tiprankstipranks
Trending News
More News >
Enerflex (TSE:EFX)
TSX:EFX
Advertisement

Enerflex (EFX) AI Stock Analysis

Compare
172 Followers

Top Page

TSE:EFX

Enerflex

(TSX:EFX)

Rating:74Outperform
Price Target:
C$14.50
▲(4.62% Upside)
Enerflex's overall stock score is driven by strong technical indicators and positive earnings call sentiment, reflecting operational efficiency and strategic growth. While financial performance shows stability, challenges in revenue and cash flow need addressing. The valuation suggests the stock is attractively priced, supporting a favorable investment outlook.
Positive Factors
Capital Allocation
With leverage now at the lower end of its target range, the company holds flexibility around capital allocation.
Financial Performance
EFX's results exceeded expectations driven by stable EI/AMS work and a strong jump in ES margins.
Negative Factors
Price Target
The price target is decreased to $16 from $20, mostly reflecting some additional macro uncertainty.

Enerflex (EFX) vs. iShares MSCI Canada ETF (EWC)

Enerflex Business Overview & Revenue Model

Company DescriptionEnerflex Ltd. supplies natural gas compression, oil and gas processing, refrigeration systems, energy transition solutions, and electric power generation equipment to the oil and natural gas industry. The company provides custom and standard compression packages for reciprocating and screw compressor applications; and designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, refrigeration systems, and electric power solutions, as well as engages in re-engineering, re-configuration, and re-packaging of compressors for various field applications; and modular processing equipment and waste gas systems for natural gas facilities. It also offers after-market services, parts distribution, operations and maintenance solutions, equipment optimization and maintenance programs, manufacturer warranties, exchange components, long-term service agreements, and technical services. In addition, the company rents natural gas compressors totaling approximately 800,000 horsepower. It serves small to large independent producers, integrated oil and natural gas companies, midstream and petrochemical companies, power generation companies, users of natural gas-fired electric power, and carbon capture players in Canada, the United States, Argentina, Bolivia, Brazil, Colombia, Mexico, the United Kingdom, Bahrain Kuwait, Oman, the United Arab Emirates, Australia, New Zealand, Indonesia, Malaysia, and Thailand. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.
How the Company Makes MoneyEnerflex makes money primarily through the sale and servicing of its energy infrastructure products and solutions. The company's revenue model includes equipment sales, where it designs and manufactures custom-engineered products for natural gas and oil applications. Additionally, Enerflex generates revenue through its aftermarket services, which include maintenance, repair, and operational support for its installed equipment base. These services often result in long-term contracts and recurring revenue streams. The company also engages in long-term lease agreements and rental arrangements for its equipment, providing flexibility and financial benefits to its clients. Enerflex's earnings are further supported by strategic partnerships and alliances with industry players, enabling it to expand its market reach and enhance its service offerings.

Enerflex Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Enerflex's strong financial performance, record-breaking adjusted EBITDA, and robust growth in key business segments such as Energy Infrastructure and U.S. Contract Compression. Despite challenges in free cash flow due to strategic investments, the company's operational efficiency and reduced SG&A expenses indicate a positive trajectory.
Q2-2025 Updates
Positive Updates
Record-Breaking Adjusted EBITDA
Enerflex achieved a quarterly record for adjusted EBITDA of $130 million in Q2 2025, up from $122 million in Q2 2024 and $113 million in Q1 2025.
Strong Performance in Energy Infrastructure
The Energy Infrastructure business contributed significantly to gross margins, with $86 million before depreciation and amortization, compared to $77 million in Q2 2024.
Robust U.S. Contract Compression Fleet Growth
The U.S. contract compression fleet utilization remained above 90% for 14 consecutive quarters, with expectations to increase from 456,000 horsepower to over 475,000 horsepower by the end of the year.
Healthy Engineered Systems Backlog
Maintained a healthy $1.2 billion backlog for Engineered Systems, with ES bookings of $365 million in Q2 2025, up from $331 million in Q2 2024.
Reduced SG&A Expenses
SG&A expenses were reduced to $61 million, down $14 million from the prior year, due to cost-saving initiatives and improved operational efficiencies.
Negative Updates
Free Cash Flow Challenges
Free cash flow was a use of $39 million in Q2 2025, compared to a use of $4 million in Q2 2024, due to increased growth capital spending and a build in net working capital.
Net Working Capital Impact
Net working capital was negatively impacted by an increase in accounts receivable and strategic inventory investments, affecting cash flow.
Company Guidance
During the Enerflex Second Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance for its performance and strategic direction. Enerflex reported a quarterly record for adjusted EBITDA, reaching $130 million, up from $122 million in Q2 2024, with consolidated revenues of $615 million. The Energy Infrastructure and After-Market Services lines contributed significantly, generating 65% of gross margin before depreciation and amortization. The Engineered Systems business maintained a $1.2 billion backlog and achieved ES bookings of $365 million in Q2 2025, showing a book-to-bill ratio of 1.1x. The U.S. contract compression fleet utilization remained above 90% for the past 14 quarters, with expectations to increase from 456,000 horsepower to over 475,000 by year-end. Enerflex's net debt was reported at $608 million, with a bank-adjusted net debt-to-EBITDA ratio of 1.3x, and the company announced plans to invest approximately $120 million in capital spending for 2025. Additionally, Enerflex returned $18 million to shareholders through dividends and share repurchases during the quarter.

