Advantage Energy (AAV) AI Stock Analysis

• Market Cap: $1.73B
• Dividend Yield: N/A
• Average Volume (3M): 487.14K
• Price to Earnings (P/E): 78.0
• Beta (1Y): 1.25
• Revenue Growth: -2.31%
• EPS Growth: -78.23%
• Country: CA
• Employees: 85
• Sector: Energy
• Sector Strength: 47
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.13
• Shares Outstanding: 166,700,000
• 10 Day Avg. Volume: 364,341
• 30 Day Avg. Volume: 487,141
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• 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: $12.51
• Price Target Upside: 20.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Advantage Energy's overall stock score reflects mixed financial performance, with significant strengths in operational growth and strategic positioning partly offset by challenges in profitability and cash flow. Technical indicators provide a neutral outlook, while valuation concerns are raised due to a high P/E ratio. Positive corporate events, including strong quarterly results and strategic acquisitions, enhance the stock's potential despite the underlying financial challenges.

Positive Factors

Asset Quality

Advantage Energy Ltd. holds one of the best natural gas assets in the AB Montney region, highlighting its strong potential in the market.

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 Sentiment

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., together with its subsidiaries, acquires, exploits, develops, and produces crude oil, natural gas, and natural gas liquids in the Province of Alberta, Canada. The company focuses on the development and production of oil and natural gas resource that includes 228 net sections covering an area of 145,920 net acres of Doig/Montney rights in Glacier, Valhalla, Progress, and Pipestone/Wembley. It provides natural gas, oil, and natural gas liquids primarily through marketing companies. The company was formerly known as Advantage Oil & Gas Ltd. and changed its name to Advantage Energy Ltd. in May 2021. Advantage Energy Ltd. was founded in 2001 and is headquartered in Calgary, Canada.

How the Company Makes Money

Advantage Energy generates revenue through the sale of crude oil, natural gas, and natural gas liquids extracted from its operations in Western Canada. The company capitalizes on market demand for these energy products by optimizing production and maintaining cost-effective operations. Key revenue streams include long-term supply contracts and spot market sales, which are influenced by global commodity prices and regional market conditions. Advantage Energy may also engage in strategic partnerships and joint ventures to enhance its exploration and production capabilities, further contributing to its earnings.

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

Advantage Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 10.39 is above the 20-day moving average (MA) of 9.60, above the 50-day MA of 9.81, and above the 200-day MA of 9.46, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 50.78 is Neutral, neither overbought nor oversold. The STOCH value of 50.89 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
AAV	64 Neutral	$1.73B	78.00	1.37%	―	-2.31%	-78.23%
Sector *	56 Neutral	$6.99B	3.72	-4.39%	5.96%	-0.24%	-48.44%

Advantage Energy Corporate Events

Advantage Energy Reports Strong Q1 2025 Results, Eyes Future Growth

Advantage Energy Ltd. reported strong financial and operational results for the first quarter of 2025, with cash from operating activities at $122.9 million and adjusted funds flow exceeding expectations due to asset acquisitions and cost reductions. The company achieved record production levels, particularly in liquids, and reduced operating costs, positioning itself well for future growth. Advantage has hedged a significant portion of its production for 2025 and beyond, and aims to maximize adjusted funds flow per share while focusing on debt reduction and share buybacks. The company anticipates generating over $500 million in free cash flow over the next three years, leveraging its exceptional assets and strategic market positioning.

Spark’s Take on TSE:AAV Stock

According to Spark, TipRanks’ AI Analyst, TSE:AAV is a Neutral.

Advantage Energy’s overall stock score reflects a mixed financial performance with strong gross margins and positive revenue growth offset by declining net profitability and negative free cash flow. The technical analysis provides a neutral outlook with no strong signals. The high P/E ratio suggests potential overvaluation risks. However, positive corporate events, particularly the strategic acquisition and production increases, contribute positively to the outlook.

To see Spark’s full report on TSE:AAV stock, click here.

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.