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Calfrac Well Services (TSE:CFW)
TSX:CFW

Calfrac Well Services (CFW) AI Stock Analysis

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Calfrac Well Services

(TSX:CFW)

Rating:69Neutral
Price Target:
C$4.00
▲(11.73%Upside)
Calfrac Well Services scores a 69, driven by positive corporate events and reasonable valuation. However, financial performance shows mixed results with liquidity concerns. Technical analysis supports a neutral to slightly positive outlook.

Calfrac Well Services (CFW) vs. iShares MSCI Canada ETF (EWC)

Calfrac Well Services Business Overview & Revenue Model

Company DescriptionCalfrac Well Services Ltd. is a leading provider of specialized oilfield services, primarily serving the oil and gas sectors. The company focuses on hydraulic fracturing, coiled tubing, cementing, and other well stimulation services. With operations in North America and Argentina, Calfrac is dedicated to enhancing the efficiency and productivity of oil and natural gas wells through innovative technology and expert field services.
How the Company Makes MoneyCalfrac Well Services generates revenue through its comprehensive range of oilfield services, particularly hydraulic fracturing, which involves injecting high-pressure fluid into wells to enhance oil and gas recovery. The company's revenue model is primarily project-based, where they are contracted by oil and gas producers to perform these specialized services. Key revenue streams include fees for fracturing services, equipment rentals, and the sale of related products. Calfrac's earnings are significantly influenced by the demand for oil and gas, oil prices, and the exploration and production activities of their clients. Additionally, strategic partnerships and long-term contracts with major oil and gas companies contribute to its financial stability and growth.

Calfrac Well Services Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q4-2024)
|
% Change Since: 3.17%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment. While Calfrac achieved significant safety milestones and expanded operations in Argentina, financial metrics showed notable declines, particularly in North America due to market challenges and asset write-offs. The company's focus on fleet modernization and Argentina's growth prospects offer positive outlooks, but tariff uncertainties and U.S. market pressures pose challenges.
Q4-2024 Updates
Positive Updates
Record Safety Performance
Calfrac achieved a new record in safety with a TRIF of 0.92, improved from 1.05 in 2023, demonstrating a strong safety culture.
Fleet Modernization and Expansion
The company ended the year with 66 Tier IV pumps and plans to operate five Tier IV fleets in North America by the end of Q1 2025. Additionally, Calfrac expanded its operations in Argentina, deploying a second large fracturing fleet into the Vaca Muerta shale play earlier than planned.
Argentina Growth Prospects
Record financial results in Argentina were driven by higher fracturing activity, with further expansion planned in the Vaca Muerta shale play, supported by a $50 million capital investment funded locally.
Balance Sheet Strength
Calfrac had $273.9 million in working capital at the end of Q4 2024, including $44 million in cash. The company maintained a net debt to adjusted EBITDA ratio of 1.57 and was compliant with bank covenants.
Negative Updates
Revenue and EBITDA Decline
Q4 2024 revenue was $381.2 million, down 10% from the same period in 2023. Adjusted EBITDA fell 45% to $34.5 million due to lower utilization in North America and weaker pricing in the U.S.
Net Loss and Asset Write-off
Calfrac reported a net loss of $6.4 million in Q4 2024, compared to a net income of $13.2 million in Q4 2023. This was impacted by a $12.7 million write-off of obsolete fracturing assets in the U.S. and a one-time depreciation expense adjustment.
Challenges in U.S. Market
The U.S. market faced lower activity and pricing, with a notable 10% revenue decline from the previous year, coupled with a challenging start to Q1 2025.
Tariff Impact and Cost Pressures
The introduction of tariffs is anticipated to impact costs of imported items, such as sand and chemicals, from the U.S., adding uncertainty to the supply chain.
Company Guidance
During the Calfrac Well Services Limited Fourth Quarter 2024 earnings call, the company provided several key metrics and guidance for the future. The fourth quarter revenue from continuing operations was reported at $381.2 million, a 10% decrease compared to the same period in 2023, primarily due to lower activity and pricing in the U.S. Adjusted EBITDA was $34.5 million, marking a 45% decline year-over-year. The company recorded a net loss of $6.4 million, contrasted with a net income of $13.2 million in the previous year, affected by a $12.7 million write-off of obsolete assets and a 12.2 impact on depreciation expense. Calfrac's working capital stood at $273.9 million, including $44 million in cash. The Board approved a capital budget of $135 million for 2025, with $50 million allocated for expansion in Argentina. The company ended the year with a net debt to adjusted EBITDA ratio of 1.57. Looking ahead, Calfrac plans to operate five Tier IV fracturing fleets in North America by the end of the first quarter and continue expanding in Argentina with two large fracturing fleets in the Vaca Muerta shale play. The company remains optimistic about its prospects in 2025, despite challenges such as tariffs affecting input costs and seasonal slowdowns.

