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Adentra Inc. (TSE:ADEN)
:ADEN
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ADENTRA
(OTC:ADEN)
Rating:68Neutral
Price Target:
C$29.00
▲(7.41%Upside)
ADENTRA (ADEN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$669.88M
Dividend Yield2.11%
Average Volume (3M)86.17K
Price to Earnings (P/E)11.7
Beta (1Y)0.93
Revenue Growth3.01%
EPS Growth2.15%
CountryCA
Employees3,006
SectorIndustrials
Sector Strength93
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)0.59
Shares Outstanding24,810,398
10 Day Avg. Volume115,095
30 Day Avg. Volume86,167
Financial Highlights & Ratios
PEG Ratio-0.74
Price to Book (P/B)0.75
Price to Sales (P/S)0.00
P/FCF Ratio5.07
Enterprise Value/Market Cap1.70
Enterprise Value/Revenue0.13
Enterprise Value/Gross Profit2.40
Enterprise Value/Ebitda1.67
Forecast
1Y Price Target
C$39.33Price Target Upside45.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
ADENTRA Business Overview & Revenue Model
Company DescriptionADENTRA Inc. engages in the wholesale distribution of architectural building products to the residential, repair and remodel, and commercial construction markets. It offers a range of decorative surfaces, including architectural grade plywood and veneers, hardwood lumber, laminates, acrylics, and composites for use in commercial and residential applications; specialty plywood and composite panel products for residential and commercial cabinet, countertop, store fixture, and RV and furniture industries; and other products comprising moldings, cabinet hardware, doors, millwork, adhesives, solid surface products, and decorative laminates. The company also manufactures, imports, and distributes hardwood lumber, millwork, and architectural sheet goods. It serves small-to-mid-sized industrial manufacturers of cabinets, moldings, custom finishing, home furniture, home renovations, finishing millwork for office buildings, restaurant and bar interiors, hotel lobbies, retail point-of-purchase displays, schools, hospitals, custom motor coaches, yacht interiors, and other specialty areas. As of March 11, 2022, the company operated 86 distribution facilities in North America. The company was formerly known as Hardwoods Distribution Inc. and changed its name to ADENTRA Inc. in December 2022. ADENTRA Inc. was incorporated in 2012 and is headquartered in Langley, Canada.
How the Company Makes MoneyADENTRA generates revenue primarily through the sale of architectural building products to a wide array of customers across North America. The company sources materials from a global network of suppliers and sells them to industrial manufacturers, builders, and retailers. Key revenue streams include direct sales to manufacturers who use these materials for production, as well as to builders and contractors working on construction and renovation projects. ADENTRA also benefits from strategic partnerships with suppliers and customers, which help expand its market reach and enhance its product offerings. The company's earnings are influenced by factors such as construction market trends, economic conditions, and fluctuations in material costs.
ADENTRA Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 2.47%|
Next Earnings Date:Aug 08, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance with stable pricing and gross margins offset by declines in organic sales and profitability metrics. The company maintained a strong liquidity position and continued shareholder returns but faced challenges from increased net debt and potential tariff impacts. The sentiment is cautious due to macroeconomic uncertainties impacting the residential construction market.Q1-2025 Updates
Positive Updates
Stable Pricing and Gross Margins
Despite challenges, ADENTRA maintained stable pricing and consistent gross margins, reflecting the strength of their business model and disciplined procurement and pricing strategies.
Contribution from Woolf Distributing
Total sales grew 1.4% driven by the contribution from Woolf Distributing, acquired in July 2024, highlighting successful integration and contribution to overall sales growth.
Strong Liquidity Position
ADENTRA maintained over $360 million in available liquidity at quarter end, providing ample flexibility to navigate the current environment.
Shareholder Returns
The company returned $4.5 million to shareholders through dividends and buybacks, continuing a strong track record of shareholder returns.
