Enerflex (EFX) AI Stock Analysis

• Market Cap: C$1.27B
• Dividend Yield: 1.34%
• Average Volume (3M): 645.09K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 1.21
• Revenue Growth: 1.22%
• EPS Growth: N/A
• Country: CA
• Employees: 4,600
• Sector: Energy
• Sector Strength: 46
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.27
• Shares Outstanding: 123,523,530
• 10 Day Avg. Volume: 416,752
• 30 Day Avg. Volume: 645,086
• PEG Ratio: 0.52
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.92
• 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$14.02
• Price Target Upside: 37.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 71 Outperform
• Price Target: C$11.50 ▲(12.86%Upside)

Enerflex shows strength in cash flow management and operational efficiency, with a stable balance sheet. The technical indicators are favorable, and valuation metrics suggest the stock is attractively priced. Earnings call insights highlight operational strengths but also reveal revenue challenges and leadership transitions. Recent corporate actions, such as a share buyback, bolster shareholder value.

Positive Factors

Capital allocation

With leverage now at the lower end of its target range, the company holds flexibility around capital allocation.

Financial performance

Enerflex's results exceeded expectations driven by stable EI/AMS work and a strong jump in ES margins.

Negative Factors

Valuation

The price target is decreased to $16 from $20, mostly reflecting some additional macro uncertainty.

Enerflex Business Overview & Revenue Model

Company Description

Enerflex Ltd. (EFX) is a global leader in the energy sector, specializing in the provision of natural gas compression, oil and gas processing, refrigeration systems, and electric power equipment. The company operates in various segments, including engineered systems, service, and rental sectors, offering a comprehensive range of solutions that cater to the oil and gas production industry. Enerflex's core services extend to engineering, design, manufacturing, construction, and installation, providing its clients with full-cycle energy solutions.

How the Company Makes Money

Enerflex generates revenue primarily through the sale and rental of its engineered systems, which include natural gas compression and processing equipment. The company also earns income from its after-market services, which involve maintenance, repair, and overhaul services for energy infrastructure. Additionally, Enerflex's revenue streams are bolstered by long-term service contracts and rental agreements, which provide stable, recurring income. The company often collaborates with oil and gas producers, leveraging its expertise to deliver customized solutions that enhance operational efficiency. Significant partnerships and contracts with major energy companies further contribute to its financial performance, allowing Enerflex to maintain a strong presence in key international markets.

Enerflex Financial Statement Overview

Summary

Enerflex is navigating a challenging revenue environment with improved operational efficiency and robust cash flow management. The balance sheet remains healthy, albeit with moderate leverage. While profitability metrics show room for improvement, the company's ability to generate cash flows provides a positive outlook.

Income Statement

Enerflex has shown a resilient performance in the TTM with a positive gross profit margin of 19.3% and a net profit margin of 1.0%, indicating a slight profitability. However, there is a decline in total revenue from the previous year, which reflects a negative growth trajectory. EBIT and EBITDA margins have improved, showing efficient operations despite revenue pressures.

Balance Sheet

The company maintains a stable financial position with an equity ratio of 37.6%, indicating a balanced approach to financing its assets. However, the debt-to-equity ratio of 0.74 suggests moderate leverage. Enerflex's return on equity is relatively low at 2.6%, indicating underutilization of shareholder funds for generating profits.

Cash Flow

Enerflex exhibits strong cash flow management with a significant increase in free cash flow, leading to a robust free cash flow to net income ratio. The operating cash flow to net income ratio is healthy, supporting liquidity. The company has successfully turned around its cash flow from previous deficits.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.41B	3.16B	1.78B	960.16M	1.22B
	Gross Profit
504.00M	555.50M	322.72M	219.55M	298.18M
	EBIT
173.00M	162.34M	17.48M	54.29M	116.01M
	EBITDA
369.00M	269.70M	93.24M	124.81M	204.14M
	Net Income Common Stockholders
32.00M	-110.92M	-100.94M	-18.45M	69.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
92.00M	140.51M	253.78M	172.76M	95.68M
	Total Assets
2.79B	3.91B	4.27B	2.19B	2.18B
	Total Debt
777.00M	1.32B	1.48B	388.44M	451.64M
	Net Debt
685.00M	1.19B	1.23B	215.68M	355.96M
	Total Liabilities
1.74B	2.52B	2.73B	837.69M	782.88M
	Stockholders Equity
1.05B	1.39B	1.54B	1.35B	1.40B
Cash Flow		Free Cash Flow
306.00M	185.00M	-96.07M	167.81M	86.50M
	Operating Cash Flow
324.00M	273.31M	19.77M	225.16M	220.25M
	Investing Cash Flow
-59.00M	-158.89M	43.25M	-63.53M	-137.76M
	Financing Cash Flow
-263.00M	-200.49M	11.85M	-83.89M	-82.05M

