes Money

Advantage Energy generates revenue through the extraction and sale of oil and natural gas. The company monetizes its natural gas and oil production by selling to domestic and international markets. Key revenue streams include the sale of natural gas, natural gas liquids (NGLs), and crude oil. The company benefits from its strategic location in the Montney region, which is known for its prolific natural gas production, allowing it to achieve competitive extraction costs. Additionally, Advantage Energy may engage in hedging activities to manage commodity price fluctuations, further contributing to its financial stability. Significant partnerships with midstream companies facilitate the transportation and marketing of its products, ensuring efficient access to markets and optimizing revenue.

Advantage Energy Financial Statement Overview

Summary

Advantage Energy's financial health is mixed, with positive revenue growth and strong gross margins overshadowed by declining net profitability and negative free cash flow. The balance sheet remains solid with a reasonable debt-to-equity ratio, but the decrease in return on equity is concerning. The company faces challenges in converting profits into cash, which could affect its ability to fund operations and growth without additional financing.

Income Statement

Advantage Energy shows a mixed financial performance. The gross profit margin remained strong at around 54.2% in 2024. However, net profit margin has drastically reduced from 19.9% in 2023 to 3.9% in 2024, indicating significant bottom-line pressure. Revenue grew by 8% from 2023 to 2024, reflecting positive growth, but this is overshadowed by the decrease in profitability. The absence of EBIT in 2024 is concerning, though EBITDA margin remains robust at 51.2%.

Balance Sheet

The balance sheet reflects a solid equity base with stockholders' equity accounting for approximately 55.5% of total assets in 2024, indicating financial stability. The debt-to-equity ratio increased to 0.43 in 2024, showing a rise in leverage but still at manageable levels. Return on equity has significantly dropped to 1.3% from 6.5%, highlighting concerns over profitability relative to equity.

Cash Flow

Cash flow metrics reveal challenges, particularly with free cash flow turning negative in 2024. The free cash flow to net income ratio is negative, indicating a reliance on external financing. Operating cash flow to net income ratio remains positive at 10.0, suggesting that core operations still generate cash, but the sustainability of this is in question given the negative free cash flow growth.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
794.02M	550.10M	509.42M	964.37M	492.04M	245.09M
	Gross Profit
601.49M	298.14M	330.99M	719.44M	357.72M	123.72M
	EBIT
438.95M	0.00	299.81M	536.68M	217.45M	9.94M
	EBITDA
899.39M	281.87M	316.34M	597.24M	660.25M	-237.45M
	Net Income Common Stockholders
587.14M	21.72M	101.60M	338.67M	411.52M	-284.05M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
48.94M	20.15M	19.26M	48.94M	25.24M	3.28M
	Total Assets
2.22B	2.95B	2.30B	2.22B	1.99B	1.53B
	Total Debt
192.90M	698.03M	353.98M	192.90M	167.34M	249.38M
	Net Debt
143.96M	677.89M	334.72M	143.96M	142.11M	246.10M
	Total Liabilities
652.28M	1.31B	742.63M	652.28M	534.87M	493.55M
	Stockholders Equity
1.56B	1.64B	1.56B	1.56B	1.46B	1.04B
Cash Flow		Free Cash Flow
141.43M	-85.53M	49.73M	260.59M	85.31M	-57.91M
	Operating Cash Flow
381.05M	217.53M	323.35M	502.38M	223.15M	100.71M
	Investing Cash Flow
-239.58M	-697.73M	-282.76M	-269.58M	-117.78M	-158.62M
	Financing Cash Flow
-142.71M	481.08M	-70.26M	-209.09M	-83.41M	48.09M

Advantage Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.51
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AAV, the sentiment is Positive. The current price of 9.51 is below the 20-day moving average (MA) of 9.58, below the 50-day MA of 9.70, and below the 200-day MA of 9.59, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 50.04 is Neutral, neither overbought nor oversold. The STOCH value of 31.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AAV.

Advantage Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEY	73 Outperform	C$3.11B	10.23	11.55%	8.44%	-14.63%	-18.40%
MEG	72 Outperform	C$5.87B	12.09	11.22%	0.92%	-8.92%	-5.46%
BIR	71 Outperform	$1.38B	24.32	0.70%	8.30%	-8.89%	-82.18%
TOU	70 Outperform	C$24.32B	18.22	8.55%	2.04%	-8.29%	-30.52%
ARX	70 Outperform	$15.13B	13.57	14.67%	2.87%	-9.83%	-27.76%
AAV	60 Neutral	$1.54B	71.40	1.37%	―	-2.31%	-78.23%
Sector *	57 Neutral	$8.36B	5.47	-5.51%	7.41%	0.15%	-68.69%

Advantage Energy Corporate Events

Advantage Energy Reports Record 2024 Results and Strategic Growth

Advantage Energy Ltd. announced record-breaking financial and operational results for the year 2024, highlighted by a 17% increase in production and a 39% rise in liquids output. The company’s strategic acquisition of Charlie Lake assets played a crucial role in enhancing per-share profitability by 34% in the latter half of the year. Despite challenges such as low natural gas prices, Advantage managed to reduce development capital spending and maintain steady dry gas production, positioning itself strongly for future growth.

Advantage Energy Forms Special Committee to Explore Strategic Opportunities

Advantage Energy Ltd. has established a special committee of independent directors to explore strategic opportunities that align with the interests of the company and its shareholders. This move comes as the energy industry faces challenges, but Advantage aims to leverage potential opportunities that may arise in 2025 as political uncertainties decrease and market conditions improve.

Advantage Energy Announces Board Chair Retirement and Successor

Advantage Energy Ltd. has announced the retirement of its Board Chair, Mr. Stephen Balog, as part of its ongoing board renewal process. Mr. John Festival, who has extensive experience in the Canadian energy industry, will succeed him. This change in leadership is expected to bring new insights and strategies to the company, potentially impacting its operations and positioning within the industry.