Negative Updates
Decline in Organic Sales
Organic sales declined by 4%, driven by lower volumes due to tough winter weather, affordability pressures, and softness in residential construction.
Decreased Adjusted EBITDA and EPS
Adjusted EBITDA decreased to $40 million from $45.6 million, with adjusted EPS down from $0.76 to $0.42, reflecting operating leverage from lower volumes and fixed costs.
Increased Net Debt
Net debt to pro forma EBITDA increased to three times, largely due to a seasonal inventory build and proactive positioning amid potential trade disruptions.
Potential Impact of Tariffs
8% of the product mix is subject to current tariffs, with a potential increase to 35% if Section 232 tariffs are imposed, posing a risk of increased costs.
Company Guidance
During the ADENTRA First Quarter 2025 Results Conference Call, the company provided guidance on various financial metrics and strategic priorities. Total sales increased by 1.4%, driven by the acquisition of Woolf Distributing, though organic sales in the U.S. declined by 4.7% due to lower volumes. Gross margin held steady at 21.6%, reflecting disciplined execution, while adjusted EBITDA was reported at $40 million, with a 7.4% margin. Adjusted EPS came in at $0.42, down from $0.76 a year ago, attributed to lower volumes and fixed cost pressures. The company managed a seasonal inventory build, increasing inventory days by six compared to the prior year, and ended the quarter with a net debt to pro forma EBITDA ratio of three times. Despite these challenges, ADENTRA maintained over $360 million in available liquidity and returned $4.5 million to shareholders through dividends and buybacks. Looking forward, the company outlined its long-term value creation framework, targeting low-to-mid single-digit annual organic growth, annual M&A deployment of $50 million to $150 million, gross margins above 20%, adjusted EBITDA margins of 8% to 10%, and a return on invested capital of 10% to 12%.ADENTRA Financial Statement Overview
Summary
ADENTRA presents a stable but cautious financial outlook. While maintaining moderate profitability and a strong cash flow position, the company faces challenges in revenue growth and operational margin pressures. Balanced debt management is a positive, but volatility in equity returns and free cash flow growth requires careful monitoring. Strategic improvements in operational efficiency and revenue expansion could enhance financial performance.Income Statement
ADENTRA's income statement shows a mixed performance. The company experienced a slight revenue decline in the TTM period compared to the previous year, but maintained a stable gross profit margin. Net profit margins are relatively low, indicating tight cost management. The decline in EBIT and EBITDA margins suggests pressure on operational efficiency, potentially due to increased costs or pricing pressures.65
Positive
Balance Sheet
The balance sheet reflects a stable financial position with moderate leverage. The debt-to-equity ratio has improved slightly over the years, indicating effective debt management. However, equity growth has been slow, and the equity ratio remains moderate. Return on equity has shown volatility, which may pose a risk to consistent shareholder returns.70
Positive
Cash Flow
Cash flow analysis indicates strong operating cash flow, despite a declining free cash flow growth rate. The company has managed to maintain a healthy operating cash flow to net income ratio, suggesting efficient cash conversion from profits. However, the free cash flow to net income ratio has shown fluctuations, which could impact future investment capabilities.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.19B | 2.18B | 2.24B | 2.58B | 1.62B | 976.59M | Gross Profit |
| 472.81M | 474.06M | 466.10M | 556.75M | 372.91M | 187.81M | EBIT |