Calfrac Well Services Financial Statement Overview

Summary
Calfrac Well Services demonstrates a mixed financial performance. The income statement shows declining profit margins and volatile revenue, while the balance sheet reflects moderate stability with slight increases in leverage. Cash flow challenges are notable, with negative free cash flow and deteriorating ratios, indicating potential liquidity issues.
Income Statement
65
Positive
The income statement shows a mixed performance. The gross profit margin for 2023 was 17.15%, but it declined to 7.05% in 2024. The net profit margin also decreased from 10.23% in 2023 to 0.66% in 2024. Revenue growth has been volatile, with a decrease of 15.92% from 2023 to 2024. EBIT and EBITDA margins have seen significant fluctuations, indicating instability in core operations.
Balance Sheet
70
Positive
Calfrac Well Services' balance sheet reflects moderate stability. The debt-to-equity ratio improved from 0.45 in 2023 to 0.53 in 2024, suggesting a slight increase in leverage. The return on equity decreased from 30.96% in 2023 to 1.59% in 2024, indicating lower profitability. The equity ratio improved slightly, showcasing a stable asset base.
Cash Flow
55
Neutral
Cash flow analysis reveals challenges. Free cash flow turned negative in 2024, showing a decline from 2023. The operating cash flow to net income ratio decreased from 1.48 in 2023 to 12.25 in 2024, while the free cash flow to net income ratio deteriorated significantly, indicating potential liquidity issues.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.57B1.86B1.50B1.00B705.44M
Gross Profit110.49M268.13M154.61M-18.62M-101.14M
EBITDA177.35M352.93M193.06M44.06M107.68M
Net Income10.38M190.67M35.30M-82.81M-324.24M
Balance Sheet
Total Assets1.23B1.13B995.75M892.96M912.46M
Cash, Cash Equivalents and Short-Term Investments44.05M34.14M8.50M-20.56M29.83M
Total Debt344.39M275.20M354.91M410.39M346.60M
Total Liabilities581.51M510.29M572.78M564.12M502.23M
Stockholders Equity653.33M615.90M422.97M328.84M410.23M
Cash Flow
Free Cash Flow-58.95M113.00M27.72M-78.77M-21.67M
Operating Cash Flow127.18M281.63M107.53M-15.34M24.52M
Investing Cash Flow-169.65M-144.77M-74.33M-61.29M-42.52M
Financing Cash Flow43.94M-84.13M-33.53M45.85M8.60M

Calfrac Well Services Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3.58
Price Trends
50DMA
3.39
Positive
100DMA
3.53
Positive
200DMA
3.70
Negative
Market Momentum
MACD
0.03
Negative
RSI
64.49
Neutral
STOCH
70.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CFW, the sentiment is Positive. The current price of 3.58 is above the 20-day moving average (MA) of 3.42, above the 50-day MA of 3.39, and below the 200-day MA of 3.70, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 64.49 is Neutral, neither overbought nor oversold. The STOCH value of 70.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CFW.

Calfrac Well Services Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSTOT
80
Outperform
C$415.56M6.6611.38%3.61%11.02%102.23%
TSCEU
76
Outperform
$1.56B8.9823.66%2.44%8.79%31.76%
TSTCW
75
Outperform
$932.66M10.0419.44%3.72%2.15%-5.97%
TSEFX
71
Outperform
C$1.36B13.257.03%1.36%1.22%
TSCFW
69
Neutral
C$298.04M16.913.00%-5.50%-88.55%
66
Neutral
C$321.02M151.92-3.90%-5.98%-121.37%
44
Neutral
AU$1.39B-6.73-23.02%6.50%5.33%-26.92%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CFW
Calfrac Well Services
3.58
-0.80
-18.26%
TSE:CEU
CES Energy Solutions
6.96
-0.50
-6.75%
TSE:TCW
Trican Well Service
5.38
0.89
19.80%
TSE:EFX
Enerflex
11.02
3.75
51.58%
TSE:TOT
Total Energy Services
11.09
2.19
24.61%
TSE:STEP
STEP Energy Services
4.42
0.45
11.34%

Calfrac Well Services Corporate Events

Executive/Board ChangesShareholder Meetings
Calfrac Announces Successful Election of Directors
Positive
May 15, 2025

Calfrac Well Services Ltd. announced the successful election of its board of directors at the annual shareholders’ meeting, with all nominees elected to serve until the next meeting. This election reinforces Calfrac’s commitment to maintaining stable governance and potentially strengthens its market position in the oilfield services industry.

The most recent analyst rating on (TSE:CFW) stock is a Hold with a C$5.00 price target. To see the full list of analyst forecasts on Calfrac Well Services stock, see the TSE:CFW Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Calfrac Reports Strong Q1 2025 Results with Record Performance in Argentina
Positive
May 15, 2025

Calfrac Well Services reported a strong financial performance for the first quarter of 2025, driven by record results in Argentina. The company achieved a 12% increase in revenue compared to the same period in 2024, primarily due to higher pricing and activity in Argentina’s Vaca Muerta shale play. Despite a seasonal slowdown in North America, Calfrac’s adjusted EBITDA more than doubled, reflecting the successful deployment of a second fracturing fleet in Argentina. The company also reported a net income of $7.8 million, a significant turnaround from a loss in the previous year, and plans to repatriate investments from Argentina to Canada by the third quarter of 2025.

The most recent analyst rating on (TSE:CFW) stock is a Hold with a C$5.00 price target. To see the full list of analyst forecasts on Calfrac Well Services stock, see the TSE:CFW Stock Forecast page.

Financial Disclosures
Calfrac Well Services to Announce Q1 2025 Financial Results
Neutral
Apr 9, 2025

Calfrac Well Services Ltd. announced that it will release its first quarter 2025 financial results on May 15, 2025, before the market opens. The company has scheduled a conference call and webcast for the same day to discuss the results. This announcement highlights Calfrac’s commitment to transparency and communication with its stakeholders, potentially impacting its market positioning by keeping investors informed about its financial performance.

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.Date of analysis: Jul 01, 2025