ADF Group Inc. SV (DRX) AI Stock Analysis

• Market Cap: C$220.89M
• Dividend Yield: 0.51%
• Average Volume (3M): 65.38K
• Price to Earnings (P/E): 6.5
• Beta (1Y): 0.39
• Revenue Growth: -24.64%
• EPS Growth: -27.22%
• Country: CA
• Employees: 561
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 0.03
• Shares Outstanding: 16,026,392
• 10 Day Avg. Volume: 64,013
• 30 Day Avg. Volume: 65,377
• PEG Ratio: 0.07
• Price to Book (P/B): 1.46
• Price to Sales (P/S): 0.73
• P/FCF Ratio: 5.28
• 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$12.00
• Price Target Upside: 52.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 60 Neutral
• Price Target: C$8.50 ▲(8.14% Upside)

ADF Group Inc.'s overall stock score is driven by moderate financial performance and valuation, with significant challenges highlighted in the earnings call. While the company shows strong profitability and a stable balance sheet, the decline in revenue and cash flow poses risks. The technical analysis indicates mixed signals, and the valuation suggests potential undervaluation. Strategic initiatives may help mitigate some challenges, but the current outlook remains cautious.

Positive Factors

Order Backlog

A strong order backlog provides revenue visibility and stability, supporting future cash flows and operational planning.

Strategic Acquisition

The acquisition of Group LAR enhances ADF's capabilities and market reach, potentially increasing its competitive edge in the Canadian market.

Nuclear Certification

Nuclear certification opens new market opportunities in Ontario's expanding nuclear sector, diversifying revenue streams.

Negative Factors

Revenue Decline

Significant revenue decline impacts financial performance, potentially affecting investment capacity and strategic initiatives.

Decreased Gross Margins

Falling gross margins indicate increased costs or pricing pressures, which could erode profitability if not addressed.

Impact of U.S. Tariffs

Tariffs increase operational costs and disrupt supply chains, potentially impacting competitive positioning and profitability.

ADF Group Inc. SV Business Overview & Revenue Model

Company Description

ADF Group Inc. engages in the design and engineering of connections in Canada and the United States. It also fabricates and installs complex steel structures and heavy steel built-ups, as well as miscellaneous and architectural metalwork services. In addition, the company offers products and services for various segments of the non-residential construction market, including office towers and high-rises, commercial and recreational buildings, airport facilities, industrial complexes, and transport infrastructures. It serves general contractors, project owners, engineering firms and project architects, structural steel erectors, and other steel structure fabricators. The company was formerly known as Les Entreprises El Drago Ltée and changed its name to ADF Group Inc. in August 1998. ADF Group Inc. was founded in 1956 and is headquartered in Terrebonne, Canada.

How the Company Makes Money

ADF Group generates revenue through multiple streams, including the fabrication and installation of steel structures, which are key components in various construction projects. The company's revenue model is primarily project-based, where it enters into contracts with clients to provide custom solutions for specific construction needs. Additionally, ADF Group benefits from long-term partnerships with major construction firms and developers, which facilitate a steady flow of contracts and projects. Factors contributing to its earnings include the ability to secure large-scale contracts, efficiency in project execution, and a strong reputation for quality and reliability in the industry.

ADF Group Inc. SV Financial Statement Overview

Summary

ADF Group Inc. shows strong financial health with impressive revenue growth, profitability, and cash flow management. The company maintains a stable balance sheet with conservative leverage and efficient equity use.

Income Statement

ADF Group Inc. demonstrates robust profitability with a high Gross Profit Margin of 30.6% and a strong Net Profit Margin of 17.5% in TTM, indicating efficient cost management. The Revenue Growth Rate from the previous annual period to TTM is 15.1%, reflecting a healthy upward trajectory. EBIT and EBITDA margins at 25.1% and 26.4% respectively, further confirm operational efficiency and profitability.

Balance Sheet

The company's Balance Sheet is stable with a Debt-to-Equity Ratio of 0.24, indicating conservative leverage. ROE stands at 30.0% in TTM, showcasing efficient use of equity capital. However, the Equity Ratio is 55.9%, suggesting moderate reliance on equity financing, which is typical for the industry.

