Element Fleet Management (EFN) AI Stock Analysis

• Market Cap: $11.47B
• Dividend Yield: 1.79%
• Average Volume (3M): 727.41K
• Price to Earnings (P/E): 21.7
• Beta (1Y): 0.60
• Revenue Growth: 23.55%
• EPS Growth: 15.70%
• Country: CA
• Employees: 2,900
• Sector: Industrials
• Sector Strength: 63
• Industry: Rental & Leasing Services
• EPS (TTM): 1.31
• Shares Outstanding: 403,050,500
• 10 Day Avg. Volume: 682,864
• 30 Day Avg. Volume: 727,415
• PEG Ratio: 1.38
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.99
• Price to Cash Flow (P/CF): -18.20
• P/FCF Ratio: 0.00
• 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$34.38
• Price Target Upside: 20.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Element Fleet Management shows strong revenue growth and strategic investments positioning it for future success. However, high leverage and negative cash flows are significant risks. The technical indicators show neutral to slightly bearish trends, while the valuation suggests potential overvaluation concerns. Strong earnings call guidance and strategic initiatives provide a positive outlook, but challenges with expenses and external factors could impact performance.

Positive Factors

Dividend Policy

Element announced an 8.3% dividend increase and renewed its repurchase program, which management intends to be more active.

Revenue Performance

Higher servicing revenue, up 25% year-over-year, indicates strong performance in this segment.

Strategic Partnerships

Through this new arrangement with Blackstone, EFN benefits from a diversification of funding sources, reducing leverage, and a capital lighter model.

Negative Factors

Industry Headwinds

Headwinds facing the industry have caused vehicle under management growth to slow more than anticipated.

Market Valuation

With its strong run muting expected total return, Element is downgraded to a Hold, on a valuation basis.

Operating Expenses

Higher opex, at US$127.5mm versus US$120.2mm estimate, up 16% year-over-year on accelerated strategic investments and additional expenses associated with AutoFleet acquisition.

Element Fleet Management Business Overview & Revenue Model

Company Description

Element Fleet Management Corp. operates as a fleet management company primarily in Canada, the United States, Mexico, Australia, and New Zealand. The company offers fleet management services comprising vehicle acquisition, financing, program management, and remarketing services to corporate, commercial, government, and public service vehicle fleets. It serves construction, energy, oil and gas, food and beverage, healthcare, services, transportation, and utility industries. Element Fleet Management Corp. is headquartered in Toronto, Canada.

How the Company Makes Money

Element Fleet Management makes money primarily through service fees and interest income generated from its fleet management services and solutions. The company earns revenue by charging clients for the various services it provides, such as fleet leasing, maintenance management, and fuel management. Additionally, Element Fleet Management benefits from interest income associated with financing and leasing arrangements. Significant partnerships with vehicle manufacturers, maintenance providers, and fuel companies enhance their service offerings and contribute to revenue generation. The company's focus on data analytics and technology-driven solutions also plays a crucial role in optimizing fleet operations for clients, further strengthening their value proposition and revenue model.

Element Fleet Management Financial Statement Overview

Summary

Element Fleet Management demonstrates revenue growth and operational efficiency, but faces challenges with profitability and cash flow stability. High leverage poses a financial risk, and negative cash flows may impact future operations. While the company shows growth potential, it needs to address its cash generation issues and reliance on debt for a more balanced financial health.

Income Statement

Element Fleet Management has shown a consistent increase in total revenue from 2022 to 2024, with the latest annual revenue at approximately $2.2 billion. The gross profit margin has remained strong, reflecting efficient cost management. However, the net profit margin has decreased from 2023 to 2024, indicating a decline in profitability. EBITDA margin remains healthy, showcasing strong operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is high, indicating a significant reliance on debt financing. This is a potential risk factor. The return on equity has decreased from 2023 to 2024, suggesting reduced profitability for equity holders. However, equity ratio remains stable, indicating a balanced asset structure.

