PHX Energy Services (PHX) AI Stock Analysis

• Market Cap: C$343.12M
• Dividend Yield: 10.65%
• Average Volume (3M): 79.80K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.98
• Revenue Growth: 0.51%
• EPS Growth: -40.79%
• Country: CA
• Employees: 924
• Sector: Energy
• Sector Strength: 44
• Industry: Oil & Gas Drilling
• EPS (TTM): 0.44
• Shares Outstanding: 45,506,770
• 10 Day Avg. Volume: 53,455
• 30 Day Avg. Volume: 79,798
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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$11.00
• Price Target Upside: 45.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

PHX Energy Services has a solid financial foundation with consistent revenue growth and a stable balance sheet. Valuation metrics indicate the stock is attractively priced with a high dividend yield. Technical analysis points to bearish trends, which are a concern but may offer a buying opportunity given the low valuation. Recent corporate events are positive but don't drastically affect the short-term outlook.

Positive Factors

Financial Performance

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 the coverage group.

Technology and Innovation

PHX holds many redeeming qualities, including its strong balance sheet, technology focus, and new product build-out.

Negative Factors

Valuation Concerns

Despite the positive outlook, there may be concerns about the company's technology focus and product build-out impacting valuation.

PHX Energy Services Business Overview & Revenue Model

Company Description

PHX 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 Money

PHX 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 health with consistent revenue and profit growth. The balance sheet is stable, with manageable leverage and effective equity use. Cash flows are generally positive, though recent capital expenditures have impacted free cash flow. The company presents a positive financial trajectory, with some areas requiring monitoring to ensure continued stability and growth.

Income Statement

PHX Energy Services has shown consistent revenue growth over the years, with a notable increase in total revenue from 2020 to 2024. The gross profit margin has remained healthy, although it slightly decreased in 2024 compared to 2023. The net profit margin experienced a drop in 2024 due to reduced net income, but overall profitability remains strong. EBITDA margins are solid, indicating efficient operations, though EBIT margin in 2024 was affected by zero EBIT. Despite some fluctuations, the company exhibits robust revenue and profit growth trends.

Balance Sheet

The company's debt-to-equity ratio is moderate, suggesting manageable leverage levels. Return on equity (ROE) has been strong, reflecting effective use of shareholders' equity, though it decreased in 2024 due to lower net income. The equity ratio indicates a stable financial structure with a good proportion of equity in total assets. While the balance sheet is generally strong, a slight increase in total debt in 2024 warrants monitoring.

Cash Flow

PHX Energy Services has maintained positive operating cash flows, with free cash flow showing a significant drop in 2024 due to higher capital expenditures. The operating cash flow to net income ratio is robust, indicating good cash generation relative to earnings. However, the decline in free cash flow growth in 2024 suggests potential issues in sustaining cash reserves for future investments. Overall, cash flow management is effective but warrants attention to capital spending impacts.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
659.66M	656.34M	535.74M	349.92M	233.73M
	Gross Profit
124.49M	150.10M	109.64M	71.65M	32.04M
	EBIT
0.00	75.98M	37.53M	20.99M	3.24M
	EBITDA
121.10M	150.08M	72.88M	58.69M	26.97M
	Net Income Common Stockholders
54.62M	98.58M	44.31M	22.72M	-6.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.16M	16.43M	18.25M	24.83M	25.75M
	Total Assets
423.29M	385.49M	375.22M	262.49M	216.54M
	Total Debt
52.18M	44.77M	62.41M	35.87M	39.10M
	Net Debt
38.02M	28.34M	44.16M	11.04M	13.35M
	Total Liabilities
201.08M	175.53M	198.35M	128.06M	84.51M
	Stockholders Equity
222.21M	209.97M	176.88M	134.43M	132.03M
Cash Flow		Free Cash Flow
11.39M	31.11M	-37.70M	8.27M	42.23M
	Operating Cash Flow
96.90M	96.72M	37.08M	45.43M	67.91M
	Investing Cash Flow
-49.16M	-20.26M	-47.39M	-23.63M	-19.10M
	Financing Cash Flow
-51.11M	-77.95M	2.71M	-22.72M	-33.65M

PHX Energy Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PHX, the sentiment is Negative. The current price of 7.54 is below the 20-day moving average (MA) of 7.66, below the 50-day MA of 8.22, and below the 200-day MA of 8.92, indicating a bearish trend. The MACD of -0.19 indicates Negative momentum. The RSI at 41.50 is Neutral, neither overbought nor oversold. The STOCH value of 21.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PHX.

PHX Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHX	71 Outperform	C$343.12M	6.43	25.28%	10.65%	0.51%	-40.79%
AKT.A	64 Neutral	C$65.38M	5.03	7.86%	―	-14.26%	-30.29%
Sector *	56 Neutral	$6.93B	3.42	-4.86%	5.94%	-0.08%	-48.18%
CFW	55 Neutral	C$287.73M	27.64	1.34%	―	-15.92%	-94.84%
WRG	54 Neutral	C$71.92M	―	-2.16%	―	6.43%	35.87%
ESI	53 Neutral	C$336.97M	14.37	-1.55%	―	-6.00%	-150.20%

PHX Energy Services Corporate Events

PHX Energy Services Achieves Record Revenue and Strong Profitability in Q1 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.

Spark’s Take on TSE:PHX Stock

According to Spark, TipRanks’ AI Analyst, TSE:PHX is a Neutral.

PHX Energy Services demonstrates robust financial performance and attractive valuation metrics, which are significant strengths. However, technical analysis points to a bearish trend, which tempers the overall score. The recent corporate events, while positive, do not substantially alter the stock’s immediate outlook.

To see Spark’s full report on TSE:PHX stock, click here.

PHX Energy Services Declares Quarterly Dividend

PHX Energy Services Corp. has announced a quarterly cash dividend of $0.20 per common share, payable on April 15, 2025, to shareholders of record as of March 31, 2025. This announcement reflects the company’s ongoing commitment to providing value to its shareholders and underscores its stable financial position within the oil and natural gas services industry.

PHX Energy Reports Record Revenue Amid Profitability Challenges

PHX Energy Services announced record-breaking revenue for the fourth quarter and the entire year, with consolidated revenue reaching $178.7 million. Despite the revenue growth, the company’s profitability declined due to increased equipment repair expenses and lower gains from the sale of drilling equipment. The US division contributed significantly to the revenue, while the Canadian division saw its highest fourth-quarter revenue since 2014.

PHX Energy Services Announces Leadership Transition and Executive Promotions

PHX Energy Services announced a leadership transition with founder and CEO John Hooks becoming the Executive Board Chair, while President Michael Buker will succeed him as CEO. This succession is part of a long-term plan to ensure continuity and focus on strategic growth, with Mr. Buker expected to continue driving operational success and shareholder rewards. Additionally, key executive promotions were made to support the company’s operational and technological development.