North American Construction Group (NOA) AI Stock Analysis

• Market Cap: C$593.81M
• Dividend Yield: 2.56%
• Average Volume (3M): 89.14K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 1.39
• Revenue Growth: 8.24%
• EPS Growth: -36.88%
• Country: CA
• Employees: 1,825
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.56
• Shares Outstanding: 28,575,990
• 10 Day Avg. Volume: 124,867
• 30 Day Avg. Volume: 89,144
• PEG Ratio: -0.52
• Price to Book (P/B): 2.14
• Price to Sales (P/S): 0.71
• P/FCF Ratio: -12.45
• 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$26.17
• Price Target Upside: 25.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: C$23.00 ▲(10.68% Upside)

The overall stock score of 63 reflects a balanced view of North American Construction Group's financial performance, technical analysis, and valuation. The company's steady revenue growth and operational efficiency are offset by declining profit margins and high leverage. The technical indicators suggest a bearish trend, while the valuation metrics indicate the stock is fairly valued with a decent dividend yield. Addressing profitability and leverage issues could enhance the company's financial position.

Positive Factors

Long-term contract revenue stability

NOA's reliance on long-term contracts creates predictable revenue streams and reduces project timing volatility. This durable contract mix improves backlog visibility, supports steady utilization of heavy equipment, and aids multi-year planning and capital allocation across oil sands cycles.

Strong core operating margins

A 24.26% TTM EBITDA margin indicates structural operational efficiency in heavy civil and mining services. Sustained high core margins provide a buffer against commodity-linked pricing swings, help fund equipment replacement cycles, and support competitive bidding on large, long-duration projects.

Niche market position and partnerships

NOA's focus on oil sands plus significant partnerships with major producers entrenches it as a preferred contractor. Specialized earthworks capabilities and repeat-client relationships create barriers to entry, improving win rates and supporting a stable pipeline of multi-year projects.

Negative Factors

High financial leverage

A debt-to-equity ratio near 2.0 signals substantial leverage for a capital-intensive contractor, increasing interest expense and reducing financial flexibility. High leverage limits the firm's ability to absorb project delays, invest in equipment, or pursue opportunistic bids without raising refinancing or covenant risk.

Declining profit margins

Material declines in gross and net margins point to sustained cost pressure or weakening pricing power on contracts. Persistent margin erosion reduces retained cash, compresses ROE, and leaves less room to absorb cost overruns on large projects, harming long-term earnings durability.

Weak free cash flow conversion

Severely negative FCF growth and poor FCF/net income indicate earnings aren't converting to cash. This limits capacity to fund capex, pay dividends, or reduce debt organically, increasing reliance on external financing—vulnerable in cyclical oil sands markets and capital cycles.

North American Construction Group Business Overview & Revenue Model

Company Description

North American Construction Group Ltd. provides equipment maintenance, and mining and heavy construction services in Canada, the United States, and Australia. The company's Heavy Construction & Mining division offers constructability reviews, budgetary cost estimates, design-build construction, project management, contract mining, pre-stripping/pit pioneering, overburden removal and stockpile, muskeg removal and stockpile, site preparation, air strip construction, site dewatering/perimeter ditching, tailings and process pipelines, haulage and access road construction, tailings dam construction and densification, mechanically stabilized earth walls, dyke construction, and reclamation services. Its Equipment Maintenance Services division provides fuel and lube servicing, portable steaming, equipment inspections, parts and component supply, major overhauls and equipment refurbishment, onsite haul truck brake testing, onsite maintenance support, under carriage rebuild, machining, hose manufacturing, and technical support services, as well as welding, fabrication/repairs, weld certification, and inspection services. As of December 31, 2021, the company operated a heavy equipment fleet of 632 units. It serves resource development and industrial construction sectors. The company was formerly known as North American Energy Partners Inc. and changed its name to North American Construction Group Ltd. in April 2018. North American Construction Group Ltd. was founded in 1953 and is headquartered in Acheson, Canada.

How the Company Makes Money

North American Construction Group generates revenue through several key streams, primarily by securing contracts for large-scale construction and mining projects. The company earns money by providing comprehensive services that encompass project management, equipment leasing, and labor services to clients in the oil sands industry. Additionally, NOA often engages in long-term contracts, which provide a stable revenue base. Significant partnerships with major oil and gas companies enhance its market position and lead to consistent project opportunities. Furthermore, the company's focus on efficiency and cost management helps optimize profit margins on its contracts.

