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CES Energy Solutions Corp (TSE:CEU)
:CEU
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CES Energy Solutions
(OTC:CEU)
70Outperform
CES Energy Solutions (CEU) vs. S&P 500 (SPY)
Market Cap
C$1.69B
Dividend Yield1.81%
Average Volume (3M)820.29K
Price to Earnings (P/E)9.1
Beta (1Y)0.83
Revenue Growth8.79%
EPS Growth31.76%
CountryCA
Employees2,532
SectorEnergy
Sector Strength82
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.82
Shares Outstanding224,685,120
10 Day Avg. Volume848,304
30 Day Avg. Volume820,293
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)N/A
Price to Sales (P/S)0.72
Price to Cash Flow (P/CF)6.80
P/FCF Ratio10.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.06Price Target Upside45.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
CES Energy Solutions Business Overview & Revenue Model
Company DescriptionCES Energy Solutions (CEU) is a leading provider of technically advanced consumable chemical solutions for the oil and gas industry. Operating in North America, the company specializes in drilling fluids, production chemicals, and specialty chemicals tailored to optimize the performance and efficiency of energy production processes. CES Energy Solutions serves a wide range of clients across various sectors, including upstream, midstream, and downstream operations.
How the Company Makes MoneyCES Energy Solutions primarily generates revenue through the sale of drilling fluids and production chemicals that are crucial for oil and gas exploration and production activities. The company offers a comprehensive suite of customizable chemical solutions designed to enhance wellbore stability, improve drilling efficiency, and ensure optimal production flow. Key revenue streams include the direct sale of these chemical products, as well as associated services such as technical support and application expertise. CES Energy Solutions leverages strategic partnerships with oilfield service companies and operators, ensuring a stable demand for its solutions. Additionally, the company's focus on innovation and sustainability in product development helps maintain its competitive edge and contributes significantly to its earnings.
CES Energy Solutions Financial Statement Overview
Summary
CES Energy Solutions has shown a strong recovery with significant improvements in revenue, profitability, and leverage management. However, the company still maintains a significant level of debt, which poses a risk if growth falters.Income Statement
CES Energy Solutions has demonstrated strong revenue growth, with a significant increase from $888 million in 2020 to $2.35 billion in 2024. Gross profit margin improved from 18.6% in 2020 to 24.7% in 2024, indicating better efficiency in managing costs. Net profit margin also increased from negative in 2020 to 8.1% in 2024. EBIT and EBITDA margins showed positive trends, reflecting improved operational performance. These strengths highlight the company's robust recovery and growth trajectory.85
Very Positive
Balance Sheet
The debt-to-equity ratio has been decreasing from 0.89 in 2020 to 0.54 in 2024, signifying improved leverage management. Return on equity has increased, reaching 23.5% in 2024, indicating efficient use of equity to generate profits. The equity ratio has been stable, showcasing a balanced financial structure. However, the company still maintains a significant level of debt, which could pose risks if growth falters.72
Positive
Cash Flow
Operating cash flow has shown a positive trend, with a notable increase from negative in 2021 to $304 million in 2024. Free cash flow also improved, reflecting strong cash generation capabilities. The operating cash flow to net income ratio indicates healthy cash conversion. However, fluctuations in free cash flow in earlier years suggest some volatility in capital expenditure management.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.35B | 2.16B | 1.92B | 1.20B | 888.05M | Gross Profit |
| 581.08M | 465.34M | 396.95M | 261.08M | 165.62M | EBIT |
| 266.27M | 223.17M | 166.99M | 74.16M | -4.09M | EBITDA |
| 355.93M | 296.01M | 232.69M | 141.86M | -177.18M | Net Income Common Stockholders |
| 191.11M | 154.64M | 95.22M | 49.88M | -222.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 0.00 | -59.65M | -42.02M | 18.25M | Total Assets |
| 1.54B | 1.38B | 1.41B | 1.09B | 857.89M | Total Debt |
| 436.78M | 463.72M | 551.13M | 437.20M | 317.10M | Net Debt |
| 436.78M | 463.72M | 610.77M | 479.23M | 298.85M | Total Liabilities |
| 725.10M | 719.27M | 801.95M | 600.92M | 402.23M | Stockholders Equity |
| 814.23M | 658.00M | 609.05M | 486.68M | 455.66M |
| Cash Flow | Free Cash Flow | |||
| 211.55M | 227.88M | -55.91M | -101.83M | 130.92M | Operating Cash Flow |
| 304.66M | 301.78M | -2.74M | -74.41M | 156.68M | Investing Cash Flow |
| -95.22M | -71.83M | -46.79M | -12.76M | -16.89M | Financing Cash Flow |
| -209.45M | -229.95M | 49.53M | 68.91M | -120.14M |
CES Energy Solutions Technical Analysis
Neutral
7.60
Price Trends
8.01
Negative
8.72
Negative
8.15
Negative
Market Momentum
-0.18
Negative
44.11
Neutral
74.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CEU, the sentiment is Neutral. The current price of 7.6 is above the 20-day moving average (MA) of 7.26, below the 50-day MA of 8.01, and below the 200-day MA of 8.15, indicating a neutral trend. The MACD of -0.18 indicates Negative momentum. The RSI at 44.11 is Neutral, neither overbought nor oversold. The STOCH value of 74.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CEU.
