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PHX Energy Services (TSE:PHX)
TSX:PHX

PHX Energy Services (PHX) AI Stock Analysis

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PHX Energy Services

(TSX:PHX)

Rating:81Outperform
Price Target:
C$9.50
▲(16.14%Upside)
PHX Energy Services scores well due to strong financial performance, attractive valuation, and positive corporate events. The company's consistent revenue growth and solid profitability are complemented by a low P/E ratio and high dividend yield, indicating undervaluation. Technical analysis supports a positive outlook, with the corporate events reinforcing investor confidence and strategic direction.
Positive Factors
Market Position
Given its differentiated technology offering, solid market share, strong dividend yield, and inexpensive valuation, the shares are deserving.
Revenue Growth
U.S. Revenue of $132 million was up ~13% quarter over quarter, delivering the strongest Q4 in PHX's history.
Shareholder Returns
The company plans to return ~70% of excess free cash flow to shareholders, which represents one of the highest levels in our coverage group.
Negative Factors
Corporate Strategy
PHX continues to focus on increased RSS work, which garners higher day rates.
Revenue Segmentation
In Canada, revenue increased 7% year-over-year to $46 million, a Q4 high for the segment since 2014.

PHX Energy Services (PHX) vs. iShares MSCI Canada ETF (EWC)

PHX Energy Services Business Overview & Revenue Model

Company DescriptionPHX Energy Services Corp. (PHX) is a leading provider of directional drilling technology and services, predominantly operating in the oil and natural gas sectors. The company specializes in offering high-performance drilling solutions, including advanced measurement while drilling (MWD) and logging while drilling (LWD) technologies, to optimize drilling efficiency and accuracy. PHX Energy Services is committed to delivering innovative tools and services that enhance the drilling process, reduce operational risks, and improve resource extraction outcomes for its clients across North America and internationally.
How the Company Makes MoneyPHX Energy Services generates revenue primarily through the provision of directional drilling services and the sale or rental of its specialized drilling technologies and equipment. The company earns money by contracting its services to oil and gas exploration and production companies, who require precise and efficient drilling solutions to access hydrocarbon reserves. PHX Energy Services' revenue streams are driven by the demand for drilling activities, which is influenced by factors such as oil and gas prices, exploration budgets, and industry activity levels. Additionally, the company may engage in partnerships or collaborations with other technology providers or service companies to enhance its service offerings and market reach, thereby contributing to its revenue.

PHX Energy Services Financial Statement Overview

Summary
PHX Energy Services demonstrates strong financial performance with consistent revenue growth and profitability. The income statement reflects efficient cost management despite some challenges in operational efficiency. The balance sheet is stable with favorable leverage, and cash flow generation is robust.
Income Statement
82
Very Positive
PHX Energy Services shows strong income statement metrics, with a solid gross profit margin and net profit margin reflecting efficient cost management. Revenue has consistently increased, demonstrating robust growth. However, a decline in EBIT and EBITDA margins in recent periods indicates potential challenges in maintaining operational efficiency.
Balance Sheet
76
Positive
The company's balance sheet is stable, with a favorable debt-to-equity ratio indicating manageable leverage. Return on Equity (ROE) is strong, suggesting effective use of equity to generate profits. However, the equity ratio has shown slight fluctuations, which could indicate potential volatility in asset management.
Cash Flow
79
Positive
Cash flow metrics are healthy, with a positive trend in free cash flow growth, supported by consistent operating cash flow. The operating cash flow to net income ratio is strong, reflecting effective cash conversion. However, fluctuations in free cash flow to net income ratios suggest potential variability in cash generation.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue687.24M659.66M656.34M535.74M349.92M233.73M
Gross Profit127.70M124.49M150.10M109.64M71.65M32.04M
EBITDA122.28M123.05M150.08M72.88M58.69M26.97M
Net Income57.33M54.62M98.58M44.31M22.72M-6.88M
Balance Sheet
Total Assets450.04M423.29M385.49M375.22M262.49M216.54M
Cash, Cash Equivalents and Short-Term Investments13.97M14.16M16.43M18.25M24.83M25.75M
Total Debt60.65M52.18M44.77M62.41M35.87M39.10M
Total Liabilities216.46M201.08M175.53M198.35M128.06M84.51M
Stockholders Equity233.58M222.21M209.97M176.88M134.43M132.03M
Cash Flow
Free Cash Flow12.45M11.39M31.11M-37.70M8.27M42.23M
Operating Cash Flow96.65M96.90M96.72M37.08M45.43M67.91M
Investing Cash Flow-54.84M-49.16M-20.26M-47.39M-23.63M-19.10M
Financing Cash Flow-42.05M-51.11M-77.95M2.71M-22.72M-33.65M

