North American Construction Group (NOA) AI Stock Analysis

• Market Cap: $650.13M
• Dividend Yield: 2.98%
• Average Volume (3M): 54.80K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.84
• Revenue Growth: 19.57%
• EPS Growth: -26.98%
• Country: CA
• Employees: 1,825
• Sector: Energy
• Sector Strength: 51
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.21
• Shares Outstanding: 29,430,960
• 10 Day Avg. Volume: 62,004
• 30 Day Avg. Volume: 54,804
• PEG Ratio: 0.25
• Price to Book (P/B): 2.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.40
• 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: $35.04
• Price Target Upside: 58.63% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 67 Neutral
• Price Target: C$25.00 ▲(13.17%Upside)

The overall stock score reflects robust financial performance and positive corporate developments. However, technical indicators and rising debt present risks. The company's strategic initiatives and consistent revenue growth are significant positives, balancing concerns about financial leverage and operational challenges.

Positive Factors

Contract Extensions

Recent contract extensions and wins provide greater visibility for 2025 results.

Growth Potential

Recent acquisition of Australia-based MacKellar Group further improves NOA's growth potential through its diversification into metals/mining and other earthwork construction projects.

Valuation

NOA's inexpensive valuation is appreciated, particularly in light of stabilizing Canadian operations and upside to Australia.

Negative Factors

Joint Venture Performance

Results from Nuna continue to lag, although stronger work from Fargo-Moorhead is helping overall JV results.

Margin Decrease

Margins decreased by approximately 120 basis points to 28%.

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 contracts with major clients in the oil sands, mining, and infrastructure sectors. The company offers a diverse set of services, from earthworks and civil construction to mine management and maintenance. NOA's key revenue streams include long-term service agreements and project-based contracts, which are often aligned with the capital expenditure cycles of its clients. Additionally, strategic partnerships and alliances with major resource companies enable NOA to secure a stable flow of projects and maintain a strong market presence. The company's fleet of specialized equipment, along with its skilled workforce, allows it to undertake large-scale projects efficiently, contributing to its profitability. Furthermore, NOA may engage in joint ventures or partnerships that enhance its capabilities and market reach, thereby playing a crucial role in its revenue generation.

North American Construction Group Financial Statement Overview

Summary

North American Construction Group shows robust revenue growth and operational efficiency; however, the declining net profit margins and rising debt levels pose concerns. The company must manage its debt and capital expenditures to improve free cash flow and enhance financial stability.

Income Statement

The company demonstrates strong revenue growth with a significant increase from $500.37M in 2020 to $1.17B in 2024. The gross profit margin has remained relatively stable, reflecting efficient cost management. However, net profit margin has been inconsistent, with a decrease from 10.6% in 2020 to 3.8% in 2024. This indicates challenges in converting revenue into net income despite revenue growth.

Balance Sheet

The balance sheet highlights a high debt-to-equity ratio, increasing from 1.74 in 2020 to 2.12 in 2024, suggesting a reliance on debt financing. Return on equity has decreased from 19.8% in 2020 to 11.3% in 2024, indicating declining efficiency in generating returns on equity. The equity ratio has improved, reflecting a better capital structure over the years.

Cash Flow

Operating cash flow remains strong, though free cash flow has turned negative in 2024, indicating increased capital expenditures. The operating cash flow to net income ratio is robust, but the free cash flow to net income ratio has deteriorated, highlighting potential liquidity pressures.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.17B	957.22M	769.54M	654.14M	500.37M
Gross Profit	210.05M	154.22M	101.55M	90.42M	94.38M
EBITDA	270.76M	228.69M	191.06M	149.81M	160.35M
Net Income	44.09M	63.14M	67.37M	51.41M	49.21M
Balance Sheet
Total Assets	1.69B	1.55B	979.51M	869.28M	838.93M
Cash, Cash Equivalents and Short-Term Investments	77.88M	88.61M	69.14M	16.60M	43.91M
Total Debt	825.10M	717.05M	435.39M	395.23M	446.18M
Total Liabilities	1.31B	1.19B	673.59M	590.82M	590.49M
Stockholders Equity	388.90M	356.65M	305.92M	278.46M	248.44M
Cash Flow
Free Cash Flow	-66.74M	66.90M	53.94M	51.39M	29.70M
Operating Cash Flow	217.61M	270.39M	169.20M	165.18M	147.27M
Investing Cash Flow	-274.68M	-244.88M	-97.47M	-99.27M	-113.57M
Financing Cash Flow	45.98M	-7.75M	-19.49M	-92.76M	4.67M

North American Construction Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.09
• 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:NOA, the sentiment is Negative. The current price of 22.09 is below the 20-day moving average (MA) of 23.84, below the 50-day MA of 22.92, and below the 200-day MA of 25.30, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 36.57 is Neutral, neither overbought nor oversold. The STOCH value of 11.75 is Positive, 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
PSI	77 Outperform	C$959.06M	13.49	14.68%	4.25%	12.43%	-44.90%
EFX	71 Outperform	C$1.32B	12.89	7.03%	1.40%	1.22%	―
NOA	67 Neutral	$650.13M	15.31	9.52%	2.98%	19.57%	-26.98%
CFW	64 Neutral	C$292.02M	16.06	3.00%	―	-5.50%	-88.55%
Sector *	44 Neutral	AU$1.36B	-6.68	-23.02%	6.85%	5.33%	-26.92%
SFD	41 Neutral	C$59.55M	―	5.45%	―	-69.97%	-56.55%
TOLWF		$587.37M	8.76	19.44%	4.39%	―	―

North American Construction Group Corporate Events

North American Construction Group Reports Strong Q1 2025 Results Amid Weather Challenges

North American Construction Group Ltd. reported its second-highest quarterly revenue in company history for Q1 2025, driven by increased equipment utilization in Canada and expanded capacity in Australia. Despite challenges from severe weather conditions, the company remains optimistic about stable conditions for the rest of the year and continues to pursue opportunities in the heavy civil infrastructure and mining sectors.

The most recent analyst rating on (TSE:NOA) stock is a Hold with a C$30.00 price target. To see the full list of analyst forecasts on North American Construction Group stock, see the TSE:NOA Stock Forecast page.

NACG Closes $225 Million Private Placement to Strengthen Financial Position

North American Construction Group Ltd. has successfully closed a private placement offering of $225 million in Senior Unsecured Notes, which will be used to repay existing debt and for general corporate purposes. This strategic financial move is expected to strengthen the company’s financial position and support its ongoing operations in the heavy civil construction and mining services industry.