North American Construction Group Financial Statement Overview

Summary

North American Construction Group demonstrates steady revenue growth and operational efficiency, as evidenced by its EBITDA margin. However, declining profit margins and high leverage present potential risks. The negative free cash flow trend is a significant concern, highlighting the need for improved cash management. Overall, the company shows resilience in a challenging industry but must address profitability and leverage issues to strengthen its financial position.

Income Statement

North American Construction Group shows a steady revenue growth trend with a TTM (Trailing-Twelve-Months) revenue increase of 2.42%. However, the gross profit margin has decreased from 18.02% in 2024 to 14.42% in the TTM, indicating rising costs or pricing pressures. The net profit margin also declined from 3.78% to 2.80% over the same period. Despite these challenges, the company maintains a solid EBITDA margin of 24.26% in the TTM, suggesting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is high at 1.92 in the TTM, indicating significant leverage, which could pose risks if not managed properly. Return on equity has decreased from 11.34% in 2024 to 8.25% in the TTM, reflecting reduced profitability. However, the equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

The cash flow statement reveals a concerning trend with negative free cash flow growth of -87.13% in the TTM. The operating cash flow to net income ratio is 0.67, indicating moderate cash generation relative to net income. The negative free cash flow to net income ratio of -0.18 suggests challenges in converting earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.28B	1.17B	957.22M	769.54M	654.14M	500.37M
Gross Profit	165.44M	210.05M	154.22M	101.55M	90.42M	94.38M
EBITDA	318.43M	283.06M	252.59M	227.18M	186.74M	160.35M
Net Income	38.52M	44.09M	63.14M	67.37M	51.41M	49.21M
Balance Sheet
Total Assets	1.34B	1.69B	1.55B	979.51M	869.28M	838.93M
Cash, Cash Equivalents and Short-Term Investments	72.98M	77.88M	88.61M	69.14M	16.60M	43.91M
Total Debt	653.98M	825.10M	717.05M	435.39M	395.23M	446.18M
Total Liabilities	1.01B	1.31B	1.19B	673.59M	590.82M	590.49M
Stockholders Equity	338.24M	388.90M	356.65M	305.92M	278.46M	248.44M
Cash Flow
Free Cash Flow	-6.04M	-66.74M	66.90M	53.94M	51.39M	29.70M
Operating Cash Flow	306.46M	217.61M	270.39M	169.20M	165.18M	147.27M
Investing Cash Flow	-307.23M	-274.68M	-244.88M	-97.47M	-99.27M	-113.57M
Financing Cash Flow	22.77M	45.98M	-7.75M	-19.49M	-92.76M	4.67M

North American Construction Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NOA, the sentiment is Positive. The current price of 20.78 is below the 20-day moving average (MA) of 21.05, above the 50-day MA of 20.15, and above the 200-day MA of 20.66, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 55.41 is Neutral, neither overbought nor oversold. The STOCH value of 54.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NOA.

North American Construction Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCW	78 Outperform	C$1.55B	12.80	18.06%	3.57%	9.24%	6.35%
TOT	78 Outperform	C$616.17M	10.28	10.51%	2.57%	15.58%	47.55%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
CFW	65 Neutral	C$500.44M	22.25	3.20%	―	-8.13%	-28.00%
E	64 Neutral	C$106.92M	27.14	5.09%	―	-7.13%	-60.41%
NOA	63 Neutral	C$593.81M	15.48	8.81%	2.56%	8.24%	-36.88%

North American Construction Group Corporate Events

North American Construction Group Secures $125 Million in Additional Notes

North American Construction Group Ltd. has closed a private placement offering of an additional $125 million in Senior Unsecured Notes, bringing the total to $350 million. The proceeds will be used to repay existing debt and for general corporate purposes, potentially enhancing the company’s financial flexibility and market position.

The most recent analyst rating on (TSE:NOA) stock is a Hold with a C$22.00 price target. To see the full list of analyst forecasts on North American Construction Group stock, see the TSE:NOA Stock Forecast page.