PHX Energy Services Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.18
Price Trends
50DMA
7.97
Positive
100DMA
8.08
Positive
200DMA
8.50
Negative
Market Momentum
MACD
0.06
Positive
RSI
58.20
Neutral
STOCH
43.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PHX, the sentiment is Positive. The current price of 8.18 is below the 20-day moving average (MA) of 8.30, above the 50-day MA of 7.97, and below the 200-day MA of 8.50, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 58.20 is Neutral, neither overbought nor oversold. The STOCH value of 43.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PHX.

PHX Energy Services Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSPHX
81
Outperform
C$371.86M6.5625.15%9.78%4.69%-34.62%
TSACX
80
Outperform
C$151.75M2.9424.63%-5.05%147.92%
73
Outperform
C$93.81M4.9911.11%2.57%63.53%
TSCFW
69
Neutral
C$304.91M16.153.00%-5.50%-88.55%
67
Neutral
$14.94B9.786.38%5.19%4.13%-66.99%
TSESI
62
Neutral
C$408.19M14.37-1.17%-2.85%-144.20%
TSWRG
54
Neutral
C$76.65M-2.16%6.43%35.87%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:PHX
PHX Energy Services
8.37
0.11
1.33%
TSE:ESI
Ensign Energy Services
2.21
0.00
0.00%
TSE:WRG
Western Energy Services
2.14
-0.51
-19.25%
TSE:AKT.A
AKITA Drilling Ltd
2.29
0.98
74.81%
TSE:CFW
Calfrac Well Services
3.42
-0.83
-19.53%
TSE:ACX
Cathedral Energy Services
4.63
-2.07
-30.90%

PHX Energy Services Corporate Events

Dividends
PHX Energy Services Declares Quarterly Dividend
Positive
Jun 13, 2025

PHX Energy Services Corp. has announced a quarterly cash dividend of $0.20 per common share, payable on July 15, 2025, to shareholders of record as of June 30, 2025. This announcement underscores the company’s financial health and commitment to delivering shareholder value, reinforcing its position in the oil and natural gas services industry.

The most recent analyst rating on (TSE:PHX) stock is a Buy with a C$12.00 price target. To see the full list of analyst forecasts on PHX Energy Services stock, see the TSE:PHX Stock Forecast page.

Executive/Board ChangesShareholder Meetings
PHX Energy Announces Successful Election of Directors at Annual Meeting
Positive
May 8, 2025

PHX Energy Services Corp. announced the successful election of seven directors at its annual shareholders’ meeting on May 7, 2025. The election results reflect strong shareholder support for the nominees, which is indicative of confidence in the company’s strategic direction and leadership. This development is likely to reinforce PHX Energy’s market position as a leader in drilling technology and services, potentially benefiting stakeholders through sustained growth and innovation.

DividendsBusiness Operations and StrategyFinancial Disclosures
PHX Energy Services Achieves Record Revenue and Strong Profitability in Q1 2025
Positive
May 6, 2025

PHX Energy Services reported record revenue of $193.7 million for the first quarter of 2025, marking a 17% increase from the previous year. The company’s profitability was driven by growth in high-margin RSS and motor rental revenue streams, particularly in the US and Canada. The US division achieved a record quarterly revenue of $136.1 million, while the Canadian division reported its highest quarterly revenue since 2014. The company declared a dividend of $0.20 per share and announced a $10 million increase in its capital expenditure budget, aiming to expand its RSS fleet and Real Time RSS Communications technology.

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.Date of analysis: Jul 03, 2025