tiprankstipranks
Trending News
More News >
Calfrac Well Services (TSE:CFW)
TSX:CFW
Advertisement

Calfrac Well Services (CFW) AI Stock Analysis

Compare
65 Followers

Top Page

TSE:CFW

Calfrac Well Services

(TSX:CFW)

Rating:65Neutral
Price Target:
C$4.00
▲(10.50%Upside)
Calfrac Well Services shows a promising recovery with strong technical momentum and positive corporate developments. While valuation is reasonable, cash flow concerns remain a risk factor. The company's strategic growth in Argentina and stable governance enhance its market position, driving a moderately 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 with a focus on hydraulic fracturing, coiled tubing, cementing, and other well stimulation services. Headquartered in Calgary, Alberta, the company operates in key oil and natural gas markets across North America, Russia, and South America, serving a diverse client base of oil and gas producers. Calfrac is recognized for its commitment to safety, innovation, and the efficient delivery of technical solutions that enhance the extraction and production of hydrocarbons.
How the Company Makes MoneyCalfrac Well Services generates revenue primarily through the provision of hydraulic fracturing services, which involves injecting fluid into oil and gas wells to increase the flow of hydrocarbons. This process is critical for enhancing production in both conventional and unconventional reservoirs. The company also earns money from coiled tubing services, which involve the use of a continuous length of tubing for well intervention and maintenance, and from cementing services that secure well casings. Key revenue streams include service contracts with oil and gas companies, equipment rentals, and the sale of proprietary chemicals and fluids used in well stimulation. Calfrac's earnings are influenced by the global demand for oil and gas, regional production activity, and its strategic partnerships with major energy producers.

Calfrac Well Services Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q4-2024)
|
% Change Since: 4.32%|
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 modest recovery in financial performance. The income statement indicates improved profitability with a positive net profit margin and healthy EBIT and EBITDA margins. The balance sheet is stable with a balanced debt-to-equity ratio, but cash flow remains a concern due to negative free cash flow, impacting financial flexibility.
Income Statement
70
Positive
Calfrac Well Services has shown a strong recovery in its income statement metrics. The TTM gross profit margin stands at 8.46%, an improvement from previous years, and the net profit margin is 1.13%, signaling a return to profitability. Revenue growth over the past year is 2.55%, which is modest but positive. The EBIT and EBITDA margins are healthy at 4.92% and 12.33% respectively, indicating efficient operations despite past challenges.
Balance Sheet
65
Positive
The company's balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.55, suggesting a balanced approach to leveraging. The return on equity is modest at 2.75%, indicating room for improvement in shareholder returns. The equity ratio is 52.62%, showing a solid equity base relative to total assets.
Cash Flow
55
Neutral
Cash flow metrics present mixed results. The free cash flow growth rate is negative, indicating challenges in generating positive free cash flow. The operating cash flow to net income ratio is robust at 6.98, suggesting strong cash generation relative to net income. However, the negative free cash flow to net income ratio highlights the need for better capital expenditure management.
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 Price3.62
Price Trends
50DMA
3.41
Positive
100DMA
3.47
Positive
200DMA
3.67
Negative
Market Momentum
MACD
0.03
Negative
RSI
64.41
Neutral
STOCH
81.37
Negative
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 3.62 is above the 20-day moving average (MA) of 3.47, above the 50-day MA of 3.41, and below the 200-day MA of 3.67, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 64.41 is Neutral, neither overbought nor oversold. The STOCH value of 81.37 is Negative, 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 (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
C$416.98M6.7911.38%3.39%11.02%102.23%
76
Outperform
$1.66B9.5423.66%1.98%8.79%31.76%
76
Outperform
$997.80M10.7919.44%3.40%2.15%-5.97%
66
Neutral
C$330.46M151.92-3.90%-5.98%-121.37%
65
Neutral
C$310.92M17.103.00%-5.50%-88.55%
64
Neutral
C$1.38B13.417.03%0.13%1.22%
52
Neutral
C$2.96B-1.54-3.48%6.52%3.05%-49.39%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CFW
Calfrac Well Services
3.95
-0.31
-7.28%
TSE:CEU
CES Energy Solutions
7.32
-0.59
-7.40%
TSE:TCW
Trican Well Service
5.52
0.79
16.68%
TSE:EFX
Enerflex
11.00
3.48
46.28%
TSE:TOT
Total Energy Services
11.07
1.62
17.14%
TSE:STEP
STEP Energy Services
4.52
0.19
4.39%

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.

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 26, 2025