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Advantage Energy (TSE:AAV)
TSX:AAV
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Advantage Energy
(TSX:AAV)
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Rating:58Neutral
Price Target:
C$12.00
▲(3.90% Upside)
Advantage Energy's overall score is driven by strong operational efficiency and positive earnings call sentiment, which are offset by bearish technical indicators and high valuation concerns. The company's ability to navigate low pricing environments and strategic hedging are strengths, but challenges in revenue growth and cash flow generation need addressing.
Positive Factors
Operational Efficiency
High EBIT and EBITDA margins indicate efficient management and cost control, contributing to long-term profitability and competitiveness.
Market Diversification
Diversification into downstream markets helps stabilize revenue streams and reduce dependency on volatile commodity prices, supporting sustainable growth.
Production Growth Outlook
Projected production growth supports revenue expansion and enhances market position, contributing to long-term business sustainability.
Negative Factors
Revenue Decline
Declining revenue growth suggests challenges in market demand or pricing, which could impact long-term financial performance and strategic initiatives.
Negative Free Cash Flow
Negative free cash flow indicates difficulties in cash generation, potentially limiting investment in growth opportunities and financial flexibility.
Low AECO Prices Impact
Persistently low AECO prices can pressure margins and revenue, challenging the company's ability to maintain profitability in the long term.
Advantage Energy (AAV) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.93B
Dividend YieldN/A
Average Volume (3M)468.70K
Price to Earnings (P/E)32.6
Beta (1Y)1.18
Revenue Growth27.84%
EPS Growth28.87%
CountryCA
Employees85
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.26
Shares Outstanding166,941,600
10 Day Avg. Volume338,278
30 Day Avg. Volume468,700
Financial Highlights & Ratios
PEG Ratio-0.95
Price to Book (P/B)0.99
Price to Sales (P/S)2.94
P/FCF Ratio-18.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$14.17Price Target Upside22.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.48
Revenue Forecast (FY)C$719.80M
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 MoneyAdvantage Energy generates revenue primarily through the sale of oil, natural gas, and natural gas liquids extracted from its production operations. The company has a diversified revenue model that includes long-term contracts with customers as well as spot market sales, which allows it to capitalize on fluctuating commodity prices. Significant revenue streams come from its strategic focus on high-return projects in the Montney formation, where it has established a strong operational presence. Additionally, Advantage Energy benefits from partnerships with other industry players and infrastructure providers, which enhance its market access and operational efficiencies. The company's financial performance is also supported by effective hedging strategies to manage commodity price risks, ensuring stable cash flows over time.
Advantage Energy Earnings Call Summary
Earnings Call Date:Oct 28, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 20, 2026
Earnings Call Sentiment Positive
Advantage Energy demonstrated resilience in a challenging pricing environment, maintaining strong financial results and operational efficiency. While low AECO prices negatively impacted production and revenue, the company's strategic hedging, market diversification, and exceptional well performance contributed positively to its financial health. The outlook for natural gas prices and debt management flexibility further supports a positive sentiment.Q3-2025 Updates
Positive Updates
Strong Adjusted Funds Flow and Capital Management
Despite low AECO prices, Advantage Energy generated adjusted funds flow of $72 million, fully funding its $72 million capital spending program and maintaining debt neutrality.
Increased Gas Revenue and Hedging Gains
Gas revenues rose 16% year-over-year due to downstream market diversification and a successful risk management program, which yielded $34 million in realized hedging gains.
Exceptional Well Performance at Glacier
New wells at Glacier showed outstanding productivity, with one well producing at 32 million cubic feet per day, setting a record for initial productivity in the Alberta Montney.
Positive Outlook for Natural Gas Prices
Advantage Energy anticipates a positive inflection point for natural gas prices driven by easing oversupply and the commencement of LNG Canada exports.
Flexibility in Debt Management
The company introduced a debt target range of $450 million, plus or minus $50 million, to increase flexibility in share buybacks as cash flow improves.
Negative Updates
Impact of Low AECO Prices
The third quarter was marked by historically low AECO prices, including a September average of just $0.24 per GJ, affecting revenue.
Production Decline
Third-quarter production averaged 71,482 BOEs per day, down 4% year-over-year and 8% versus the prior quarter due to price-driven curtailments and maintenance.
