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CES Energy Solutions Corp (TSE:CEU)
TSX:CEU
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CES Energy Solutions
(TSX:CEU)
Rating:76Outperform
Price Target:―
CES Energy Solutions (CEU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$1.39B
Dividend Yield2.12%
Average Volume (3M)574.99K
Price to Earnings (P/E)8.0
Beta (1Y)1.05
Revenue Growth8.79%
EPS Growth31.76%
CountryCA
Employees2,532
SectorEnergy
Sector Strength45
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.19
Shares Outstanding221,720,440
10 Day Avg. Volume626,354
30 Day Avg. Volume574,992
Financial Highlights & Ratios
PEG Ratio-2.07
Price to Book (P/B)1.67
Price to Sales (P/S)0.00
P/FCF Ratio7.92
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.71Price Target Upside55.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
CES Energy Solutions Business Overview & Revenue Model
Company DescriptionCES Energy Solutions Corp., together with its subsidiaries, designs, implements, and manufactures advanced consumable fluids and specialty chemicals. It provides solutions for drill-bit, point of completion and stimulation, wellhead and pump-jack, and pipeline and midstream markets. The company's solutions include corrosion inhibitors, demulsifiers, H2S scavengers, paraffin control products, surfactants, scale inhibitors, biocides, and other specialty products. It also designs and implements drilling fluid systems and completion solutions for oil and gas producers; designs and manufactures production and specialty chemicals for use in the oil and natural gas production markets, the stimulation and fracturing markets, and the pipeline and midstream markets; and operates trucks and trailers to transport products in the oil and gas industry. In addition, the company provides environmental consulting, water management services, and drilling fluids waste disposal services primarily to oil and gas producers; and laboratory services. It serves oil and natural gas industry, including multinational producers, intermediate oil and natural gas operators, independent juniors, and joint ventures, as well as pipeline and mid-stream markets in western Canada and the United States. The company was formerly known as Canadian Energy Services & Technology Corp. and changed its name to CES Energy Solutions Corp. in June 2017. CES Energy Solutions Corp. was incorporated in 1986 and is headquartered in Calgary, Canada.
How the Company Makes MoneyCES Energy Solutions generates revenue through the sale of its specialized chemical products and services to customers in the oil and gas industry. The company’s key revenue streams include the provision of drilling fluids, production chemicals, and environmental services. These products are crucial for efficient oil and gas extraction, as they help in minimizing operational challenges and maximizing output. CES Energy Solutions also benefits from strategic partnerships and long-term contracts with major oil and gas producers, which ensure a steady flow of income. The company's earnings are further bolstered by its commitment to innovation, continuously investing in research and development to create more effective solutions tailored to the evolving needs of its clients.
CES Energy Solutions Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 1.63%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted CES's strong financial performance, record revenue, and strategic market share gains despite challenges such as adverse margin effects and a decline in the U.S. rig count. The company is taking proactive measures to address potential pricing pressures and remains optimistic about future growth in its Production Chemical business.Q1-2025 Updates
Positive Updates
Record-Breaking Quarterly Revenue
CES Energy Solutions achieved all-time record quarterly revenue of $632.4 million, which was 7% higher than Q1 of last year.
Strong Market Share in North America
CES holds a leading North American land market share of over 26.5% with 182 rigs out of 687 operating. The Canadian revenue set an all-time quarterly record.
Significant Share Repurchase
CES repurchased 13.3 million shares, approximately 70% of the amount allowed under the current NCIB program, with plans to fully execute the program by July 21.
Positive Outlook for Production Chemical Business
The Production Chemical business is experiencing outsized growth in both Canada and the U.S., with significant investments for anticipated upcoming growth.
Credit Facility Extension
CES closed an amendment and extension of its senior credit facility, increasing the Canadian facility by $100 million to $550 million, with improved pricing and terms.
Negative Updates
Adverse Margin Effects
Margins in Q1 were adversely affected by various factors including Canadian dollar devaluation and tariff uncertainties, leading to cost of goods inflation.
U.S. Rig Count Decline
The number of rigs drilling in the USA is down by just over 4% since March, though CES's own rig count has increased by over 2%.
Potential Pricing Pressure
There is potential for pricing pressure due to macroeconomic uncertainties and possible downturns in WTI prices, leading to discussions with customers about price adjustments.
