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Element Fleet Management Corp. (TSE:EFN)
:EFN
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Element Fleet Management (EFN) AI Stock Analysis

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TSE:EFN

Element Fleet Management

(OTC:EFN)

Rating:71Outperform
Price Target:
C$41.00
▲(12.76% Upside)
Element Fleet Management's overall stock score is driven by strong earnings performance and positive technical indicators. However, concerns about high leverage and moderate valuation metrics temper the outlook. The company's strategic initiatives and client expansion efforts are promising, but foreign exchange impacts and revenue growth challenges remain areas to watch.
Positive Factors
Analyst Recommendation
Analyst recommends a buy rating for Element Fleet Management Corp., indicating a positive outlook for the company's stock.
Revenue Performance
Higher servicing revenue, at $161.5mm versus $140.1mm estimate, up 25% year-over-year on higher penetration and utilization rates.
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
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.
Revenue Challenges
Lower finance revenue and syndication revenue, along with higher operating expenses, present challenges despite growth in other areas.

Element Fleet Management (EFN) vs. iShares MSCI Canada ETF (EWC)

Element Fleet Management Business Overview & Revenue Model

Company DescriptionElement 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 MoneyElement Fleet Management generates revenue through multiple key streams. Primarily, the company earns money by providing fleet financing solutions, including leasing and loans for vehicles. This includes both full-service leasing, which encompasses vehicle maintenance and management services, and finance leasing, where the customer takes on more responsibilities. Additionally, EFN earns revenue from maintenance services, telematics solutions, and remarketing vehicles at the end of their lifecycle. Significant partnerships with vehicle manufacturers, service providers, and technology firms enhance its service offerings and drive additional revenue. The company also benefits from economies of scale, leveraging its large fleet portfolio to negotiate better terms with suppliers and service providers, thereby increasing profitability.

Element Fleet Management Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and strategic advancements, including record revenue growth, client acquisition, and digital innovation. However, challenges such as foreign exchange headwinds and a decline in originations were noted. Overall, the positive aspects significantly outweigh the challenges.
Q2-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Element delivered record results in Q2 2025, with net revenue of $290 million, an increase of 6% year-over-year. Adjusted for foreign exchange, net revenue grew 9%.
Strong Client Acquisition and Service Expansion
Element welcomed 46 new clients and added 265 new service enrollments in Q2. The Strategic Advisory Services team identified over $390 million in savings opportunities for clients, with 43% actioned.
Financial Metrics Improvement
Adjusted earnings per share grew 7% to $0.30, and free cash flow per share increased 8% to $0.40 year-over-year. Adjusted return on equity rose to 17.5%, up 120 basis points year-over-year.
Digital and Sustainability Initiatives
Launched Element Mobility, a new division for intelligent mobility, and established partnerships with Samsara and Modis. Released the fifth annual sustainability report.
Negative Updates
Foreign Exchange Headwinds
The Mexican peso depreciated 13% against the U.S. dollar, leading to a $10 million reduction in net revenue and a $0.02 decrease in diluted earnings per share.
Decline in Originations
Origination volumes totaled $1.9 billion, down 4% year-over-year. Adjusted for FX, originations declined 2%.
Company Guidance
In its second quarter 2025 earnings call, Element Fleet Management reported a record quarter, driven by robust financial and operational performance. The company achieved an adjusted earnings per share of $0.30 and free cash flow per share of $0.40, marking year-over-year growth of 7% and 8%, respectively. Net revenue reached $290 million, up 6% from the previous year and 9% when adjusted for foreign exchange impacts. Element welcomed 46 new clients and saw a 9% increase in total client order volumes. The company's Strategic Advisory Services team identified $390 million in savings opportunities, with 43% actioned. Element also launched a new division, Element Mobility, and announced partnerships with Samsara and Modis to enhance its tech-enabled solutions, signaling continued investment in digital innovation. The company returned $61 million to shareholders through dividends and share repurchases, maintaining a debt-to-capital ratio within its target range. Element projects to end the year meeting or exceeding its financial guidance across key metrics, excluding originations, which are expected to improve as economic conditions stabilize.