| 89.54M | 96.91M | 92.31M | 196.63M | 148.33M | 45.92M | EBITDA |
| 165.08M | 169.82M | 161.86M | 343.35M | 184.79M | 90.02M | Net Income Common Stockholders |
| 39.93M | 46.48M | 36.05M | 128.67M | 103.14M | 28.03M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 24.43M | 33.74M | 13.00M | 65.07M | 7.76M | 457.98K | Total Assets |
| 1.47B | 1.40B | 1.23B | 1.43B | 1.11B | 459.52M | Total Debt |
| 673.53M | 623.07M | 564.03M | 789.86M | 570.59M | 166.61M | Net Debt |
| 663.57M | 594.96M | 560.39M | 724.79M | 562.83M | 166.15M | Total Liabilities |
| 839.89M | 763.08M | 705.25M | 922.00M | 700.89M | 220.06M | Stockholders Equity |
| 633.78M | 634.57M | 526.87M | 506.97M | 414.03M | 239.46M |
| Cash Flow | Free Cash Flow | ||||
| 93.13M | 133.54M | 226.30M | 199.88M | -72.88M | 61.75M | Operating Cash Flow |
| 103.28M | 142.75M | 238.08M | 210.69M | -65.42M | 64.19M | Investing Cash Flow |
| -159.07M | -147.46M | -13.48M | -279.47M | -306.63M | ― | Financing Cash Flow |
| 59.80M | 30.00M | -285.99M | 128.61M | 378.85M | ― |
ADENTRA Technical Analysis
Neutral
27.00
Price Trends
26.71
Positive
29.86
Negative
34.57
Negative
Market Momentum
-0.15
Negative
55.71
Neutral
71.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ADEN, the sentiment is Neutral. The current price of 27 is above the 20-day moving average (MA) of 25.96, above the 50-day MA of 26.71, and below the 200-day MA of 34.57, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 55.71 is Neutral, neither overbought nor oversold. The STOCH value of 71.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ADEN.
ADENTRA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.41B | 16.05 | 9.30% | 3.89% | -0.13% | -33.06% | |
73 Outperform | C$487.25M | 11.91 | 8.09% | 6.22% | -2.65% | -47.65% | |
71 Outperform | C$752.02M | 11.76 | 10.01% | 6.51% | 14.87% | -16.06% | |
69 Neutral | C$650.71M | 7.58 | 10.37% | 4.84% | -2.42% | -4.60% | |
68 Neutral | C$669.88M | 11.70 | 6.81% | 2.11% | 3.01% | 2.15% | |
66 Neutral | $4.49B | 12.28 | 5.32% | 248.53% | 4.08% | -12.00% | |
55 Neutral | C$1.21B | ― | -9.26% | 4.03% | 1.70% | -154.73% |
* Industrials Sector Average
Performance Comparison
TSE:ADEN
ADENTRA
26.72
-10.70
-28.59%
TSE:RUS
Russel Metals
42.58
6.12
16.79%
TSE:WJX
Wajax Corporation
22.56
-1.92
-7.84%
TSE:DBM
Doman Building Materials Group
8.54
2.01
30.78%
TSE:ALC
Algoma Central
16.00
2.48
18.34%
TSE:ARE
Aecon Group Inc.
19.08
3.03
18.88%
ADENTRA Corporate Events
Business Operations and StrategyFinancial Disclosures
ADENTRA Reports Stable Q1 2025 Amid Market Challenges
Neutral
May 7, 2025
ADENTRA Inc. reported first quarter 2025 sales of $542.5 million, marking a 1.4% increase from the previous year, despite challenges such as adverse weather and a softer residential construction market. The company maintained a stable gross margin of 21.6% and managed to offset a decline in organic sales with acquisition-based growth. ADENTRA is preparing for ongoing trade uncertainties by taking precautionary inventory measures and remains focused on maintaining its financial stability and shareholder returns.
M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
ADENTRA Reports 2024 Financial Results Amid Market Challenges
Neutral
Mar 14, 2025
ADENTRA Inc. reported its financial results for the fourth quarter and full year of 2024, highlighting a slight decline in annual sales to $2.18 billion, despite a 3.1% increase in Q4 sales. The company faced challenges such as affordability constraints and slower-than-expected mortgage interest rate reductions, yet managed to improve its gross margin and maintain strong cash flow. ADENTRA also completed the acquisition of Woolf Distributing Company, enhancing its market presence in the US Midwest, and increased its quarterly dividend by 7%.
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.