ADF Group Inc. SV (TSE:DRX)
TSX:DRX
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ADF Group Inc. SV
(TSX:DRX)
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Rating:74Outperform
Price Target:
C$12.00
▲(49.07% Upside)
Action:ReiteratedDate:02/03/26
The score is primarily supported by strong profitability and a conservative balance sheet, reinforced by an established uptrend in the share price and attractive valuation (low P/E). Offsetting these positives are weak cash-flow performance and a cautious earnings backdrop where tariffs pressured revenue and margins despite a larger, more diversified backlog.
Positive Factors
Profitability
A sustained 13.23% net margin and solid EBIT/EBITDA indicate durable operational efficiency and pricing power in fabrication. This profitability buffer supports reinvestment, covers cyclical downturns in construction, and underpins long-term cash generation if margins persist.
Negative Factors
Weak Cash Flow Generation
Severely negative free cash flow growth and weak OCF-to-net-income signal persistent working capital or conversion issues. This undermines self‑funding for capex, bid bonds, and acquisitions, increasing reliance on cash reserves or external financing over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability
A sustained 13.23% net margin and solid EBIT/EBITDA indicate durable operational efficiency and pricing power in fabrication. This profitability buffer supports reinvestment, covers cyclical downturns in construction, and underpins long-term cash generation if margins persist.
Read all positive factors
ADF Group Inc. SV (DRX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$261.55M
Dividend Yield0.46%
Average Volume (3M)67.60K
Price to Earnings (P/E)5.0
Beta (1Y)0.54
Revenue Growth-26.61%
EPS Growth-45.62%
CountryCA
Employees561
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.36
Shares Outstanding16,476,336
10 Day Avg. Volume58,672
30 Day Avg. Volume67,603
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.46
Price to Sales (P/S)0.73
P/FCF Ratio5.28
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$13.00Price Target Upside61.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)1.65
Revenue Forecast (FY)C$375.40M
ADF Group Inc. SV Business Overview & Revenue Model
Company Description
ADF Group Inc. SV (DRX) is an engineering and construction company that specializes in the design, manufacture, and installation of steel structures and other related products. Operating primarily in the infrastructure, commercial, and industrial ...
How the Company Makes Money
ADF Group generates revenue primarily through contracts for steel fabrication and installation services. The company bids on projects in the construction sector, often securing contracts from both public and private entities. Key revenue streams i...
ADF Group Inc. SV Earnings Call Summary
Earnings Call Date:Dec 11, 2025
(Q3-2026)
| % Change Since: |
Next Earnings Date:Apr 09, 2026
Earnings Call Sentiment Negative
The earnings call highlighted the successful acquisition of Groupe LAR, increased order backlog, and improved diversification in backlog composition. However, these positives were overshadowed by a decline in revenues, gross margin, adjusted EBITDA, and net income, primarily due to the impact of U.S. tariffs and challenges in the market. Cash reserves also decreased significantly.Positive Updates
Groupe LAR Acquisition
The acquisition of Groupe LAR was finalized on September 18, 2025, contributing $6.2 million to revenues, $0.5 million to adjusted EBITDA, and $0.2 million to net income for the quarter.
Negative Updates
Revenue Decline
Revenues for the 9-month period ended October 31, 2025, were $179.9 million, down from $262.2 million for the same period in 2024.
Read all updates
Q3-2026 Updates
Positive
Negative
Groupe LAR Acquisition
The acquisition of Groupe LAR was finalized on September 18, 2025, contributing $6.2 million to revenues, $0.5 million to adjusted EBITDA, and $0.2 million to net income for the quarter.