CES Energy Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$906.07M | 8.78 | 21.89% | 3.96% | 0.84% | -1.74% | |
74 Outperform | C$357.68M | 6.04 | 11.04% | 3.69% | 2.65% | 52.69% | |
70 Outperform | C$1.69B | 9.13 | 26.23% | 1.81% | 8.79% | 31.76% | |
66 Neutral | $912.84M | 8.72 | 6.90% | ― | -1.83% | -62.53% | |
59 Neutral | C$314.20M | 168.85 | 0.49% | ― | 0.98% | -96.29% | |
58 Neutral | $9.12B | 5.24 | -7.59% | 7.51% | 0.53% | -65.25% | |
53 Neutral | C$430.88M | 14.37 | -1.55% | ― | -6.00% | -150.20% |
* Energy Sector Average
Performance Comparison
TSE:CEU
CES Energy Solutions
7.60
2.26
42.38%
TSE:PD
Precision Drilling
68.85
-34.09
-33.12%
TSE:TCW
Trican Well Service
4.82
0.65
15.62%
TSE:ESI
Ensign Energy Services
2.36
-0.43
-15.41%
TSE:TOT
Total Energy Services
10.20
0.05
0.49%
TSE:STEP
STEP Energy Services
4.39
0.47
11.99%
CES Energy Solutions Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: 6.91% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
CES Energy Solutions Corp. reported strong financial results with record-breaking revenue and EBITDA, increased market share, and a substantial dividend increase. However, challenges such as margin degradation in drilling fluids, currency and tariff issues, and a working capital build were noted. Despite these challenges, the company's strategic actions and strong financial performance contributed to a predominantly positive outlook.Highlights
Second Best Quarterly Revenue
CES Energy Solutions Corp. reported $605.4 million in revenue for Q4 2024, which is 9.5% higher than Q4 of last year and just $1 million lower than their quarterly record.
Record-Breaking EBITDA
The company achieved an all-time record quarterly EBITDA of $103.2 million, marking a 22% increase compared to last year's Q4.
EBITDA Margin Improvement
The EBITDA margin improved to 17.1% in Q4 2024, up from 15.3% in Q4 2023.
Increased Market Share in North America
CES reached an industry-leading North American rig market share of over 27.7%, its highest ever in the North American land market.
Significant Share Repurchase
CES repurchased 10.6 million shares of the 19.2 million shares allowed under the current NCIB plan, representing 55% of the program.
Dividend Increase
The company announced a 42.5% increase in its quarterly dividend to $0.0425 per share from $0.03 per share.
Strong Free Cash Flow
CES reported a free cash flow of $34.6 million during the quarter and $186.9 million during 2024.
Increased Employee Count
The total number of employees at CES increased by 294 (or approximately 13%) over the year, reflecting growth.
Lowlights
Margin Degradation in Drilling Fluids
Transient margin degradation occurred in January due to a higher proportion of rigs drilling non-specialty portions of wells, anticipated to affect Q1 2025 margins.
Currency and Tariff Challenges
The roughly 8% decline in the Canadian dollar versus the U.S. dollar is causing the need to revisit pricing with customers. Canadian counter tariffs imposed may impact profitability.
Working Capital Build
A working capital build was noted, influenced by anticipation of tariffs and strategic purchasing.
Company Guidance
During the CES Energy Solutions Corp. Fourth Quarter 2024 Results Conference Call, key financial metrics and guidance for 2025 were highlighted. The company reported its second best quarterly revenue of $605.4 million, a 9.5% increase from the previous year, and a record quarterly EBITDA of $103.2 million, up 22% year-over-year. The EBITDA margin improved to 17.1% from 15.3% in Q4 2023. CES repurchased 10.6 million shares under its NCIB plan, representing 55% of the current program, and generated $34.6 million in free cash flow for the quarter. The company plans a 42.5% increase in quarterly dividends to $0.0425 per share. Looking ahead, CES anticipates $80 million in CapEx for 2025, with a focus on strategic acquisitions and maintaining a debt-to-EBITDAC ratio of 1x to 1.5x. The company holds a leading 27.7% market share in the North American rig market and expects continued growth in the U.S. and Canadian divisions. Despite challenges from tariffs and currency fluctuations, CES remains resilient, with plans to adjust pricing and production as needed.CES Energy Solutions Corporate Events
Financial Disclosures
CES Energy Solutions to Announce 2024 Financial Results in Upcoming Conference Call
Neutral
Feb 6, 2025
CES Energy Solutions Corp. announced a conference call for March 7, 2025, to discuss its financial results for Q4 and the year ended December 31, 2024, to be released after the market closes the previous day. The call, hosted by President and CEO Ken Zinger, will provide insights into the company’s performance and its strategic positioning, potentially impacting stakeholders’ views on its market standing and operational efficiency.
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.