Education
About Us
Working with TipRanks
Follow Us
ADF Group Inc. SV (TSE:DRX)
TSX:DRX
Top Page
ADF Group Inc. SV
(TSX:DRX)
Select Model
Select Model
Rating:73Outperform
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 (DRX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$262.40M
Dividend Yield0.46%
Average Volume (3M)67.60K
Price to Earnings (P/E)9.1
Beta (1Y)0.42
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$12.00Price Target Upside49.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
ADF Group Inc. SV Business Overview & Revenue Model
Company DescriptionADF 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 MoneyADF 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 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.Q3-2026 Updates
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.
Increased Order Backlog
Order backlog increased to $497.1 million as of October 31, 2025, up from $330.3 million a year earlier and $293.1 million on January 31, 2025.
Improved Diversification
The U.S. content of the consolidated backlog decreased from 95% on January 31, 2025, to 43% on October 31, 2025, indicating improved diversification.
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.
Decreased Gross Margin
Gross margin for the third quarter ended October 31, 2025, was 27.6%, down from 30.4% in the same quarter of the previous year.
Impact of U.S. Tariffs
U.S. tariffs caused nonrecoverable delays in fabrication hours and contributed to the decrease in gross margins due to increased steel prices.
Decline in Adjusted EBITDA
Adjusted EBITDA for the quarter was $18.4 million, down from $24 million a year ago, and $32.5 million year-to-date, compared to $72 million in the prior year.
Net Income Reduction
Net income for the quarter was $10.3 million, down from $16.4 million a year ago. Year-to-date net income was $20 million, compared to $47.7 million for the same period in 2024.
Cash and Cash Equivalents Decrease
Cash and cash equivalents decreased by $27.3 million compared to January 31, 2025, partly due to the Groupe LAR acquisition and working capital investments.
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
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
Positive
8.05
Price Trends
7.93
Positive
8.10
Positive
7.80
Positive
Market Momentum
0.38
Positive
61.43
Neutral
31.54
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 below the 20-day moving average (MA) of 8.79, above the 50-day MA of 7.93, and above the 200-day MA of 7.80, indicating a bullish trend. The MACD of 0.38 indicates Positive momentum. The RSI at 61.43 is Neutral, neither overbought nor oversold. The STOCH value of 31.54 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$262.40M | 9.12 | 16.89% | 0.46% | -26.61% | -45.62% | |
69 Neutral | C$1.66B | 17.71 | 21.68% | 2.88% | 6.26% | 0.52% | |
69 Neutral | C$616.27M | 13.38 | 8.84% | 5.09% | 3.71% | -12.70% | |
68 Neutral | C$1.67B | 20.48 | 11.46% | 5.63% | -4.67% | -22.54% | |
65 Neutral | C$2.04B | 244.03 | 0.92% | 2.38% | 25.68% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
48 Neutral | C$544.08M | -56.63 | -2.30% | 2.62% | -5.64% | -121.91% |
* Industrials Sector Average
TSE:DRX
ADF Group Inc. SV
8.76
0.32
3.79%
TSE:AFN
Ag Growth International
27.49
-13.57
-33.05%
TSE:ARE
Aecon Group Inc.
33.21
9.75
41.56%
TSE:BDT
Bird Construction
30.44
8.20
36.87%
TSE:WJX
Wajax Corporation
28.54
9.44
49.42%
TSE:WTE
Westshore Terminals
27.63
6.81
32.71%
ADF Group Inc. SV Corporate Events
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, bolstered by the acquisition of Groupe LAR Inc., which contributed significantly to the backlog. The company’s net income and gross margin percentages also declined year-over-year, reflecting the ongoing challenges from tariffs, though the acquisition has positioned ADF for future growth.
The most recent analyst rating on (TSE:DRX) stock is a Hold with a C$8.00 price target. To see the full list of analyst forecasts on ADF Group Inc. SV stock, see the TSE:DRX Stock Forecast page.
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 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.
The most recent analyst rating on (TSE:DRX) stock is a Hold with a C$7.50 price target. To see the full list of analyst forecasts on ADF Group Inc. SV stock, see the TSE:DRX Stock Forecast page.
Business Operations and StrategyM&A Transactions
ADF Group Inc. Acquires Groupe LAR to Boost Hydroelectric Market Presence
Positive
Oct 29, 2025
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.
The most recent analyst rating on (TSE:DRX) stock is a Hold with a C$8.50 price target. To see the full list of analyst forecasts on ADF Group Inc. SV stock, see the TSE:DRX Stock Forecast page.
Business Operations and StrategyM&A Transactions
ADF Group Inc. Announces Acquisition of Groupe LAR
Positive
Oct 23, 2025
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.
The most recent analyst rating on (TSE:DRX) stock is a Hold with a C$8.50 price target. To see the full list of analyst forecasts on ADF Group Inc. SV stock, see the TSE:DRX 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.