Element Fleet Management (EFN) AI Stock Analysis

• Market Cap: $14.79B
• Dividend Yield: 1.4%
• Average Volume (3M): 591.78K
• Price to Earnings (P/E): 26.4
• Beta (1Y): 0.68
• Revenue Growth: 18.12%
• EPS Growth: 14.08%
• Country: CA
• Employees: 2,900
• Sector: Industrials
• Sector Strength: 84
• Industry: Rental & Leasing Services
• EPS (TTM): 0.41
• Shares Outstanding: 401,669,130
• 10 Day Avg. Volume: 648,595
• 30 Day Avg. Volume: 591,785
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.76
• Enterprise Value/Revenue: 12.64
• Enterprise Value/Gross Profit: 34.69
• Enterprise Value/Ebitda: 20.83
• 1Y Price Target: $41.11
• Price Target Upside: 11.82% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 74 Outperform
• Price Target: C$41.00 ▲(11.50% Upside)

Element Fleet Management's overall stock score is driven by strong earnings call performance and positive technical indicators. Financial performance is solid but hampered by high leverage and revenue decline. Valuation concerns due to a high P/E ratio slightly offset the positive outlook.

Positive Factors

Analyst recommendation

Analyst recommends a buy rating for Element Fleet Management Corp., indicating a positive outlook for the company's stock.

Diversification strategy

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

Revenue growth

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

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.

Origination volumes

Originations lower, at US$1.50B versus US$1.77B estimate, on seasonal factors including historically slower client order volume during summer months.

Revenue challenges

Lower finance revenue and syndication revenue, along with higher operating expenses, present challenges despite growth in other areas.

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 its fleet management services, which include leasing vehicles to corporate clients, providing fleet consultancy, and delivering a variety of fleet management solutions. Key revenue streams for the company include service fees for managing and maintaining client vehicle fleets, interest and fees from leasing arrangements, and sales from fleet-related products and services such as fuel cards and telematics systems. Element's significant partnerships with automotive manufacturers and service providers also play a crucial role in its earnings, allowing it to offer competitive pricing and comprehensive solutions to its clients.

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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.06B	2.21B	1.99B	1.96B	1.66B	1.77B
Gross Profit	751.38M	783.96M	748.70M	809.16M	666.94M	660.34M
EBITDA	1.25B	1.13B	1.01B	1.16B	988.67M	1.22B
Net Income	367.99M	387.14M	466.20M	409.64M	279.22M	225.14M
Balance Sheet
Total Assets	13.15B	12.70B	16.47B	14.33B	12.97B	14.99B
Cash, Cash Equivalents and Short-Term Investments	497.96M	128.84M	96.42M	68.88M	45.27M	8.79M
Total Debt	9.02B	8.45B	8.13B	9.02B	8.20B	10.00B
Total Liabilities	10.43B	9.93B	12.57B	10.65B	9.52B	11.21B
Stockholders Equity	2.72B	2.77B	3.90B	3.68B	3.45B	3.78B
Cash Flow
Free Cash Flow	171.71M	-184.17M	-1.05B	160.77M	2.43B	2.68B
Operating Cash Flow	351.63M	-107.16M	-970.88M	229.63M	2.51B	2.78B
Investing Cash Flow	-140.45M	-157.84M	-74.90M	-65.61M	-85.95M	-9.62M
Financing Cash Flow	11.37M	454.82M	1.38B	-7.59M	-2.39B	-2.83B

Element Fleet Management Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

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 36.77 is above the 20-day moving average (MA) of 35.91, above the 50-day MA of 34.19, and above the 200-day MA of 30.30, indicating a bullish trend. The MACD of 0.66 indicates Positive momentum. The RSI at 65.08 is Neutral, neither overbought nor oversold. The STOCH value of 84.38 is Negative, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EFN	74 Outperform	$14.79B	26.36	14.26%	1.40%	18.12%	14.08%
Sector *	59 Neutral	AU$1.62B	9.94	2.84%	3.53%	9.79%	5.94%
STN	―	$12.59B	45.44	13.13%	0.57%	―	―
TFII	―	$7.43B	20.58	13.80%	2.02%	―	―
SNCAF	―	$11.63B	55.37	8.66%	0.08%	―	―
FTT	76 Outperform	C$7.71B	16.42	18.07%	1.95%	2.36%	0.62%
BBU	―	$2.25B	2.67	-0.29%	1.00%	―	―

Element Fleet Management Corporate Events

Element Fleet Management Reports Record Q2 2025 Results Amid Economic Challenges

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.

Element Fleet Management Advances Sustainability with 2025 Report

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.