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Advantage Energy (TSE:AAV)
TSX:AAV
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Advantage Energy (AAV) AI Stock Analysis

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TSE:AAV

Advantage Energy

(TSX:AAV)

Rating:60Neutral
Price Target:
C$11.50
▲(4.07%Upside)
The overall stock score reflects moderate financial performance and technical analysis indicators, with profitability challenges impacting valuation negatively. However, positive corporate events signal potential for future growth and strategic positioning, balancing the overall assessment.
Positive Factors
Operational Efficiency
Efficiency realizations from the Charlie Lake acquisition helped reduce per-unit operating costs toward the lower end of the guidance range.
Share Buybacks
The company is well-positioned to resume share buybacks later upon meeting its C$450m net debt target.
Negative Factors
Investor Frustration
Higher leverage post-acquisition has frustrated investors due to the deferral of the buyback program.
Leverage Concerns
The higher leverage post-acquisition has frustrated investors as it resulted in the buyback program being deferred.

Advantage Energy (AAV) vs. iShares MSCI Canada ETF (EWC)

Advantage Energy Business Overview & Revenue Model

Company DescriptionAdvantage 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 Moneynull

Advantage Energy Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q3-2024)
|
% Change Since: 1.38%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in production levels, cost management, and strategic infrastructure development, alongside challenges related to volatile gas prices and necessary production curtailments. The company's proactive measures and strategic focus on asset integration and cost efficiency present a positive outlook.
Q3-2024 Updates
Positive Updates
Record Production and Liquids Performance
Third quarter production averaged 34,400 BOEs per day, a 12% increase over the prior quarter and 16% over Q3 2023. Liquids production reached a record 12,800 barrels per day, up 80% over the prior quarter.
Capital Spending Reduction
Capital spending guidance for 2024 reduced to between $245 million and $275 million, a decrease of $35 million from the original budget.
Lower Operating Costs
Third quarter operating costs were $5.55 per BOE, below the expected $6 per BOE.
Strong Asset Integration
Positive early results from the integration of acquired assets, with lower operating costs and shallower production declines than expected.
Strategic Infrastructure Development
Construction of a 75 million cubic foot per day gas plant is ongoing, expected online in Q2 2025, promising significant synergies and reduced costs.
Negative Updates
Production Curtailments Due to Low Gas Prices
Production was curtailed by up to 130 million cubic feet per day due to low AECO prices, which fell to as low as $0.05 per GJ.
Volatile Gas Prices
Gas prices at regional hubs like AECO and Empress were highly volatile, affecting production decisions.
Company Guidance
During Advantage Energy Limited's Q3 2024 earnings call, several financial and operational metrics were highlighted. The company reported record production with an average of 34,400 BOEs per day, marking a 12% increase from the previous quarter and a 16% increase from Q3 2023. Liquids production also hit a record of 12,800 barrels per day, contributing to 71% of sales revenue. Operating costs were reduced to $5.55 per BOE, well below the expected $6 per BOE. Capital spending for 2024 was adjusted downwards to between $245 million and $275 million, a reduction of $35 million from the initial budget. The company's net debt remained stable at $122 million. Advantage also discussed its strategic focus on maximizing AFF per share growth and achieving a net debt target of $450 million, with potential noncore asset sales and opportunistic share buybacks considered to accelerate deleveraging.