Cash Flow

The operating cash flow has been negative in recent years, which is concerning. Free cash flow has also been negative, indicating potential issues in generating cash from operations. The free cash flow to net income ratio is unfavorable, suggesting difficulties in converting net income into free cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.21B	1.99B	1.96B	1.66B	1.77B
	Gross Profit
783.96M	748.70M	809.16M	666.94M	660.34M
	EBIT
0.00	1.42B	556.74M	452.57M	428.19M
	EBITDA
1.13B	1.01B	1.16B	988.67M	1.22B
	Net Income Common Stockholders
387.14M	466.20M	409.64M	279.22M	225.14M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
128.84M	96.42M	68.88M	45.27M	8.79M
	Total Assets
12.70B	16.47B	14.33B	12.97B	14.99B
	Total Debt
8.45B	8.13B	9.02B	8.20B	10.00B
	Net Debt
8.32B	8.03B	8.95B	8.16B	10.00B
	Total Liabilities
9.93B	12.57B	10.65B	9.52B	11.21B
	Stockholders Equity
2.77B	3.90B	3.68B	3.45B	3.78B
Cash Flow		Free Cash Flow
-184.17M	-1.05B	160.77M	2.43B	2.68B
	Operating Cash Flow
-107.16M	-970.88M	229.63M	2.51B	2.78B
	Investing Cash Flow
-157.84M	-74.90M	-65.61M	-85.95M	-9.62M
	Financing Cash Flow
454.82M	1.38B	-7.59M	-2.39B	-2.83B

Element Fleet Management Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 28.47
• 50DMA: Positive
• 100DMA: Negative
• 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:EFN, the sentiment is Neutral. The current price of 28.47 is above the 20-day moving average (MA) of 28.29, above the 50-day MA of 28.43, and above the 200-day MA of 27.79, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 61.62 is Neutral, neither overbought nor oversold. The STOCH value of 73.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:EFN.

Element Fleet Management Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EFN	64 Neutral	$11.47B	21.71	13.51%	1.79%	23.55%	15.70%
Sector *	62 Neutral	$7.25B	12.39	3.08%	3.39%	3.63%	-14.32%
ACQ	57 Neutral	C$343.78M	―	7.01%	―	-16.86%	-236.70%
NFI	50 Neutral	C$1.26B	―	-0.38%	―	18.07%	98.61%

Element Fleet Management Corporate Events

Element Fleet Management Announces Board Nominations and Annual Report

Element Fleet Management has nominated Paolo Ferrari and Tracey McVicar for election to its Board of Directors, replacing outgoing members Andrew Clarke and Arielle Meloul-Wechsler. The company also released its inaugural annual report, highlighting strategic investments and trends in the fleet and mobility industry, which are expected to bolster its leadership position and set a foundation for future success.

Element Fleet Management Announces US$650 Million Senior Notes Offering

Element Fleet Management announced a private offering of US$650 million in 5.037% Senior Notes due 2030, aimed at raising funds for working capital and general corporate purposes, including potential debt repayment. The offering, set to close on March 25, 2025, is not registered under the Securities Act and is targeted at qualified institutional buyers and non-U.S. persons, reflecting Element’s strategic financial maneuvering to enhance operational flexibility and maintain its industry leadership.

Element Fleet Management Announces Private Offering of Senior Notes

Element Fleet Management has announced a proposed private offering of senior unsecured notes, with the proceeds intended for working capital and general corporate purposes, including debt repayment. This move is part of Element’s strategy to enhance financial performance and operational efficiency, potentially impacting its market positioning by leveraging its scale and expertise in fleet management.

Element Fleet Management Achieves Record 2024 Financial Results and Reaffirms 2025 Growth Outlook

Element Fleet Management Corp. reported record financial results for 2024, with net revenue reaching $1.1 billion, driven by an 18% increase in services revenue and a 9% rise in net financing revenue. The strong performance facilitated strategic investments for future growth, maintaining adjusted operating margins within the guidance range. The company reaffirmed its 2025 guidance, anticipating continued growth in net revenue and financial metrics, supported by robust client demand and a growing pipeline.

Element Fleet Management Introduces Integrated Risk Solutions for Commercial Fleets

Element Fleet Management has launched Element Risk Solutions in partnership with Hub International, aiming to revolutionize insurance and risk management for commercial fleets in the U.S. and Canada. This new offering integrates insurance coverage with claims management and advisory services, addressing the challenge of high commercial auto rates and providing clients with a streamlined, data-driven approach to manage their total cost of risk, thereby supporting business growth.