North American Construction Group (NOA) AI Stock Analysis

• Market Cap: C$517.80M
• Dividend Yield: 2.65%
• Average Volume (3M): 180.02K
• Price to Earnings (P/E): 13.5
• Beta (1Y): 1.44
• 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: 211,403
• 30 Day Avg. Volume: 180,023
• 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$24.32
• Price Target Upside: 34.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: C$20.50 ▲(13.13% 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

Revenue Growth

The increase in Q3 revenue indicates strong demand for NOA's services, suggesting a positive trend in market position and potential for sustained growth.

Market Position

NOA's leadership in the oil sands sector provides a competitive advantage, ensuring steady contract flow and reinforcing its market position.

Operational Efficiency

A strong EBITDA margin reflects operational efficiency, allowing NOA to maintain profitability despite industry challenges and cost pressures.

Negative Factors

Declining Profit Margins

The declining profit margins indicate rising costs or pricing pressures, which could impact long-term profitability if not addressed.

High Leverage

Significant leverage poses financial risks, potentially limiting NOA's ability to invest in growth opportunities or weather economic downturns.

Negative Free Cash Flow

The negative free cash flow trend highlights challenges in cash generation, which could strain financial flexibility and impact future investments.

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 solid revenue growth and operational efficiency. However, high leverage and negative free cash flow pose potential risks. The company should focus on improving cash flow management and reducing debt to enhance financial stability.

Income Statement

The company has shown consistent revenue growth with a TTM increase of 3.66%. However, the gross profit margin has slightly decreased to 16.09% from 18.02% in the previous year. Net profit margin is stable at 3.21%, but lower than historical figures. EBIT and EBITDA margins are healthy at 9.02% and 24.68% respectively, indicating efficient operations.

Balance Sheet

The debt-to-equity ratio has improved to 1.79 from 2.12, reflecting better leverage management. However, it remains relatively high, indicating potential risk. Return on equity is moderate at 9.59%, showing decent profitability. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Operating cash flow remains strong, but free cash flow is negative, indicating potential liquidity issues. The operating cash flow to net income ratio is 0.65, suggesting adequate cash generation relative to net income. However, the negative free cash flow growth rate of -12.13% is concerning.

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: Negative
• Last Price: 18.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 18.12 is below the 20-day moving average (MA) of 19.39, below the 50-day MA of 19.81, and below the 200-day MA of 20.87, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 35.12 is Neutral, neither overbought nor oversold. The STOCH value of 40.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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$1.19B	9.82	18.06%	3.74%	9.24%	6.35%
TOT	78 Outperform	C$564.86M	9.42	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$345.16M	15.13	3.20%	―	-8.13%	-28.00%
E	64 Neutral	C$113.25M	30.48	5.09%	―	-7.13%	-60.41%
NOA	63 Neutral	C$517.80M	13.49	8.81%	2.65%	8.24%	-36.88%
STEP	56 Neutral	C$400.15M	-49.68	-1.94%	―	-9.19%	-119.27%

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.

North American Construction Group to Announce Q3 2025 Financial Results

North American Construction Group Ltd. announced it will release its third-quarter financial results for 2025 on November 12, followed by a conference call and webcast on November 13. This announcement may impact stakeholders by providing insights into the company’s financial health and operational performance, potentially influencing market perceptions and investment decisions.

North American Construction Group Expands Debt Offering with $125 Million Notes

North American Construction Group Ltd. announced a private placement offering of an additional $125 million in senior unsecured notes, adding to the $225 million issued earlier this year. The proceeds will be used to repay existing debt and for general corporate purposes, potentially strengthening the company’s financial position and operational flexibility.