Enerflex Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.19
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 10.19 is above the 20-day moving average (MA) of 9.82, above the 50-day MA of 9.74, and below the 200-day MA of 10.75, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 58.65 is Neutral, neither overbought nor oversold. The STOCH value of 80.05 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOT	79 Outperform	C$393.08M	6.30	11.38%	3.53%	11.02%	102.23%
CEU	76 Outperform	C$1.47B	8.44	23.66%	1.96%	8.79%	31.76%
TCW	75 Outperform	C$833.65M	8.63	19.44%	4.08%	2.15%	-5.97%
EFX	71 Outperform	C$1.27B	12.35	7.03%	1.34%	1.22%	―
NOA	66 Neutral	$712.23M	16.77	9.52%	1.79%	19.57%	-26.98%
CFW	62 Neutral	C$307.48M	16.06	3.00%	―	-5.50%	-88.55%
Sector *	57 Neutral	$7.22B	3.11	-4.49%	5.63%	0.82%	-49.15%

Enerflex Corporate Events

Enerflex Ltd. Reports Strong Q1 2025 Financial Results with Improved Margins and Reduced Debt

Enerflex Ltd. reported its first quarter 2025 financial results, highlighting an adjusted EBITDA of $113 million and a free cash flow of $85 million. The company experienced a reduction in revenue compared to the previous year due to changes in contract accounting, but saw improvements in gross margin and return on capital employed. Enerflex’s contract backlog remains strong, providing operational visibility, and the company continues to benefit from its U.S. contract compression business driven by increased natural gas production. The company also reduced its net debt significantly, improving its financial stability.

Enerflex Ltd. Announces Successful Election of Directors and Approval of Executive Compensation

Enerflex Ltd. announced the successful election of all eight nominee directors at its virtual Annual Meeting of Shareholders, with significant approval rates. Additionally, the company’s non-binding advisory vote on executive compensation was overwhelmingly approved, reflecting strong shareholder support for the company’s leadership and strategic direction.

Enerflex Seeks New Director and Prepares for Q1 Results Release

Enerflex Ltd. has announced its intention to search for a new independent director as part of its commitment to good corporate governance. The company also aims to achieve at least 30% gender diversity on its Board by the 2026 annual meeting. Additionally, Enerflex plans to release its first-quarter financial results for 2025 on May 8, 2025, which will be followed by a conference call for stakeholders to discuss the results, indicating an ongoing effort to maintain transparency and engage with investors.

Enerflex Announces Leadership Change and Reaffirms 2025 Outlook

Enerflex Ltd. announced a leadership transition with Marc Rossiter stepping down as President, CEO, and Director, and Preet Dhindsa named as Interim CEO. The company reaffirms its 2025 outlook and plans to expand direct shareholder returns, including a 50% increase in quarterly dividends and a new issuer bid. Enerflex continues to focus on enhancing profitability, leveraging its market position, and investing in growth opportunities, while maintaining a disciplined capital program.

Enerflex Announces Share Buyback Program to Boost Shareholder Value

Enerflex Ltd. has announced its intention to implement a Normal Course Issuer Bid (NCIB) to repurchase up to 5% of its public float over the next twelve months, subject to approval by the Toronto Stock Exchange. This move is part of Enerflex’s strategy to enhance shareholder returns, following a recent 50% increase in its quarterly dividend, and reflects the company’s belief that its current market share price does not fully represent its underlying value.