Kelso Technologies (KLS) AI Stock Analysis

• Market Cap: C$9.12M
• Dividend Yield: N/A
• Average Volume (3M): 40.38K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.39
• Revenue Growth: 3.66%
• EPS Growth: -33.71%
• Country: CA
• Employees: 40
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): <0.01
• Shares Outstanding: 55,300,083
• 10 Day Avg. Volume: 62,023
• 30 Day Avg. Volume: 40,380
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 0.48
• P/FCF Ratio: -12.61
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: C$0.18 ▼(-9.50% Downside)
• Action: Reiterated Date: 01/04/26
• Date: Action: Reiterated 01/04/26

The score is primarily held back by ongoing losses and only marginally positive operating cash flow, despite improving revenue and positive TTM free cash flow. A conservative balance sheet helps reduce risk, while technical indicators are mostly neutral and valuation remains constrained by negative earnings and no dividend.

Positive Factors

Revenue Growth

TTM revenue growth of ~12.3% signals sustained demand recovery versus recent flat-to-down trends. For a niche industrial/rail supplier, expanding top-line over multiple quarters supports operational leverage, strengthens order visibility from long-term contracts and underpins medium-term scaling opportunities.

Gross Margin Stability

Consistent gross margins in the low-to-mid 40% range indicate durable product economics and pricing power in specialized rail fittings. Stable gross margins provide a structural cushion to absorb input cost swings and are a prerequisite for converting revenue gains into eventual operating profitability.

Conservative Balance Sheet

Near-zero debt reduces financial risk and preserves strategic optionality for capex, R&D or acquisitions without refinancing pressure. A conservative balance sheet supports resilience through cyclical downturns in rail demand and gives management flexibility to invest in growth or weather temporary cash flow variability.

Negative Factors

Negative Net Margin

A persistent TTM net margin near -19% shows the company has not yet translated gross profit into sustainable bottom-line earnings. Structural negative profitability impairs reinvestment capacity, hinders return generation for shareholders and increases reliance on external funding or cost fixes to reach break-even.

Weak Operating Cash Flow

Operating cash flow that is only marginally positive and historically volatile suggests core operations may not consistently generate cash. Reliance on working-capital timing or one-off items to produce free cash flow raises execution risk and makes funding day-to-day operations and investment plans less predictable.

Negative Return on Equity

Negative ROE across periods indicates the business currently destroys shareholder capital rather than creating it. This reflects weak earnings power relative to equity base and implies that until margins or turnover improve materially, shareholder returns will remain constrained despite a healthy balance sheet.

Kelso Technologies Business Overview & Revenue Model

Company Description

Kelso Technologies Inc. develops, produces, and distributes proprietary equipment used in transportation applications in the United States and Canada. The company offers railway equipment, such as bottom outlet, pressure relief, vacuum relief, and check valves, as well as one-bolt manways, pressure cars, pressure differential parts, tank gauges, laboratory test equipment, and wheel cleaners; emergency response kits; and fueling valves. It also provides trucking components, including one-bolt manways and pressure/vacuum safety valves for tank trailers; and suspension systems for fleet vehicles to access wilderness worksites. The company was formerly known as Kelso Resources Ltd. and changed its name to Kelso Technologies Inc. in July 1994. Kelso Technologies Inc. was incorporated in 1987 and is headquartered in Surrey, Canada.

How the Company Makes Money

Kelso Technologies generates revenue through the sale of its proprietary products and solutions, primarily targeting the rail industry. The company's main revenue streams include the manufacturing and distribution of tank car fittings, safety valves, and other rail-related equipment. Kelso also benefits from long-term contracts and partnerships with major rail operators and manufacturers, which provide a steady flow of orders. Additionally, the company explores opportunities in new markets and sectors, enhancing its revenue potential through diversification and strategic collaborations. By focusing on innovation and safety standards, Kelso positions itself to capitalize on regulatory requirements and the growing demand for safer transportation solutions.

Kelso Technologies Financial Statement Overview

Summary

Revenue improved (TTM +12.3%) and gross margin remains steady in the low-to-mid 40% range, supported by very low leverage. However, profitability is still the key drag (TTM net margin about -19%) and operating cash flow is only slightly positive, despite better TTM free cash flow.