Advantage Energy Financial Statement Overview

Summary
Advantage Energy's financial performance is moderate. Despite revenue growth, the negative net profit margin and ROE indicate profitability challenges. The balance sheet is stable with low leverage, but cash flow generation is weak, as shown by the negative free cash flow.
Income Statement
62
Positive
The income statement shows moderate performance with some fluctuations. The gross profit margin for TTM (Trailing-Twelve-Months) was 48.47%, while the net profit margin was negative at -4.84%, indicating profitability challenges. Revenue growth from the previous annual report to TTM was 14.36%, showing moderate growth. However, the EBIT and EBITDA margins for TTM were 10.86% and 38.93%, respectively, suggesting operational efficiency but with pressures on the bottom line.
Balance Sheet
70
Positive
The balance sheet reflects relatively stable financial health. The debt-to-equity ratio for TTM is 0.45, which indicates a conservative leverage position. Return on equity (ROE) is negative at -1.90%, showing pressure on shareholder returns. The equity ratio is 54.20%, demonstrating a solid equity base relative to total assets.
Cash Flow
58
Neutral
The cash flow statement highlights some concerns. The free cash flow growth rate from the previous annual report to TTM is 20.75%, indicating improvement, but free cash flow remains negative. The operating cash flow to net income ratio for TTM is -8.97, suggesting challenges in converting income to cash. The free cash flow to net income ratio is 2.23, showing limited cash generation relative to net income.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue550.10M509.42M964.37M492.04M245.09M
Gross Profit298.14M330.99M719.44M357.72M123.72M
EBITDA286.02M316.34M597.24M660.25M-237.45M
Net Income21.72M101.60M338.67M411.52M-284.05M
Balance Sheet
Total Assets2.95B2.30B2.22B1.99B1.53B
Cash, Cash Equivalents and Short-Term Investments20.15M19.26M48.94M25.24M3.28M
Total Debt698.03M353.98M192.90M167.34M249.38M
Total Liabilities1.31B742.63M652.28M534.87M493.55M
Stockholders Equity1.64B1.56B1.56B1.46B1.04B
Cash Flow
Free Cash Flow-85.53M49.73M260.59M85.31M-57.91M
Operating Cash Flow217.53M323.35M502.38M223.15M100.71M
Investing Cash Flow-697.73M-282.76M-269.58M-117.78M-158.62M
Financing Cash Flow481.08M-70.26M-209.09M-83.41M48.09M

Advantage Energy Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price11.05
Price Trends
50DMA
11.50
Negative
100DMA
10.78
Positive
200DMA
10.05
Positive
Market Momentum
MACD
-0.13
Positive
RSI
44.18
Neutral
STOCH
62.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AAV, the sentiment is Neutral. The current price of 11.05 is below the 20-day moving average (MA) of 11.21, below the 50-day MA of 11.50, and above the 200-day MA of 10.05, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 44.18 is Neutral, neither overbought nor oversold. The STOCH value of 62.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:AAV.

Advantage Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
60
Neutral
$1.85B78.00-1.90%12.70%-131.99%
52
Neutral
C$2.99B-1.51-3.48%6.43%2.60%-49.87%
$1.63B7.318.02%3.02%
$1.27B-1.19%4.25%
$1.33B13.636.10%3.80%
$1.24B9.3625.93%5.53%
$1.58B17.6611.89%7.86%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:AAV
Advantage Energy
11.05
1.92
21.03%
BTE
Baytex Energy
2.13
-1.01
-32.17%
VET
Vermilion Energy
8.22
-0.81
-8.97%
BIREF
Birchcliff Energy
4.90
1.06
27.60%
CDDRF
Headwater Exploration
5.21
0.66
14.51%
FRHLF
Freehold Royalties
9.64
0.81
9.17%

Advantage Energy Corporate Events

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Entropy Expands Carbon Storage Operations with Strategic Acquisition
Positive
Jun 23, 2025

Entropy Inc. has entered a definitive agreement to acquire interests in three carbon storage hubs in Saskatchewan and Alberta for $20 million, with additional contingent payments. This acquisition, funded through convertible debentures from strategic investment agreements, will expand Entropy’s operations and customer base, enhancing its commitment to carbon capture and sequestration in Canada. The company continues to advance its Glacier gas plant operations, with Phase 2 expected to reach commercial operations by Q2 2026, despite challenges from tariffs and inflation.

The most recent analyst rating on (TSE:AAV) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Advantage Energy stock, see the TSE:AAV Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Advantage Energy Announces Director Election Results at Annual Meeting
Neutral
May 7, 2025

Advantage Energy Ltd. held its annual general meeting on May 6, 2025, where shareholders approved the election of ten directors to serve until the next annual meeting. The meeting saw a high turnout with 83.52% of outstanding common shares represented. Notably, Stephen E. Balog and Andy J. Mah retired from the Board, and Advantage expressed gratitude for their contributions.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Advantage Energy Reports Strong Q1 2025 Results, Eyes Future Growth
Positive
May 1, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 29, 2025