Enerflex Financial Statement Overview

Summary
Enerflex demonstrates a stable financial position with improved profitability metrics and manageable debt levels. However, challenges in revenue growth and cash flow generation persist, as indicated by a decline in revenue and free cash flow.
Income Statement
65
Positive
Enerflex's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is stable at 20.9%, but the net profit margin is relatively low at 2.7%. Revenue has declined by 10.7% in the TTM, indicating challenges in maintaining growth. However, EBIT and EBITDA margins have improved compared to previous years, suggesting better operational efficiency.
Balance Sheet
70
Positive
The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 0.74, indicating manageable leverage. Return on equity has improved to 6.2% in the TTM, showing better profitability. The equity ratio remains healthy, suggesting a stable capital structure.
Cash Flow
60
Neutral
Cash flow analysis reveals a decline in free cash flow growth by 13.3% in the TTM, which is a concern. However, the operating cash flow to net income ratio is 0.40, indicating decent cash generation relative to net income. The free cash flow to net income ratio of 0.87 suggests that the company is generating sufficient cash relative to its earnings.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.88B2.41B3.16B1.78B960.16M1.22B
Gross Profit498.82M504.00M555.50M322.72M219.55M298.18M
EBITDA446.00M369.00M269.70M93.24M124.81M204.14M
Net Income129.00M32.00M-110.92M-100.94M-18.45M69.07M
Balance Sheet
Total Assets2.88B4.01B3.91B4.27B2.19B2.18B
Cash, Cash Equivalents and Short-Term Investments74.00M132.27M140.51M253.78M172.76M95.68M
Total Debt753.00M1.12B1.32B1.48B388.44M451.64M
Total Liabilities1.76B2.50B2.52B2.73B837.69M782.88M
Stockholders Equity1.13B1.51B1.39B1.54B1.35B1.40B
Cash Flow
Free Cash Flow261.89M341.12M185.00M-96.07M167.81M86.50M
Operating Cash Flow337.53M324.00M273.31M19.77M225.16M220.25M
Investing Cash Flow-71.00M-59.00M-158.89M43.25M-63.53M-137.76M
Financing Cash Flow-324.16M-263.00M-200.49M11.85M-83.89M-82.05M

Enerflex Technical Analysis

Technical Analysis Sentiment
Positive
Last Price13.86
Price Trends
50DMA
11.82
Positive
100DMA
10.78
Positive
200DMA
11.70
Positive
Market Momentum
MACD
0.65
Negative
RSI
74.25
Negative
STOCH
88.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EFX, the sentiment is Positive. The current price of 13.86 is above the 20-day moving average (MA) of 13.20, above the 50-day MA of 11.82, and above the 200-day MA of 11.70, indicating a bullish trend. The MACD of 0.65 indicates Negative momentum. The RSI at 74.25 is Negative, neither overbought nor oversold. The STOCH value of 88.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EFX.

Enerflex Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
C$1.74B9.8012.21%1.08%-0.41%
65
Neutral
$15.28B7.483.19%5.33%4.10%-60.58%
$395.59M14.628.24%2.54%
$1.32B10.3723.31%1.74%
79
Outperform
C$488.62M7.5911.66%2.89%14.74%62.76%
52
Neutral
C$291.17M29.531.53%-4.63%-92.13%
$913.02M11.0320.50%3.17%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:EFX
Enerflex
13.86
6.26
82.37%
NOA
North American Construction Group
13.37
-4.34
-24.51%
CESDF
CES Energy Solutions
5.97
0.73
13.93%
TSE:CFW
Calfrac Well Services
3.39
-0.51
-13.08%
TSE:TOT
Total Energy Services
13.15
4.15
46.11%
TOLWF
Trican Well Service
4.16
0.80
23.81%

Enerflex Corporate Events

Business Operations and StrategyFinancial Disclosures
Enerflex Achieves Record Q2 2025 EBITDA Amid Strong Market Positioning
Positive
Aug 7, 2025

Enerflex Ltd. reported a record adjusted EBITDA of $130 million for the second quarter of 2025, reflecting improved operational efficiencies and cost-saving initiatives. The company’s financial results show steady revenue growth, a strong backlog in engineered systems and energy infrastructure contracts, and a significant return on capital employed. Enerflex’s strategic investments in growth opportunities and its U.S. contract compression business, driven by rising natural gas production, underscore its robust market positioning and future revenue potential.

The most recent analyst rating on (TSE:EFX) stock is a Buy with a C$9.00 price target. To see the full list of analyst forecasts on Enerflex stock, see the TSE:EFX Stock Forecast page.

Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Enerflex Extends Credit Facility and Schedules Q2 Results Release
Positive
Jul 14, 2025

Enerflex Ltd. announced an extension of its revolving credit facility, maintaining an $800 million availability and extending the maturity date to July 2028, which enhances its liquidity and supports long-term growth and value creation for shareholders. The company will release its second-quarter financial results on August 7, 2025, with a conference call to follow, indicating a commitment to transparency and stakeholder engagement.

The most recent analyst rating on (TSE:EFX) stock is a Buy with a C$9.00 price target. To see the full list of analyst forecasts on Enerflex stock, see the TSE:EFX 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 20, 2025