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Element Fleet Management
(TSX:EFN)
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Rating:55Neutral
Price Target:
C$31.00
▼(-5.29% Downside)
Action:Reiterated
Date:05/11/26
The score is held back primarily by high leverage and historically inconsistent cash flow conversion, along with weak current technicals (below major moving averages and negative MACD). These are partially offset by a strong Q1 earnings call with reaffirmed 2026 guidance, record profitability/ROE, improving margins, and growing free cash flow per share, while valuation remains only moderately supportive given the ~25.8 P/E and ~1.93% yield.
Positive Factors
High ROE & margins
Record ROE and very strong operating margins reflect durable operational efficiency in Element's fleet financing and services model. High returns on equity and margins support sustained capital returns, reinvestment in growth and resilience to cyclical headwinds over the next several quarters.
Negative Factors
High leverage
Elevated leverage is inherent to the asset-financing business and reduces financial flexibility, making earnings and cash flows more sensitive to funding costs and credit cycles. High leverage constrains optionality for M&A, buybacks or cushioning through downturns absent material deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
High ROE & margins
Record ROE and very strong operating margins reflect durable operational efficiency in Element's fleet financing and services model. High returns on equity and margins support sustained capital returns, reinvestment in growth and resilience to cyclical headwinds over the next several quarters.
Read all positive factors
Element Fleet Management (EFN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$11.81B
Dividend Yield1.42%
Average Volume (3M)715.16K
Price to Earnings (P/E)28.9
Beta (1Y)0.57
Revenue Growth3.53%
EPS Growth-25.44%
CountryCA
Employees3,000
SectorIndustrials
Sector Strength72
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)0.73
Shares Outstanding395,992,370
10 Day Avg. Volume625,499
30 Day Avg. Volume715,163
Financial Highlights & Ratios
PEG Ratio-1.95
Price to Book (P/B)5.33
Price to Sales (P/S)6.41
P/FCF Ratio-65.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$38.80Price Target Upside18.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.42
Revenue Forecast (FY)C$1.31B
Element Fleet Management Business Overview & Revenue Model
Company Description
Element Fleet Management Corp. is a prominent provider of fleet management services, with its core operations spanning Canada, the U.S., Mexico, Australia, and New Zealand. It furnishes a comprehensive suite of solutions, including vehicle procure...
How the Company Makes Money
Element Fleet Management generates revenue primarily by providing a suite of fleet management and financing-related services over the life cycle of a client’s fleet. Key revenue streams include: (1) Financing/lease-related revenue: Element provide...
Element Fleet Management Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call reports multiple record financial and operational achievements — including record net revenue, improved margins, highest ever ROE, strong free cash flow growth and solid client retention — supported by clear progress on digital and mobility initiatives (Car IQ, Nova, Element ONE). Offsetting items include a modest decline in originations driven by a normalizing originate‑to‑syndicate client and timing shifts, a single‑client credit provision, elevated expenses (notably compensation) related to strategic investments, and some seasonality/lag in services monetization. Management framed the negatives as manageable, emphasized disciplined funding and execution, and reiterated confidence in strategy and guidance.Positive Updates
Record Net Revenue
Net revenue of $324 million in Q1 2026, up 17% year‑over‑year, representing a record quarter for the company.
Negative Updates
Originations Decline and Timing Risk
Originations were $1.5 billion in Q1, down 4% year‑over‑year, primarily due to the expected reduction from an originate‑to‑syndicate client and timing shifts (clients delaying orders), which could affect Q2 originations.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Net Revenue
Net revenue of $324 million in Q1 2026, up 17% year‑over‑year, representing a record quarter for the company.