Company Guidance
During the CES Energy Solutions First Quarter 2025 Results Conference Call, key financial metrics indicated robust performance, with a record quarterly revenue of $632.4 million, marking a 7% increase compared to the previous year. The company reported an EBITDA of $99.9 million with margins of 15.8%. Total debt to trailing 12-month EBITDA was maintained at 1.17 times, aligning with the targeted range of 1 to 1.5 times. The cash conversion cycle was reduced to 103 days, surpassing the goal of 110 to 115 days. The company repurchased 13.3 million shares under the NCIB program and announced a 42.5% dividend increase, supported by strong cash flow generation. The capital allocation plan includes $80 million in anticipated CapEx for 2025, with a focus on strategic acquisitions and maintaining a debt level within the current range. The North American rig count was reported at 182 rigs, representing a 26.5% market share, with revenue derived 64% from the U.S. and 36% from Canada. Despite challenges like Canadian dollar devaluation and tariff uncertainties, the company expressed optimism about future prospects, driven by infrastructure projects and market conditions.CES Energy Solutions Financial Statement Overview
Summary
CES Energy Solutions shows strong revenue growth and improved profitability, with a notable recovery in its financial performance. The balance sheet indicates better leverage management, though high debt levels remain a concern. Cash flow improvements support operational stability.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.40B | 2.35B | 2.16B | 1.92B | 1.20B | 888.05M | Gross Profit |
| 577.49M | 581.08M | 465.34M | 396.95M | 261.08M | 165.62M | EBIT |
| 267.73M | 266.27M | 223.17M | 166.99M | 74.16M | -4.09M | EBITDA |
| 360.87M | 357.94M | 296.01M | 232.69M | 141.86M | -177.18M | Net Income Common Stockholders |
| 180.75M | 191.11M | 154.64M | 95.22M | 49.88M | -222.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 0.00 | 0.00 | -59.65M | -42.02M | 18.25M | Total Assets |
| 1.59B | 1.54B | 1.38B | 1.41B | 1.09B | 857.89M | Total Debt |
| 456.47M | 436.78M | 463.72M | 551.13M | 437.20M | 317.10M | Net Debt |
| 456.47M | 436.78M | 463.72M | 610.77M | 479.23M | 298.85M | Total Liabilities |
| 764.94M | 725.10M | 719.27M | 801.95M | 600.92M | 402.23M | Stockholders Equity |
| 828.88M | 814.23M | 658.00M | 609.05M | 486.68M | 455.66M |
| Cash Flow | Free Cash Flow | ||||
| 174.76M | 211.55M | 227.88M | -55.91M | -101.83M | 130.92M | Operating Cash Flow |
| 279.87M | 304.66M | 301.78M | -2.74M | -74.41M | 156.68M | Investing Cash Flow |
| -106.70M | -95.22M | -71.83M | -46.79M | -12.76M | -16.89M | Financing Cash Flow |
| -171.72M | -209.45M | -229.95M | 49.53M | 68.91M | -120.14M |
CES Energy Solutions Technical Analysis
Positive
6.25
Price Trends
6.47
Negative
7.52
Negative
7.91
Negative
Market Momentum
-0.06
Negative
49.83
Neutral
55.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CEU, the sentiment is Positive. The current price of 6.25 is above the 20-day moving average (MA) of 6.16, below the 50-day MA of 6.47, and below the 200-day MA of 7.91, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 49.83 is Neutral, neither overbought nor oversold. The STOCH value of 55.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CEU.
CES Energy Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.39B | 7.96 | 23.66% | 2.12% | 8.79% | 31.76% | |
75 Outperform | C$382.21M | 6.12 | 11.38% | 3.60% | 11.02% | 102.23% | |
72 Outperform | C$951.54M | 13.32 | 14.68% | 4.33% | 12.43% | -44.90% | |
65 Neutral | C$287.93M | 151.92 | -3.90% | ― | -5.98% | -121.37% | |
57 Neutral | $7.06B | 3.04 | -3.49% | 5.80% | 0.53% | -50.39% | |
54 Neutral | C$283.44M | 15.59 | 3.00% | ― | -5.50% | -88.55% | |
| $585.47M | 8.55 | 19.44% | 4.24% | ― | ― |
* Energy Sector Average
Performance Comparison
TSE:CEU
CES Energy Solutions
6.25
-0.43
-6.51%
TSE:CFW
Calfrac Well Services
3.30
-0.84
-20.29%
TSE:PSI
Pason Systems
12.06
-3.22
-21.07%
TSE:TOT
Total Energy Services
10.20
1.06
11.60%
TOLWF
Trican Well Service
3.17
0.10
3.26%
TSE:STEP
STEP Energy Services
4.00
-0.26
-6.10%
CES Energy Solutions Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
CES Energy Solutions Expands Credit Facility to C$550 Million
Positive
Apr 28, 2025
CES Energy Solutions Corp. has announced an amendment and extension to its credit facility, increasing the total size to approximately C$550 million. This upsized facility, led by the Bank of Nova Scotia and a syndicate of major banks, provides CES with enhanced liquidity and flexibility to manage its capital and refinance senior notes. The extension reflects CES’s increased scale and credit profile, offering strategic financial options over the coming years.
Spark’s Take on TSE:CEU Stock
According to Spark, TipRanks’ AI Analyst, TSE:CEU is a Outperform.
CES Energy Solutions demonstrates a robust financial performance with significant revenue and profitability improvements. The company’s valuation is appealing, with a low P/E ratio and a strong dividend yield. However, technical indicators point to potential short-term bearish trends, warranting caution. The positive guidance and strategic actions discussed in the earnings call bolster confidence in future growth, despite some challenges. Overall, the stock presents a balanced opportunity with both strengths and risks.
To see Spark’s full report on TSE:CEU stock, click here.
Business Operations and StrategyFinancial Disclosures
CES Energy Solutions to Discuss Q1 2025 Financial Results in Upcoming Conference Call
Neutral
Apr 17, 2025
CES Energy Solutions Corp. announced it will host a conference call on May 9, 2025, to discuss its Q1 2025 financial results, which will be released the previous day. This event will provide insights into the company’s financial performance and strategic direction, potentially impacting stakeholders’ perspectives on CES’s market positioning and operational strategies.
Spark’s Take on TSE:CEU Stock
According to Spark, TipRanks’ AI Analyst, TSE:CEU is a Outperform.
CES Energy Solutions is on a positive growth trajectory, driven by strong financial performance and strategic actions. However, technical indicators show bearish trends, and debt levels need careful management. Positive earnings call results and valuation suggest potential upside but with caution due to market conditions.
To see Spark’s full report on TSE:CEU stock, click here.
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.