Element Fleet Management (EFN) AI Stock Analysis

• Market Cap: C$12.84B
• Dividend Yield: 1.42%
• Average Volume (3M): 715.16K
• Price to Earnings (P/E): 33.2
• Beta (1Y): 0.59
• Revenue Growth: 11.96%
• EPS Growth: 18.67%
• Country: CA
• Employees: 2,900
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): 0.45
• Shares Outstanding: 397,899,020
• 10 Day Avg. Volume: 625,499
• 30 Day Avg. Volume: 715,163
• PEG Ratio: 35.63
• Price to Book (P/B): 3.88
• Price to Sales (P/S): 4.67
• P/FCF Ratio: -65.10
• 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$41.79
• Price Target Upside: 29.51% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 1.42
• Revenue Forecast (FY): C$1.30B

• Rating: 50 Neutral
• Price Target: C$32.00 ▼(-0.84% Downside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is primarily held back by financial risk (negative operating/free cash flow and rising leverage) and bearish technicals (below key moving averages with negative MACD). Strong revenue growth and operational KPIs provide some offset, but valuation looks demanding given the current cash flow profile.

Positive Factors

Strong revenue growth and consistent profitability

Accelerating top-line growth to ~37% in 2025 combined with consistently positive net income indicates durable demand for Element's services and scale benefits. Over the next 2–6 months this supports reinvestment in service capabilities, cross-sell opportunities and resilience versus single-year revenue swings.

Diversified, fee-based plus financing business model

A mix of lease/financing income and recurring fee-based services (maintenance, telematics, fuel management, remarketing) creates diversified revenue streams. Fee income is more annuity-like, improving revenue visibility and enabling cross-selling across the fleet lifecycle, supporting steadier long-run cash flows if operations stabilize.

Sustained returns on equity historically

Historical ROE in the ~10–14% range shows the business has delivered acceptable economic returns over time. This level of profitability suggests core fleet management operations can generate returns above cost of equity, supporting long-term reinvestment and shareholder value provided capital structure and cash generation normalize.

Negative Factors

Materially higher leverage

Rapid debt accumulation and a ~3.6x debt/equity ratio materially increase financial risk and reduce flexibility. If funding costs rise or credit markets tighten, refinancing pressure and higher interest expense could constrain investments, limit strategic options, and amplify earnings volatility over the medium term.

Weak cash generation and negative free cash flow

A multi-year shift to negative operating and free cash flow indicates deteriorating cash conversion despite accounting profitability. This raises dependence on external capital to fund leases and operations, increases execution and liquidity risk, and may constrain capital allocation to growth, deleveraging, or shareholder returns.

Margin volatility and declining margins

Sharp swings and a structural decline in reported margins suggest inconsistent cost classification or variable economics in leasing/remarketing. Margin unpredictability weakens earnings quality and makes forecasting and long-term planning harder, potentially magnifying the impact of slower revenue or higher funding costs.

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 generates revenue primarily through its fleet management services, which include vehicle leasing, financing solutions, and maintenance services. The company earns money by charging fees for vehicle leases, interest on financing, and service fees associated with fleet management and optimization. Key revenue streams include the sale of telematics services and data analytics, which help clients manage their fleets more effectively. Additionally, Element may partner with vehicle manufacturers and dealerships to facilitate vehicle acquisition, further enhancing its revenue potential through strategic alliances. Overall, the company's earnings are bolstered by a strong focus on customer retention and long-term contracts with clients.

Element Fleet Management Financial Statement Overview

Summary

Strong revenue growth and consistently positive net income support the score, reinforced by KPI commentary showing services revenue growth and client wins. However, heavy and rising leverage and a multi-year shift to negative operating and free cash flow materially increase financial risk and weigh on the score.

Income Statement

Revenue has grown strongly over the period, accelerating to ~37% in 2025 versus low-to-mid double digit growth in prior years, while net income has remained consistently positive (~$225M–$390M). Profitability is generally solid, though net margin has stepped down from ~21–24% (2020–2022) to ~13% in 2025. Reported gross margin is unusually high in several years (near ~98–100%) and shows a sharp drop to ~33% in 2025, which suggests the cost structure may be volatile or the underlying classification may be inconsistent—this adds uncertainty to the quality/consistency of margin trends.