Read all positive updates
Company Guidance
During the ADF Group Inc. conference call discussing the fiscal third quarter and nine months ended October 31, 2025, the company reported revenues of $71.4 million for the quarter, a decrease of $8.5 million from the previous year, and year-to-date revenues of $179.9 million compared to $262.2 million in the prior year. The gross margin for the quarter was 27.6%, down from 30.4% the previous year, with an adjusted EBITDA of $18.4 million, down from $24 million. Year-to-date, the adjusted EBITDA stood at $32.5 million, a significant decline from $72 million the prior year. The company attributed these declines to U.S. tariffs impacting fabrication hours and steel prices. Net income for the quarter was $10.3 million, or $0.36 per share, compared to $16.4 million, or $0.55 per share, in the prior year. The acquisition of Groupe LAR, finalized on September 18, 2025, contributed $6.2 million to revenues, $0.5 million to adjusted EBITDA, and $0.2 million to net income for the quarter. ADF closed the quarter with $37.7 million in cash, a decrease of $27.3 million from January, partly due to the LAR acquisition. The order backlog at quarter-end was $497.1 million, up significantly from $330.3 million the previous year, with the LAR acquisition contributing $91.9 million. The company highlighted the ongoing integration of Groupe LAR and emphasized its efforts to diversify its order backlog and mitigate risks associated with U.S. trade policies. The guidance for Q4 suggests it will be similar to Q3, promising a stable outlook for the next quarter.ADF Group Inc. SV Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
80
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Jan 2024 | Jan 2023 | Jan 2022 | Jan 2021 | Jan 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 257.34M | 339.63M | 331.02M | 250.89M | 280.74M | 172.59M |
| Gross Profit | 66.45M | 107.24M | 71.65M | 35.57M | 24.69M | 26.20M |
| EBITDA | 47.43M | 85.68M | 55.82M | 24.18M | 17.29M | 15.45M |
| Net Income | 29.05M | 56.79M | 37.62M | 14.94M | 9.56M | 6.87M |
Balance Sheet | ||||||
| Total Assets | 317.65M | 307.90M | 328.61M | 271.62M | 201.05M | 189.95M |
| Cash, Cash Equivalents and Short-Term Investments | 32.71M | 59.98M | 72.38M | 7.19M | 7.13M | 17.81M |
| Total Debt | 42.74M | 45.63M | 48.84M | 51.52M | 36.67M | 25.58M |
| Total Liabilities | 136.46M | 138.59M | 166.47M | 146.63M | 92.60M | 90.39M |
| Stockholders Equity | 181.19M | 169.31M | 162.13M | 124.98M | 108.45M | 99.56M |
Cash Flow | ||||||
| Free Cash Flow | 5.34M | 46.77M | 71.37M | -14.77M | -19.40M | 27.02M |
| Operating Cash Flow | 13.99M | 55.06M | 77.86M | -2.61M | 2.67M | 28.84M |
| Investing Cash Flow | -26.40M | -8.71M | -6.27M | -12.08M | -21.99M | -1.75M |
| Financing Cash Flow | -21.05M | -62.07M | -6.69M | 14.16M | 9.20M | -12.44M |
ADF Group Inc. SV Technical Analysis
Negative
8.05
Price Trends
9.38
Negative
8.70
Positive
8.49
Positive
Market Momentum
-0.12
Positive
45.38
Neutral
61.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DRX, the sentiment is Negative. The current price of 8.05 is below the 20-day moving average (MA) of 9.39, below the 50-day MA of 9.38, and below the 200-day MA of 8.49, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 45.38 is Neutral, neither overbought nor oversold. The STOCH value of 61.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DRX.
ADF Group Inc. SV Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$261.55M | 5.00 | 16.99% | 0.46% | -26.61% | -45.62% | |
70 Outperform | C$2.07B | 17.73 | 12.55% | 5.63% | -4.67% | -22.54% | |
70 Outperform | C$2.84B | 130.21 | 1.66% | 2.38% | 25.68% | ― | |
66 Neutral | C$684.08M | 10.32 | 10.91% | 5.09% | 3.71% | -12.70% | |
64 Neutral | C$2.17B | 33.32 | 21.42% | 2.88% | 6.26% | 0.52% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
43 Neutral | C$351.36M | -16.51 | -3.11% | 2.62% | -5.64% | -121.91% |
* Industrials Sector Average
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ADF Group Inc. SV Corporate Events
Business Operations and Strategy
ADF Group Lands $140 Million in North American Steel Structure Contracts
Positive
Jan 30, 2026
ADF Group Inc. has secured a series of new contracts in Quebec, Ontario and on the U.S. West Coast worth a combined $140 million, spanning public transportation, commercial, industrial, manufacturing and hydroelectric projects. The work, which wil...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
ADF Group Inc. Reports Third Quarter 2025 Financial Results Amid Tariff Challenges
Negative
Dec 11, 2025
ADF Group Inc. reported a decrease in revenues for the three and nine-month periods ending October 31, 2025, compared to the previous year, attributed to the impact of U.S. tariffs. Despite this, the company saw an increase in its order backlog, b...
Financial Disclosures
ADF Group Inc. Schedules Q3-2026 Financial Results Conference Call
Neutral
Dec 4, 2025
ADF Group Inc. announced it will release its financial results for the three-month and nine-month periods ending October 31, 2025, on December 11, 2025. A conference call hosted by the CFO, Jean-François Boursier, will discuss the results and...
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.