Canfor Pulp Products (CFX) AI Stock Analysis

• Market Cap: C$37.84M
• Dividend Yield: N/A
• Average Volume (3M): 63.49K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.58
• Revenue Growth: -15.38%
• EPS Growth: 94.27%
• Country: CA
• Employees: 799
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -0.19
• Shares Outstanding: 65,233,560
• 10 Day Avg. Volume: 24,286
• 30 Day Avg. Volume: 63,491
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.28
• Price to Sales (P/S): 0.06
• P/FCF Ratio: 6.52
• 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$0.52
• Price Target Upside: -10.92% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: C$0.58 ▲(0.00% Upside)

The overall stock score is primarily influenced by financial performance challenges, including declining revenues and negative profitability. Technical analysis shows some bullish momentum, but valuation concerns due to a negative P/E ratio and lack of dividend yield weigh heavily on the score.

Positive Factors

Leading NBSK producer

As a leading producer of NBSK pulp, the company benefits from scale, established customer relationships, and product reputation. This market position supports longer-term pricing power and contract access across tissue, paper and specialty markets, aiding revenue stability.

Diversified by-products & energy

Sales of wood chips and energy by-products create multiple revenue streams and improve cash generation per unit of timber harvested. Capturing value from residuals and onsite energy reduces marginal costs and cushions pulp margins through commodity cycles, enhancing structural resilience.

Moderate leverage

A debt-to-equity around 0.43 suggests manageable leverage, allowing the company to finance operations and maintenance without excessive fixed obligations. This balance provides financial flexibility to fund capital programs or weather cyclical pulp-market downturns over the medium term.

Negative Factors

Declining revenues

Sustained revenue declines reduce scale economies and weaken competitive position. Falling top-line pressures margins, limits reinvestment capacity for maintenance and growth, and makes the business more sensitive to cost shocks and pulp price volatility over the next several months.

Negative profitability

Persistent negative net and EBIT margins indicate the company cannot currently convert revenues into sustainable profits. Continued unprofitability erodes equity, restricts internal funding for capital needs, and undermines the ability to invest in efficiency or product development.

Weak cash flow conversion

Poor free cash flow and low conversion of net income into operating cash constrain capital expenditure, maintenance and debt servicing. Over a multi-month horizon, weak cash generation increases reliance on external financing and reduces capacity to respond to cyclical downturns.

Canfor Pulp Products Business Overview & Revenue Model

Company Description

Canfor Pulp Products Inc., together with its subsidiaries, engages in the production and supply of pulp and paper products in Canada, Europe, Asia, the United States, and internationally. It operates in two segments, Pulp and Paper. The company offers bleached and unbleached softwood kraft pulps; and bleached, unbleached, and coloured kraft papers. It also produces green energy. The company is headquartered in Vancouver, Canada. Canfor Pulp Products Inc. is a subsidiary of Canadian Forest Products Ltd.

How the Company Makes Money

Canfor Pulp Products generates revenue primarily through the sale of its NBSK pulp and other wood-based products. Its revenue model is largely driven by the demand for pulp in global markets, where it sells to various customers in the paper and packaging industries. Key revenue streams include sales of pulp to manufacturers of tissue and paper products, as well as the sale of by-products such as wood chips used in energy production. The company's financial performance is influenced by factors such as market prices for pulp, production capacity, operational efficiency, and the global demand for paper products. Additionally, Canfor Pulp benefits from strategic partnerships with other companies in the forestry and manufacturing sectors, which can enhance its market reach and operational capabilities.

Canfor Pulp Products Financial Statement Overview

Summary

Canfor Pulp Products faces significant financial challenges with declining revenues and profitability. While leverage is moderate, the company struggles with negative margins and poor return on equity. Cash flow generation is limited, reflecting operational difficulties in a challenging industry environment.

Income Statement

The income statement shows declining revenue with a negative growth rate of -5.45% TTM. Gross profit margin is relatively stable at 23.57%, but net profit margin is deeply negative at -19.87%, indicating significant losses. EBIT and EBITDA margins are also negative, reflecting operational challenges.

Balance Sheet

The balance sheet indicates a moderate debt-to-equity ratio of 0.42 TTM, suggesting manageable leverage. However, return on equity is significantly negative at -71.45%, highlighting poor profitability. The equity ratio is not provided, but the company's equity position appears to be under pressure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by -19.57% TTM. The operating cash flow to net income ratio is 0.32, indicating some cash flow generation despite losses. Free cash flow to net income ratio is 0.28, showing limited cash flow relative to net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	730.40M	798.60M	875.50M	1.09B	1.14B	990.50M
Gross Profit	160.80M	165.00M	101.00M	218.80M	282.80M	186.00M
EBITDA	-153.80M	-148.40M	-34.90M	-4.90M	29.60M	57.00M
Net Income	-153.90M	-161.90M	-96.10M	-79.10M	-44.40M	-22.40M
Balance Sheet
Total Assets	435.30M	452.90M	675.80M	756.00M	841.70M	920.80M
Cash, Cash Equivalents and Short-Term Investments	1.30M	15.30M	21.10M	14.70M	73.30M	6.80M
Total Debt	76.60M	99.90M	109.20M	67.80M	52.90M	52.50M
Total Liabilities	258.50M	276.90M	338.70M	328.60M	346.70M	388.30M
Stockholders Equity	176.80M	176.00M	337.10M	427.40M	495.00M	532.50M
Cash Flow
Free Cash Flow	14.80M	7.60M	-24.20M	-67.30M	70.20M	22.70M
Operating Cash Flow	53.30M	58.40M	36.30M	45.30M	148.90M	96.00M
Investing Cash Flow	-36.70M	-41.90M	-59.80M	-112.20M	-78.10M	-72.80M
Financing Cash Flow	-39.30M	-22.30M	29.90M	8.30M	-4.30M	-22.40M

Canfor Pulp Products Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CFX, the sentiment is Positive. The current price of 0.58 is above the 20-day moving average (MA) of 0.52, above the 50-day MA of 0.45, and above the 200-day MA of 0.58, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 73.56 is Negative, neither overbought nor oversold. The STOCH value of 80.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CFX.

Canfor Pulp Products Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADN	69 Neutral	C$299.90M	19.71	4.46%	7.35%	-28.86%	-48.20%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
CFX	50 Neutral	C$37.84M	-3.77	-6.02%	―	-15.38%	94.27%
WFG	48 Neutral	$7.59B	-22.58	-3.61%	2.21%	-6.67%	-168.27%
CFP	48 Neutral	C$1.63B	-3.59	-15.06%	―	1.76%	34.61%
WEF	47 Neutral	C$144.12M	-2.30	-12.20%	―	2.06%	-46.23%
IFP	46 Neutral	C$530.49M	-1.81	-20.72%	―	-3.63%	31.61%

Canfor Pulp Products Corporate Events

Canfor Corporation to Acquire Remaining Shares of Canfor Pulp

Canfor Corporation has announced its intention to acquire all outstanding shares of Canfor Pulp Products Inc. that it does not already own, through a court-approved plan of arrangement. This acquisition offers Canfor Pulp shareholders a premium on their shares and provides them with the option of cash or shares in the combined entity. The transaction is expected to enhance the combined company’s operational synergies and access to capital, while also allowing Canfor Pulp to explore other strategic alternatives during a go-shop period.

The most recent analyst rating on (TSE:CFX) stock is a Hold with a C$0.41 price target. To see the full list of analyst forecasts on Canfor Pulp Products stock, see the TSE:CFX Stock Forecast page.