ADF Group Inc. SV (DRX) AI Stock Analysis

• Market Cap: C$250.41M
• Dividend Yield: 0.46%
• Average Volume (3M): 67.60K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.52
• Revenue Growth: -26.61%
• EPS Growth: -45.62%
• Country: CA
• Employees: 561
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 0.36
• Shares Outstanding: 16,476,336
• 10 Day Avg. Volume: 58,672
• 30 Day Avg. Volume: 67,603
• 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: 49.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: C$10.00 ▲(24.22% Upside)

ADF Group Inc. has a strong financial foundation with effective cost management and low leverage, but faces challenges with revenue contraction and cash flow. The stock's technical indicators are positive, and it is attractively valued. However, recent earnings call insights reveal significant declines in key financial metrics due to external market pressures, which temper the overall outlook.

Positive Factors

Order Backlog Growth

A significant increase in order backlog indicates strong future revenue potential and demand for ADF Group's services, supporting long-term growth.

Improved Diversification

Reduced dependency on the U.S. market enhances ADF Group's resilience against regional economic fluctuations and trade policy impacts.

Strong Balance Sheet

A strong balance sheet with low leverage provides financial stability and flexibility to invest in growth opportunities and withstand economic downturns.

Negative Factors

Revenue Decline

A significant decline in revenue indicates challenges in maintaining market share and could impact profitability and cash flow if not addressed.

Cash Flow Challenges

Deteriorating cash flow limits ADF Group's ability to fund operations and growth initiatives, potentially affecting long-term financial health.

Impact of U.S. Tariffs

Tariff-related disruptions increase costs and operational inefficiencies, potentially affecting competitiveness and profitability in key markets.

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 sectors, ADF Group offers a range of services including project management, fabrication, and installation of complex steel structures for various projects such as bridges, buildings, and industrial facilities. The company is known for its commitment to quality, safety, and innovative engineering solutions.

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 include earnings from large-scale infrastructure projects, commercial buildings, and industrial facilities. Additionally, ADF Group may enter strategic partnerships with construction firms and government entities to enhance its market reach and secure more significant projects. The company's diversified portfolio and focus on quality service delivery help sustain its earnings, even in fluctuating market conditions.

ADF Group Inc. SV Financial Statement Overview

Summary

ADF Group Inc. demonstrates strong profitability with healthy margins and a stable balance sheet, highlighted by low leverage and high ROE. However, challenges in revenue growth and significant cash flow constraints pose risks, resulting in a moderate financial health score.

Income Statement

ADF Group Inc. shows a mixed performance in its income statement. The TTM data indicates a decline in revenue growth rate by 7.6%, which is concerning. However, the company maintains a healthy gross profit margin of 26.9% and a net profit margin of 13.2%, indicating strong profitability. The EBIT and EBITDA margins are also solid at 18.2% and 20.6%, respectively, suggesting efficient operations despite the revenue decline.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.24, indicating low leverage. The return on equity (ROE) is strong at 21.1%, showcasing effective use of equity to generate profits. The equity ratio stands at 54.1%, highlighting a solid equity base relative to total assets, which enhances financial stability.

Cash Flow

Cash flow analysis reveals challenges, with a significant decline in free cash flow growth by 104.5% in the TTM period. The operating cash flow to net income ratio is low at 0.02, indicating potential issues in converting income into cash. Additionally, the free cash flow to net income ratio is negative, suggesting cash flow constraints despite profitability.

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	15.45M
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	44.32M	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: Positive
• Last Price: 8.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DRX, the sentiment is Positive. The current price of 8.05 is above the 20-day moving average (MA) of 7.87, above the 50-day MA of 7.54, and above the 200-day MA of 7.71, indicating a bullish trend. The MACD of 0.28 indicates Negative momentum. The RSI at 66.60 is Neutral, neither overbought nor oversold. The STOCH value of 72.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
WJX	73 Outperform	C$593.57M	12.92	8.84%	5.09%	3.71%	-12.70%
DRX	73 Outperform	C$250.41M	8.64	16.89%	0.46%	-26.61%	-45.62%
BDT	69 Neutral	C$1.61B	17.19	21.68%	2.88%	6.26%	0.52%
WTE	68 Neutral	C$1.64B	20.13	11.46%	5.66%	-4.67%	-22.54%
ARE	65 Neutral	C$2.02B	244.64	0.92%	2.38%	25.68%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AFN	42 Neutral	C$432.59M	-64.11	-2.30%	2.62%	-5.64%	-121.91%

ADF Group Inc. SV Corporate Events

ADF Group Inc. Schedules Q3-2026 Financial Results Conference Call

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 future outlook, with a Q&A session featuring the CEO and Chairman, Jean Paschini. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic direction.

ADF Group Inc. Acquires Groupe LAR to Boost Hydroelectric Market Presence

ADF Group Inc. has completed the acquisition of Groupe LAR Inc., a leader in the design and fabrication of mechanically welded steel structures, particularly in the hydroelectricity market. The acquisition, valued at $20.4 million, is part of ADF’s strategy to double LAR’s order backlog by 2027 and capitalize on upcoming hydroelectric projects across Canada. To support this growth, ADF plans to invest over $35 million in LAR’s main plant to enhance fabrication capacity and modernize equipment, while also increasing the workforce. This strategic move is expected to create significant synergies, diversify ADF’s offerings, and mitigate risks associated with U.S. tariffs, ultimately contributing positively to ADF’s net results.

ADF Group Inc. Announces Acquisition of Groupe LAR

ADF Group Inc. has announced a conference call scheduled for October 29, 2025, to discuss its acquisition of Groupe LAR. This strategic move is expected to enhance ADF’s market position and operational capabilities, potentially benefiting stakeholders by expanding the company’s portfolio and industry reach.

ADF Group Inc. Completes Acquisition of Groupe LAR Inc.

ADF Group Inc. has successfully completed the acquisition of Groupe LAR Inc., a Canadian leader in the design, manufacture, and installation of mechanically welded steel structures. This acquisition is expected to enhance ADF’s capabilities in the large-scale hydroelectricity market and expand its offerings in customized overhead crane solutions for heavy industry, potentially strengthening its market position and operational capacity.

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.