Read all positive updates
Company Guidance
Management left 2026 guidance intact after a strong Q1: net revenue $324M (+17% YoY), adjusted operating income $182M, adjusted EPS $0.35, adjusted free cash flow per share $0.45 (+25% YoY) and a record ROE of 20.3%; they reiterated expected 2026 originations of $6.5–$6.9B while noting Q1 originations were $1.5B (‑4% YoY) with ~40% of orders still to be activated (following a $2.0B order book in Q4), and said timing shifts may push some originations into Q2 but should not materially change revenue or adjusted operating income guidance. Other key metrics cited: services revenue $162M (+6% YoY) with Vehicles Under Management +3%, net financing revenue $138M and a core NFR yield of 4.98% (+40 bps), syndication volume $867M producing $24M (syndication yield 2.8%, +70 bps), operating expenses $142M (+13%) but positive operating leverage of 3.9% and operating margin of 56.2% (vs. 54.7% a year ago), a Q1 PCL of $4.6M bringing the allowance to $15.3M (~20 bps of financing receivables), ~$94M returned to shareholders in the quarter (including $57M to repurchase 2.3M shares), debt‑to‑capital 76.4% (target 73–77%), and management said expense growth should moderate while maintaining a long‑term revenue growth target of 6–8%.Element Fleet Management Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
52
Neutral
Cash Flow
36
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.36B | 2.26B | 2.20B | 1.91B | 1.46B | 1.59B |
| Gross Profit | 1.03B | 745.95M | 2.16B | 1.87B | 1.42B | 467.44M |
| EBITDA | 1.56B | 1.81B | 1.11B | 925.71M | 648.40M | 1.19B |
| Net Income | 292.52M | 284.02M | 386.77M | 344.77M | 409.64M | 356.01M |
Balance Sheet | ||||||
| Total Assets | 13.57B | 13.86B | 12.70B | 16.47B | 14.33B | 12.97B |
| Cash, Cash Equivalents and Short-Term Investments | 662.83M | 503.14M | 128.84M | 72.60M | 37.82M | 27.84M |
| Total Debt | 9.66B | 9.88B | 8.56B | 8.21B | 6.80B | 8.30B |
| Total Liabilities | 10.87B | 11.14B | 9.92B | 12.57B | 10.65B | 9.52B |
| Stockholders Equity | 2.70B | 2.72B | 2.77B | 3.90B | 3.68B | 3.45B |
Cash Flow | ||||||
| Free Cash Flow | 116.25M | -222.35M | -264.85M | -1.39B | 118.45M | 1.90B |
| Operating Cash Flow | 388.35M | -149.95M | -154.11M | -1.29B | 169.19M | 1.97B |
| Investing Cash Flow | -357.81M | -139.24M | -227.00M | -99.28M | -48.34M | -67.41M |
| Financing Cash Flow | -110.94M | 510.99M | 654.08M | 1.40B | -5.60M | -1.87B |
Element Fleet Management Technical Analysis
Positive
32.73
Price Trends
28.19
Positive
29.92
Negative
32.76
Negative
Market Momentum
0.52
Negative
64.08
Neutral
51.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EFN, the sentiment is Positive. The current price of 32.73 is above the 20-day moving average (MA) of 28.83, above the 50-day MA of 28.19, and below the 200-day MA of 32.76, indicating a neutral trend. The MACD of 0.52 indicates Negative momentum. The RSI at 64.08 is Neutral, neither overbought nor oversold. The STOCH value of 51.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EFN.
Element Fleet Management Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | C$13.38B | 20.11 | 24.23% | 1.58% | -6.98% | 11.17% | |
64 Neutral | C$2.19B | 21.62 | 8.72% | 5.21% | 7.92% | -14.19% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | C$6.85B | 9.37 | 34.23% | ― | 3.31% | -44.10% | |
58 Neutral | C$17.16B | 37.41 | 11.18% | 1.75% | -7.84% | -21.07% | |
55 Neutral | C$11.81B | 28.89 | 10.62% | 1.42% | 3.53% | -25.44% | |
55 Neutral | C$1.30B | 36.33 | 4.92% | 1.67% | -2.16% | -69.46% |
* Industrials Sector Average
TSE:EFN
Element Fleet Management
29.83
-5.05
-14.48%
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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.