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Major Drilling (TSE:MDI)
:MDI
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Major Drilling
(TSX:MDI)
Rating:71Outperform
Price Target:
C$9.50
▲(8.82% Upside)
Major Drilling (MDI) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$718.15M
Dividend YieldN/A
Average Volume (3M)85.84K
Price to Earnings (P/E)27.6
Beta (1Y)1.38
Revenue Growth2.96%
EPS Growth-50.61%
CountryCA
Employees2,500
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.01
Shares Outstanding81,887,590
10 Day Avg. Volume89,563
30 Day Avg. Volume85,843
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$9.50Price Target Upside8.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Major Drilling Business Overview & Revenue Model
Company DescriptionMajor Drilling Group International Inc. provides contract drilling services for mining and mineral exploration companies. The company offers a suite of drilling services, including surface and underground coring, directional, reverse circulation, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive, longhole drilling, surface drill and blast, and related mining services. The company was founded in 1980 and is based in Moncton, Canada with additional offices in Mexico, South America, Asia, Africa, USA, and Australia.
How the Company Makes MoneyMajor Drilling makes money primarily through providing specialized drilling services to mining companies engaged in mineral exploration and development. The company's revenue model is based on contracts with clients for drilling projects, which can range from short-term assignments to long-term exploration programs. Key revenue streams include fees for drilling services, equipment rentals, and related support services. Major Drilling's earnings are significantly influenced by the global demand for minerals, commodity prices, and the level of exploration activity in the mining sector. Additionally, strategic partnerships with mining companies and the expansion of operations into emerging markets contribute to its revenue generation.
Major Drilling Earnings Call Summary
Earnings Call Date:Jun 11, 2025
(Q4-2025)
| % Change Since: 1.75%|
Next Earnings Date:Sep 09, 2025
Earnings Call Sentiment Positive
While the company faced challenges with decreased margins, lower net earnings, and issues in junior exploration, significant achievements such as record safety statistics, successful acquisitions, and robust revenue growth suggest a positive outlook. The anticipated increase in activity levels and revenue for the next quarter further supports an optimistic sentiment.Q4-2025 Updates
Positive Updates
Record-Breaking Safety Statistics
Major Drilling set a new safety record with a total recordable incident frequency rate of 0.74 for fiscal year 2025, demonstrating a strong safety culture.
Successful Acquisition of Explomin
The company completed the acquisition of Explomin, increasing its presence in South and Central America with operations in Peru, Colombia, and the Dominican Republic.
Revenue Growth
Fourth quarter revenue was $187.5 million, an increase of 11.6% from the previous year, driven by strength in the South and Central American regions.
Increased Activity Levels and Positive Outlook
The company expects a 20% revenue increase in the first quarter of 2026 compared to the fourth quarter of 2025, with improved margins as mobilization continues.
Strong Demand for Specialized Services
Specialized work accounted for 60% of total revenue, with high demand expected to continue due to the complexity of future deposits.
Negative Updates
Decreased Gross Margin
The adjusted gross margin percentage decreased to 22.8% from 26.9% in the same period last year, primarily due to increased start-up, training, and mobilization costs.
Lower Net Earnings
Net earnings for the quarter were $1 million or $0.01 per share, down from $9.9 million or $0.12 per share in the prior year period.
Challenges in Junior Exploration
Junior activity was impacted by a lack of access to capital, contributing only 8% of revenue in the fourth quarter.
Increased G&A Costs
General and administrative costs rose to $20.9 million, an increase of $3.5 million compared to the same quarter last year, due to the Explomin acquisition and inflationary wage adjustments.