Balance Sheet

The balance sheet is heavily leveraged and trending more levered: total debt rose from ~$6.8B (2022) to ~$13.6B (2025), with debt-to-equity increasing to ~3.64x in 2025 (from ~2.38–2.80x in 2020–2023). Equity has grown, but not enough to offset the pace of debt expansion. Returns on equity are acceptable (roughly ~10–14% historically, ~10% in 2025), but the capital structure elevates financial risk and leaves less flexibility if funding costs rise or operating performance softens.

Cash Flow

Cash generation has deteriorated materially: operating cash flow turned negative in 2023 and remained negative in 2024 and 2025, and free cash flow is also negative in each of those years (including a further decline in 2025). This contrasts with very strong positive operating and free cash flow in 2020–2021 and modestly positive free cash flow in 2022. The recent pattern indicates weaker cash conversion and higher funding needs despite ongoing accounting profitability, increasing reliance on external capital and raising execution/liquidity risk.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.10B	2.20B	1.91B	1.46B	1.15B
Gross Profit	1.02B	2.16B	1.87B	1.42B	1.15B
EBITDA	2.48B	1.11B	925.71M	648.40M	0.00
Net Income	390.02M	386.77M	344.77M	305.30M	279.19M
Balance Sheet
Total Assets	19.03B	12.70B	9.36B	7.87B	7.98B
Cash, Cash Equivalents and Short-Term Investments	690.94M	128.84M	72.60M	37.82M	27.84M
Total Debt	13.56B	8.56B	8.21B	6.80B	6.43B
Total Liabilities	15.30B	9.92B	12.57B	10.65B	9.52B
Stockholders Equity	3.73B	2.77B	2.94B	2.74B	2.71B
Cash Flow
Free Cash Flow	-222.35M	-264.85M	-1.39B	118.45M	1.90B
Operating Cash Flow	-149.95M	-154.11M	-1.29B	169.19M	1.97B
Investing Cash Flow	-139.24M	-227.00M	-99.28M	-48.34M	-67.41M
Financing Cash Flow	510.99M	654.08M	1.40B	-5.60M	-1.87B

Element Fleet Management Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 32.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 32.27 is below the 20-day moving average (MA) of 34.25, below the 50-day MA of 34.81, and below the 200-day MA of 35.39, indicating a bearish trend. The MACD of -0.63 indicates Positive momentum. The RSI at 37.34 is Neutral, neither overbought nor oversold. The STOCH value of 24.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:EFN.

Element Fleet Management Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTT	71 Outperform	C$12.21B	24.56	19.66%	1.58%	1.32%	24.27%
TFII	65 Neutral	C$13.31B	31.02	11.61%	1.75%	-0.25%	-28.71%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
MTL	61 Neutral	C$1.65B	16.69	9.33%	5.21%	5.53%	-21.87%
CJT	59 Neutral	C$1.40B	17.76	16.75%	1.67%	7.71%	3170.43%
AC	58 Neutral	C$5.60B	8.84	-10.66%	―	-0.09%	-109.21%
EFN	50 Neutral	C$12.84B	33.22	14.26%	1.42%	11.96%	18.67%

Element Fleet Management Corporate Events

Element Fleet Management Posts Record 2025 Results, Boosts Dividend and Sets Ambitious 2026 Targets

Element Fleet Management reported record 2025 net revenue of $1.2 billion, up 9% year over year, with adjusted diluted EPS rising 13% and operating margin expanding to 56.2%, supported by disciplined expense growth. Strong client demand drove record order volumes of $6.2 billion and a 3% increase in vehicles under management to 1.56 million.

The company advanced its digital strategy with the acquisition of vehicle-based payments pioneer Car IQ, lifted its annual common dividend by 15%, and repurchased 5.4 million shares, signaling confidence in its cash generation and growth prospects. Element also introduced 2026 guidance targeting 8% to 10% net revenue growth, positive operating leverage, and continued gains in adjusted earnings and free cash flow, underscoring its focus on scalability and shareholder returns.

The most recent analyst rating on (TSE:EFN) stock is a Buy with a C$41.00 price target. To see the full list of analyst forecasts on Element Fleet Management stock, see the TSE:EFN Stock Forecast page.