Income Statement

TTM (Trailing-Twelve-Months) revenue grew 12.3% to ~$12.3M, showing demand recovery versus the flat-to-down trend seen in 2023–2024. Gross margin has been relatively steady in the low-to-mid 40% range, which is a positive. However, profitability remains the key weakness: net income is still meaningfully negative in TTM (about -19% net margin), and operating profitability is also negative, indicating the business has not yet translated gross profit into sustainable bottom-line results.

Balance Sheet

Leverage is very low (debt-to-equity near zero in TTM), which reduces financial risk and provides balance-sheet flexibility. Equity remains positive and sizable relative to total assets, supporting solvency. The main concern is return on equity, which is negative across periods (including TTM), reflecting ongoing losses and weak earnings power rather than balance-sheet stress.

Cash Flow

Cash generation has improved: TTM free cash flow is positive (~$0.8M) and sharply higher versus the prior year, a constructive shift after multiple years of negative free cash flow. That said, operating cash flow in TTM is only slightly positive (~$0.02M) and has been negative in several recent annual periods, suggesting cash flow strength may be influenced by working-capital timing or other non-recurring factors. Continued consistency in operating cash flow is the key swing factor to watch.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.22M	10.68M	10.82M	10.93M	7.43M	11.15M
Gross Profit	4.74M	4.69M	4.58M	4.91M	3.20M	4.79M
EBITDA	461.64K	-686.72K	-543.43K	-118.54K	-1.56M	-88.35K
Net Income	-2.35M	-4.62M	-2.10M	-1.36M	-2.76M	-1.31M
Balance Sheet
Total Assets	6.52M	6.57M	9.70M	12.15M	13.73M	12.02M
Cash, Cash Equivalents and Short-Term Investments	835.10K	153.15K	1.43M	2.71M	3.38M	1.05M
Total Debt	88.54K	115.90K	16.64K	146.72K	287.71K	149.25K
Total Liabilities	1.62M	2.34M	983.02K	1.37M	1.67M	1.06M
Stockholders Equity	4.90M	4.23M	8.72M	10.78M	12.06M	10.96M
Cash Flow
Free Cash Flow	794.73K	-405.16K	-1.12M	-588.43K	-2.25M	-3.28M
Operating Cash Flow	22.63K	-393.88K	-275.25K	314.41K	-1.82M	-1.56M
Investing Cash Flow	145.72K	-751.04K	-846.83K	-875.50K	-401.29K	-1.71M
Financing Cash Flow	-86.52K	-138.72K	-155.37K	-135.58K	4.54M	-93.71K

Kelso Technologies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KLS, the sentiment is Negative. The current price of 0.2 is above the 20-day moving average (MA) of 0.18, above the 50-day MA of 0.19, and above the 200-day MA of 0.18, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 39.57 is Neutral, neither overbought nor oversold. The STOCH value of 19.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:KLS.

Kelso Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNR	77 Outperform	C$94.47B	20.23	22.24%	2.62%	0.23%	-13.22%
DXT	73 Outperform	C$812.61M	20.40	14.38%	3.02%	-0.73%	221.74%
SIS	72 Outperform	C$1.81B	29.21	10.22%	2.35%	3.93%	33.44%
CP	70 Outperform	C$109.76B	26.45	8.88%	0.82%	4.02%	21.39%
WJX	69 Neutral	C$690.41M	14.75	8.84%	5.09%	3.71%	-12.70%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KLS	51 Neutral	C$9.12M	-2.79	11.91%	―	3.66%	-33.71%

Kelso Technologies Corporate Events

Kelso Technologies Reports Third Consecutive Profitable Quarter Amid Strategic Diversification

Kelso Technologies Inc. reported its third consecutive profitable quarter with a net income of $182,851 for Q3-2025, marking an 11.3% increase in gross revenue year-over-year. The company’s growth was driven by deferred orders and cost management, despite challenges in new tank car constructions due to tariff uncertainties. Kelso is diversifying into related sectors to support growth with minimal capital investment, while also securing an increased line of credit to enhance financial flexibility.