Company Guidance
During the fourth quarter of fiscal 2025, Major Drilling experienced a notable increase in revenue, which rose by 11.6% to $187.5 million compared to the same period last year, despite challenges such as delayed mobilization and start-up costs. The company's total recordable incident frequency rate improved to 0.74, marking a new safety record, and the acquisition of Explomin bolstered their presence in South and Central America. However, the adjusted gross margin percentage dropped to 22.8% from 26.9% due to increased costs. General and administrative expenses rose to $20.9 million, and EBITDA decreased to $20.5 million, leading to net earnings of $1 million or $0.01 per share. The company ended the quarter with $3.9 million in net debt, with available liquidity of $123 million. Looking forward to fiscal 2026, Major Drilling anticipates a 20% revenue increase in the first quarter, supported by expanded exploration budgets from senior mining companies and an expected $70 million in capital expenditures to modernize their fleet.Major Drilling Financial Statement Overview
Summary
Major Drilling's financial health is solid but with cautionary signs. Revenue has grown, yet profit margins have compressed, likely due to increased costs or competitive pressures. The balance sheet is robust with low leverage, while cash flow management is effective; however, declining free cash flow may signal future liquidity concerns.Income Statement
The income statement reveals moderate performance with a declining trend in gross profit margin from 21.6% in 2024 to 17.9% in 2025. The net profit margin decreased from 7.5% to 3.6% over the same period. Despite revenue growth from 2024 to 2025, margins have compressed. The EBIT and EBITDA margins also show contraction, indicating potential operational challenges.75
Positive
Balance Sheet
The balance sheet remains strong with a low debt-to-equity ratio, rising from 0.01 in 2024 to 0.07 in 2025, reflecting prudent financial management. The equity ratio decreased slightly from 80.6% to 72.7%, while return on equity fell from 10.7% to 5.0%, indicating reduced profitability on equity.80
Positive
Cash Flow
Cash flow analysis shows a decline in free cash flow from 38.5M in 2024 to 28.4M in 2025, indicating potential strain on cash generation. The operating cash flow to net income ratio improved, signaling efficient cash management despite reduced net income.70
Positive
| Breakdown | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 727.58M | 706.69M | 735.74M | 650.41M | 432.08M |
| Gross Profit | 130.54M | 152.72M | 176.90M | 139.77M | 64.09M |
| EBITDA | 102.54M | 125.22M | 145.05M | 114.09M | 52.05M |
| Net Income | 25.95M | 53.09M | 74.92M | 53.46M | 10.03M |
Balance Sheet | |||||
| Total Assets | 718.74M | 612.18M | 611.68M | 557.08M | 388.53M |
| Cash, Cash Equivalents and Short-Term Investments | 45.99M | 96.22M | 94.43M | 71.26M | 22.36M |
| Total Debt | 37.13M | 4.72M | 25.55M | 55.39M | 19.21M |
| Total Liabilities | 196.64M | 118.35M | 159.11M | 197.32M | 108.37M |
| Stockholders Equity | 522.10M | 493.83M | 452.58M | 359.76M | 280.16M |
Cash Flow | |||||
| Free Cash Flow | 28.39M | 38.50M | 54.50M | 44.93M | 3.15M |
| Operating Cash Flow | 100.92M | 112.03M | 113.19M | 94.87M | 34.45M |
| Investing Cash Flow | -178.03M | -78.39M | -63.98M | -85.84M | -29.38M |
| Financing Cash Flow | 25.92M | -32.52M | -29.61M | 38.25M | -37.23M |
Major Drilling Technical Analysis
Neutral
8.73
Price Trends
8.83
Negative
8.45
Positive
8.50
Positive
Market Momentum
0.01
Positive
43.60
Neutral
14.39
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MDI, the sentiment is Neutral. The current price of 8.73 is below the 20-day moving average (MA) of 9.00, below the 50-day MA of 8.83, and above the 200-day MA of 8.50, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 43.60 is Neutral, neither overbought nor oversold. The STOCH value of 14.39 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:MDI.
Major Drilling Peers Comparison
Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | C$177.81M | 9.76 | 10.72% | ― | 27.28% | ― | |
73 Outperform | C$58.25M | 9.04 | 9.73% | ― | 2.55% | ― | |
71 Outperform | C$718.15M | 27.55 | 5.11% | ― | 2.96% | -50.61% | |
66 Neutral | C$157.81M | 5.98 | 21.84% | 3.75% | -19.84% | -34.63% | |
44 Neutral | C$864.63M | -6.77 | -14.90% | 2.78% | 16.54% | -27.01% |
* Basic Materials Sector Average
Performance Comparison
TSE:MDI
Major Drilling
8.77
-0.23
-2.56%
TSE:FAR
Foraco International
1.60
-0.73
-31.33%
TSE:GEO
Geodrill
3.77
1.47
63.91%
TSE:OGD
Orbit Garant Drill
1.55
0.99
176.79%
Major Drilling Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Major Drilling Reports Strong Fiscal 2025 Results Amid Industry Growth
Positive
Jun 11, 2025
Major Drilling reported a revenue increase to $727.6 million for fiscal year 2025, driven by heightened activity and strategic acquisitions like Explomin, enhancing its South American presence. Despite facing challenges such as tariff-related economic uncertainties and increased startup costs, the company anticipates a strong fiscal 2026, supported by larger exploration budgets from senior customers and a robust safety record, positioning itself well amidst rising gold and copper prices.
The most recent analyst rating on (TSE:MDI) stock is a Buy with a C$15.00 price target. To see the full list of analyst forecasts on Major Drilling stock, see the TSE:MDI 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.