Element Fleet Management Financial Statement Overview

Summary
Element Fleet Management demonstrates strong profitability with robust margins. However, the company faces challenges in revenue growth and high leverage, indicated by a high debt-to-equity ratio. Cash flows are improving, but cash conversion efficiency remains a concern.
Income Statement
75
Positive
Element Fleet Management shows strong gross and net profit margins in the latest TTM, with a gross profit margin of 36.4% and a net profit margin of 17.8%. However, there is a negative revenue growth rate of -6.4% from the previous annual report, which is a concern. EBIT and EBITDA margins remain robust at 33.5% and 60.7% respectively, indicating efficient operations.
Balance Sheet
65
Positive
The company's balance sheet reflects a high debt-to-equity ratio of 3.32, suggesting significant leverage, which could pose risks. However, the return on equity is solid at 13.5%, and the equity ratio is fair at 20.7%, indicating a reasonable proportion of the assets are financed by equity.
Cash Flow
55
Neutral
Cash flow analysis reveals a positive free cash flow growth rate from negative to positive, indicating improvement. However, the operating cash flow to net income ratio is low at 0.96, suggesting potential issues in converting income to cash. The free cash flow to net income ratio is 0.47, indicating moderate cash generation relative to net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.06B2.21B1.99B1.96B1.66B1.77B
Gross Profit751.38M783.96M748.70M809.16M666.94M660.34M
EBITDA1.25B1.13B1.01B1.16B988.67M1.22B
Net Income367.99M387.14M466.20M409.64M279.22M225.14M
Balance Sheet
Total Assets13.15B12.70B16.47B14.33B12.97B14.99B
Cash, Cash Equivalents and Short-Term Investments497.96M128.84M96.42M68.88M45.27M8.79M
Total Debt9.02B8.45B8.13B9.02B8.20B10.00B
Total Liabilities10.43B9.93B12.57B10.65B9.52B11.21B
Stockholders Equity2.72B2.77B3.90B3.68B3.45B3.78B
Cash Flow
Free Cash Flow171.71M-184.17M-1.05B160.77M2.43B2.68B
Operating Cash Flow351.63M-107.16M-970.88M229.63M2.51B2.78B
Investing Cash Flow-140.45M-157.84M-74.90M-65.61M-85.95M-9.62M
Financing Cash Flow11.37M454.82M1.38B-7.59M-2.39B-2.83B

Element Fleet Management Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price36.36
Price Trends
50DMA
35.49
Positive
100DMA
33.28
Positive
200DMA
30.89
Positive
Market Momentum
MACD
0.28
Positive
RSI
50.58
Neutral
STOCH
21.65
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 36.36 is below the 20-day moving average (MA) of 36.74, above the 50-day MA of 35.49, and above the 200-day MA of 30.89, indicating a neutral trend. The MACD of 0.28 indicates Positive momentum. The RSI at 50.58 is Neutral, neither overbought nor oversold. The STOCH value of 21.65 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
C$14.68B26.1714.26%1.39%13.20%11.74%
64
Neutral
$10.95B16.378.81%1.96%2.68%-15.33%
$12.45B39.6014.26%0.57%
$7.82B21.7813.80%1.86%
$11.12B6.3157.95%0.08%
71
Outperform
C$7.52B16.0318.07%2.03%2.36%0.62%
$2.52B2.67-0.29%0.89%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:EFN
Element Fleet Management
36.63
9.47
34.86%
STN
Stantec
110.03
27.90
33.97%
TFII
TFI International
94.19
-52.13
-35.63%
SNCAF
AtkinsRealis
67.73
27.88
69.96%
TSE:FTT
Finning International
57.39
18.38
47.12%
BBU
Brookfield Business Partners
28.02
7.74
38.17%

Element Fleet Management Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Element Fleet Management Reports Record Q2 2025 Results Amid Economic Challenges
Positive
Aug 6, 2025

Element Fleet Management Corp. reported record quarterly results for Q2 2025, showcasing the resilience of its business model amid challenging economic conditions. The company achieved a 6% year-over-year increase in net revenues, driven by higher services and net financing revenue, despite unfavorable foreign currency impacts. Adjusted operating expenses rose by 5%, resulting in an expanded operating margin of 55.8%. The company also saw a 7% increase in adjusted diluted EPS and an 8% growth in diluted free cash flow per share. Element’s global committed order pipeline reached $1.7 billion, reflecting strong client demand, and the company anticipates ending the year at or above the high-end of its guidance ranges in all metrics except originations. Additionally, Element repurchased 3.1 million common shares for approximately $64 million, underscoring its commitment to creating shareholder value.

The most recent analyst rating on (TSE:EFN) stock is a Buy with a C$33.00 price target. To see the full list of analyst forecasts on Element Fleet Management stock, see the TSE:EFN Stock Forecast page.

Business Operations and Strategy
Element Fleet Management Advances Sustainability with 2025 Report
Positive
May 28, 2025

Element Fleet Management has released its 2025 Sustainability Report, highlighting significant progress in its climate strategy and transparency efforts. The report showcases achievements such as surpassing Scope 1 and 2 emission reduction targets, aligning decarbonization initiatives with global best practices, and enhancing sustainability governance and disclosure practices. Element’s commitment to sustainability is evident in its efforts to foster inclusion and belonging, and its dedication to continuous improvement positions the company for long-term resilience and shared prosperity.

The most recent analyst rating on (TSE:EFN) stock is a Buy with a C$33.00 price target. To see the full list of analyst forecasts on Element Fleet Management stock, see the TSE:EFN 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.Date of analysis: Aug 12, 2025