AKITA Drilling Ltd (AKT.A) AI Stock Analysis

• Market Cap: C$76.91M
• Dividend Yield: N/A
• Average Volume (3M): 29.00K
• Price to Earnings (P/E): 3.5
• Beta (1Y): 0.95
• Revenue Growth: 24.94%
• EPS Growth: 956.65%
• Country: CA
• Employees: 1,064
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Drilling
• EPS (TTM): 0.04
• Shares Outstanding: 37,615,765
• 10 Day Avg. Volume: 20,947
• 30 Day Avg. Volume: 28,997
• PEG Ratio: -0.16
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 28.62
• 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$2.25
• Price Target Upside: 15.38% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: C$2.50 ▲(28.21% Upside)

AKITA Drilling Ltd's overall stock score is driven by its strong valuation and positive technical indicators, despite challenges in financial performance due to declining revenue and cash flow growth. The stock's low P/E ratio suggests it is undervalued, and the bullish technical trend supports a positive outlook. However, the company needs to address its revenue and cash flow issues to maintain long-term stability.

Positive Factors

Low Leverage

Low leverage enhances financial stability and reduces risk, allowing the company to better weather industry volatility and invest in growth.

Strong Profitability

Strong profitability indicates efficient operations and the ability to generate profits, supporting long-term financial health and investment capacity.

Cash Generation

Strong cash generation relative to net income ensures liquidity and the ability to fund operations and growth initiatives without excessive borrowing.

Negative Factors

Declining Revenue Growth

Declining revenue growth poses a risk to future profitability and market position, potentially limiting the company's ability to invest in new opportunities.

Free Cash Flow Decline

A decline in free cash flow growth can strain financial resources, impacting the company's ability to fund operations and strategic initiatives.

Revenue and Cash Flow Issues

Sustained revenue and cash flow issues could undermine long-term stability, necessitating strategic adjustments to maintain financial health.

AKITA Drilling Ltd Business Overview & Revenue Model

Company Description

AKITA Drilling Ltd. is an oil and gas drilling contractor in Canada and the United States. It provides contract drilling services to the oil and gas industry. The company is involved in the drilling of oil and gas wells; other forms of drilling related to potash mining; and development of storage caverns. It specializes in pad and other purpose-built drilling rigs; and conventional drilling services. As of December 31, 2021, the company had 14 wholly owned and operated drilling rigs in Canada; and 8 XDR 500 rigs and 3 XDR 850XE rigs in the United States. The company was founded in 1964 and is headquartered in Calgary, Canada.

How the Company Makes Money

AKITA Drilling generates revenue primarily through contract drilling services, where it charges clients for the use of its drilling rigs and associated equipment on a per-day basis. The company typically enters into multi-year contracts with major oil and gas operators, ensuring stable revenue streams. Additionally, AKITA may earn income from ancillary services such as rig mobilization and demobilization, maintenance, and other operational support. Strategic partnerships with exploration and production companies further bolster its revenue, as these collaborations often lead to long-term contracts and repeat business. Market conditions, such as oil prices and demand for drilling rigs, significantly influence the company's earnings, with higher energy prices generally leading to increased drilling activity and revenue growth.

AKITA Drilling Ltd Financial Statement Overview

Summary

AKITA Drilling Ltd has shown a positive trend in revenue growth and improved profitability with stable EBIT and EBITDA margins. The balance sheet is healthier with a lower debt-to-equity ratio, and cash flow generation has significantly improved. However, historical volatility in financial metrics and the inherent risks of the oil and gas industry suggest caution.

Income Statement

AKITA Drilling Ltd has shown a positive trend in revenue growth, with a 5.3% increase in the TTM period. The company has improved its gross profit margin to 13.6% and net profit margin to 8.9%, indicating enhanced profitability. EBIT and EBITDA margins are stable, reflecting efficient operations. However, past volatility in revenue and margins suggests potential risks.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.30, indicating a healthier balance between debt and equity. Return on equity is at 11.2%, showing good profitability relative to shareholder investments. The equity ratio stands at 70.2%, suggesting a strong capital structure. Historical high leverage remains a concern.

Cash Flow

AKITA Drilling Ltd has demonstrated significant improvement in free cash flow, with a growth rate of 159.6% in the TTM period. The operating cash flow to net income ratio is 1.08, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 0.12, showing positive cash flow management. Past fluctuations in cash flow metrics warrant caution.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	222.12M	193.32M	225.48M	201.00M	110.09M	119.66M
Gross Profit	31.68M	21.68M	29.94M	18.85M	-8.59M	-4.87M
EBITDA	54.07M	48.26M	53.99M	34.63M	8.63M	-65.03M
Net Income	22.08M	12.86M	18.41M	4.29M	-20.99M	-93.27M
Balance Sheet
Total Assets	259.82M	268.76M	263.64M	268.28M	247.57M	251.52M
Cash, Cash Equivalents and Short-Term Investments	11.86M	7.03M	11.19M	13.31M	1.77M	7.11M
Total Debt	41.41M	51.65M	70.42M	95.31M	88.47M	77.27M
Total Liabilities	76.82M	97.26M	107.68M	130.43M	116.09M	99.25M
Stockholders Equity	183.00M	171.51M	155.96M	137.85M	131.49M	152.27M
Cash Flow
Free Cash Flow	8.93M	2.22M	10.97M	216.00K	-19.88M	15.27M
Operating Cash Flow	41.98M	30.26M	35.57M	18.20M	-3.46M	22.86M
Investing Cash Flow	-20.65M	-14.09M	-11.99M	-13.60M	-11.80M	-4.98M
Financing Cash Flow	-17.02M	-20.97M	-25.16M	5.97M	10.20M	-11.30M

AKITA Drilling Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AKT.A, the sentiment is Negative. The current price of 1.95 is below the 20-day moving average (MA) of 1.97, below the 50-day MA of 1.97, and below the 200-day MA of 2.00, indicating a bearish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 49.25 is Neutral, neither overbought nor oversold. The STOCH value of 17.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AKT.A.

AKITA Drilling Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AKT.A	73 Outperform	C$76.91M	3.51	12.87%	―	24.94%	956.65%
PD	71 Outperform	C$1.24B	22.20	3.43%	―	-5.55%	-74.96%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
ESI	56 Neutral	C$452.73M	-9.75	-3.50%	―	-2.47%	-246.73%
WRG	54 Neutral	C$69.72M	-10.17	-2.38%	―	-0.38%	6.98%
SDI	52 Neutral	C$23.99M	-300.00	-0.03%	―	-15.25%	-101.10%
HWO	49 Neutral	$11.05M	-51.48	-0.80%	―	-75.46%	-100.66%