Cash Flow

ADF Group Inc.'s cash flow is strong, with a Free Cash Flow Growth Rate of 112.1% from the previous annual period, highlighting significant improvement. The Operating Cash Flow to Net Income Ratio of 2.04 in TTM indicates highly efficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	265.88M	339.63M	331.02M	250.89M	280.74M	172.59M
Gross Profit	71.44M	107.24M	71.65M	35.57M	24.69M	26.20M
EBITDA	54.73M	85.68M	55.82M	24.18M	17.29M	15.60M
Net Income	35.17M	56.79M	37.62M	14.94M	9.56M	6.87M
Balance Sheet
Total Assets	306.77M	307.90M	328.61M	271.62M	201.05M	189.95M
Cash, Cash Equivalents and Short-Term Investments	50.93M	59.98M	72.38M	7.19M	7.13M	17.81M
Total Debt	39.23M	45.63M	48.84M	51.52M	36.67M	25.58M
Total Liabilities	140.74M	138.59M	166.47M	146.63M	92.60M	90.39M
Stockholders Equity	166.03M	169.31M	162.13M	124.98M	108.45M	99.56M
Cash Flow
Free Cash Flow	-4.20M	46.77M	71.37M	-14.77M	-19.40M	27.02M
Operating Cash Flow	1.68M	55.06M	77.86M	-2.61M	2.67M	28.84M
Investing Cash Flow	-5.83M	-8.71M	-6.27M	-12.08M	-21.99M	-1.75M
Financing Cash Flow	-21.65M	-62.07M	-6.69M	14.16M	9.20M	-12.44M

ADF Group Inc. SV Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 7.86 is below the 20-day moving average (MA) of 8.77, below the 50-day MA of 8.76, and below the 200-day MA of 8.09, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 35.10 is Neutral, neither overbought nor oversold. The STOCH value of 15.94 is Positive, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DE	65 Neutral	148.16M	24.34	10.32%	7.52%	10.56%	25.19%
DRX	60 Neutral	C$220.89M	6.50	22.54%	0.51%	-24.64%	-27.22%
ACT	52 Neutral	543.54M	-39.37	-103.00%	―	-31.50%	-22.27%
IB	46 Neutral	9.73M	-3.28	―	―	―	―
DRT	46 Neutral	152.26M	51.95	11.21%	―	-2.68%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

ADF Group Inc. SV Corporate Events

ADF Group Inc. Reports Revenue Decline Amid U.S. Tariff Uncertainty

ADF Group Inc. reported a decline in revenues and net income for the three and six-month periods ending July 31, 2025, attributed to the uncertainty surrounding U.S. tariffs and increased steel prices. Despite these challenges, the company saw a 60% increase in its order backlog, indicating strong future demand, although it faced operational disruptions at its Terrebonne plant due to a Work-Sharing program, which has since ended.

The most recent analyst rating on (TSE:DRX) stock is a Buy with a C$11.50 price target. To see the full list of analyst forecasts on ADF Group Inc. SV stock, see the TSE:DRX Stock Forecast page.

ADF Group Inc. Announces Upcoming Financial Results Release and Conference Call

ADF Group Inc. has announced that it will release its financial results for the three-month and six-month periods ending July 31, 2025, on September 11, 2025. The announcement includes an invitation to a conference call hosted by the CFO, Jean-François Boursier, to discuss the results and future outlook. This event is significant for stakeholders as it provides insights into the company’s performance and strategic direction.

The most recent analyst rating on (TSE:DRX) stock is a Buy with a C$11.50 price target. To see the full list of analyst forecasts on ADF Group Inc. SV stock, see the TSE:DRX Stock Forecast page.

ADF Group Inc. to Acquire Groupe LAR Inc., Expanding Market Reach

ADF Group Inc. has announced an agreement to acquire Groupe LAR Inc., a Canadian leader in the design and manufacture of mechanically welded steel structures, primarily serving the hydroelectricity market. The acquisition is expected to create significant synergies, contribute positively to ADF’s net income, and diversify its offerings amidst U.S. tariff threats, while maintaining and potentially increasing jobs in the Saguenay-Lac-Saint-Jean region.

The most recent analyst rating on (TSE:DRX) stock is a Buy with a C$10.50 price target. To see the full list of analyst forecasts on ADF Group Inc. SV stock, see the TSE:DRX Stock Forecast page.