Company Guidance
During the Advantage Energy Limited Q3 2025 Results Conference Call, the company provided guidance on several key metrics. Despite the lowest AECO prices in modern history, with an average of $0.60 per GJ and a September average of $0.24 per GJ, Advantage generated an adjusted funds flow of $72 million or $0.43 per share, fully funding their $72 million capital spending program. Revenue was largely driven by liquid sales, which made up 17% of barrel of oil equivalent (BOEs) but accounted for 64% of total revenue. The Charlie Lake asset contributed 40% of total revenue and 31% of operating income. Gas revenues increased by 16% year-over-year, aided by downstream market diversification and $34 million in realized hedging gains. Production averaged 71,482 BOEs per day, down 4% year-over-year and 8% from the previous quarter due to price-driven curtailments and maintenance. The company curtailed up to 300 million cubic feet per day of dry natural gas in September. Looking forward, Advantage anticipates Q4 production to average between 79,000 and 83,000 BOEs per day, aiming for a full-year production of 78,100 to 79,100 BOEs per day. The company expects production growth of approximately 9% annually over the next two years, with a free cash flow yield of 10% per year, supporting a total annual return of 19%. Additionally, Advantage introduced a debt target range of $450 million with a flexibility of plus or minus $50 million to facilitate strategic share buybacks.Advantage Energy Financial Statement Overview
Summary
Advantage Energy shows a mixed financial performance. Positive revenue growth is overshadowed by negative net profit margins and cash flow challenges. The balance sheet is stable with manageable leverage, but operational efficiency improvements are needed.Income Statement
Advantage Energy shows a mixed performance in its income statement. The TTM data indicates a positive revenue growth rate of 11.07%, suggesting a recovery trend. However, the net profit margin is negative at -4.84%, indicating challenges in profitability. The gross profit margin remains healthy at 48.47%, but the EBIT and EBITDA margins have declined compared to previous years, reflecting increased operational costs or reduced pricing power.65
Positive
Balance Sheet
The balance sheet reflects a moderate financial position. The debt-to-equity ratio is manageable at 0.45, indicating a balanced leverage. However, the return on equity is negative at -1.88%, highlighting inefficiencies in generating returns for shareholders. The equity ratio is stable, suggesting a solid asset base relative to equity.70
Positive
Cash Flow
Cash flow analysis reveals some concerns. The free cash flow growth rate is negative at -16.40%, and the free cash flow to net income ratio is also negative, indicating cash flow challenges. The operating cash flow to net income ratio is relatively strong at 0.85, suggesting that operating activities are generating cash, albeit not enough to cover free cash flow deficits.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 676.24M | 550.10M | 509.42M | 964.37M | 492.04M | 245.09M |
| Gross Profit | 333.70M | 298.14M | 330.99M | 719.44M | 357.72M | 123.72M |
| EBITDA | 369.35M | 283.19M | 316.34M | 597.24M | 660.25M | -237.45M |
| Net Income | 60.56M | 21.72M | 101.60M | 338.67M | 411.52M | -284.05M |
Balance Sheet | ||||||
| Total Assets | 3.03B | 2.95B | 2.30B | 2.22B | 1.99B | 1.53B |
| Cash, Cash Equivalents and Short-Term Investments | 18.47M | 20.15M | 19.26M | 48.94M | 25.24M | 3.28M |
| Total Debt | 830.24M | 698.03M | 353.98M | 192.90M | 167.34M | 249.38M |
| Total Liabilities | 1.35B | 1.31B | 742.63M | 652.28M | 534.87M | 493.55M |
| Stockholders Equity | 1.68B | 1.64B | 1.56B | 1.56B | 1.46B | 1.04B |
Cash Flow | ||||||
| Free Cash Flow | -50.97M | -85.53M | 49.73M | 260.59M | 85.31M | -57.91M |
| Operating Cash Flow | 339.48M | 217.53M | 323.35M | 502.38M | 223.15M | 100.71M |
| Investing Cash Flow | -376.69M | -697.73M | -282.76M | -269.58M | -117.78M | -158.62M |
| Financing Cash Flow | 43.47M | 481.08M | -70.26M | -209.09M | -83.41M | 48.09M |
Advantage Energy Technical Analysis
Positive
11.55
Price Trends
11.84
Negative
11.53
Positive
11.16
Positive
Market Momentum
-0.12
Positive
47.34
Neutral
29.58
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 11.55 is below the 20-day moving average (MA) of 12.08, below the 50-day MA of 11.84, and above the 200-day MA of 11.16, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 47.34 is Neutral, neither overbought nor oversold. The STOCH value of 29.58 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$2.20B | 12.92 | 23.55% | 4.67% | 6.44% | -6.74% | |
76 Outperform | $1.73B | 11.22 | 5.77% | 8.48% | -20.07% | -53.33% | |
70 Neutral | C$1.98B | 28.04 | 3.16% | 1.65% | -9.76% | 374.65% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | C$1.73B | -7.45 | 2.34% | 4.60% | -2.32% | 70.14% | |
61 Neutral | C$1.50B | 26.37 | 5.22% | ― | 9.92% | 2.74% | |
58 Neutral | C$1.93B | 32.60 | 3.69% | ― | 27.84% | 28.87% |
* Energy Sector Average
TSE:AAV
Advantage Energy
11.80
2.68
29.39%
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TSE:PXT
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Advantage Energy Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Advantage Energy Reports Resilient Q3 2025 Results Amidst Low AECO Prices
Positive
Oct 28, 2025
Advantage Energy Ltd. reported its third-quarter 2025 financial and operating results, highlighting a cash flow neutral position despite historically low AECO prices. The company managed to maintain steady capital programs and achieved exceptional drilling results at its Glacier site, reflecting its strategic focus on maximizing free cash flow and operational efficiency. Advantage’s proactive curtailment strategy during weak pricing periods led to financial benefits, while its hedging strategy aims to stabilize future production revenues. The appointment of Geoff Keyser as Vice President, Development, underscores the company’s commitment to strengthening its leadership team.
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.