Source Energy Services Ltd (SHLE) AI Stock Analysis

• Market Cap: C$182.86M
• Dividend Yield: N/A
• Average Volume (3M): 48.01K
• Price to Earnings (P/E): 5.9
• Beta (1Y): 1.40
• Revenue Growth: 18.29%
• EPS Growth: -94.32%
• Country: CA
• Employees: 512
• Sector: Energy
• Sector Strength: 76
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 1.74
• Shares Outstanding: 13,545,055
• 10 Day Avg. Volume: 77,997
• 30 Day Avg. Volume: 48,011
• PEG Ratio: 0.09
• Price to Book (P/B): 4.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.39
• 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$13.00
• Price Target Upside: -3.70% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: ―

Source Energy Services Ltd shows strong financial performance and strategic expansions, indicating a positive outlook. However, bearish technical indicators and the need for profitability enhancement moderate the overall score. The valuation appears fair, supporting the stock's medium-term potential.

Positive Factors

Financial Performance

SHLE has delivered significant returns to shareholders, with the company's stock rising more than 600% since 2022.

Market Position

SHLE occupies a dominant position in the WCSB proppant market, showcasing a new level of stability.

Negative Factors

Analyst Recommendation

Analyst is downgrading SHLE shares to Market Perform from Outperform in conjunction with the commodity price update.

Market Outlook

Expectations for slowing WCSB proppant growth into 2025 suggest that better options may lie elsewhere in the smallcap OFS sector.

Target Price

Target price for SHLE is lowered to $14 from $20, reflecting updated commodity price and EBITDA estimates.

Source Energy Services Ltd Business Overview & Revenue Model

Company Description

Source Energy Services Ltd. produces, supplies, and distributes Northern White frac sand used primarily in oil and gas exploration and production in Western Canada and the United States. It also provides storage and logistics services for other bulk oil and gas well completion materials; and develops wellsite mobile sand storage and handling system. The company was founded in 2017 and is headquartered in Calgary, Canada.

How the Company Makes Money

Source Energy Services Ltd generates revenue primarily through the sale of frac sand, a crucial component used in hydraulic fracturing to extract oil and gas. The company's key revenue streams include direct sales to oil and gas companies, long-term contracts with major energy producers, and spot market sales. Additionally, Source Energy Services capitalizes on its strategically located transloading terminals and logistical infrastructure, which enhance its distribution capabilities and reduce delivery times. Partnerships with transportation providers also play a significant role in optimizing its supply chain efficiency, contributing to its revenue generation.

Source Energy Services Ltd Financial Statement Overview

Summary

Source Energy Services Ltd demonstrates strong revenue growth and cash flow generation. However, declining net income and potential risks from capital expenditure fluctuations suggest careful monitoring. The financial outlook remains positive with strategic focus needed on profitability enhancement.

Income Statement

The company has shown strong revenue growth over the years, particularly with a substantial increase in total revenue from 2023 to 2024. The gross profit margin is healthy, reflecting efficient cost management relative to revenue. However, the net profit margin has decreased due to lower net income in 2024 compared to 2023, indicating potential challenges in controlling expenses or increased competition affecting profitability.

Balance Sheet

Source Energy Services Ltd has a moderate debt-to-equity ratio, which suggests a balanced approach to leveraging. The equity ratio indicates a stable financial structure, though it is slightly lower than ideal levels. The return on equity has decreased as net income declined, which could signal decreased effectiveness in using shareholder equity to generate profits.

Cash Flow

The cash flow statement shows a positive trend in free cash flow, with significant growth in 2024 compared to previous years. The company maintains a strong operating cash flow to net income ratio, indicating efficient cash management and a solid ability to convert income into cash. However, fluctuations in capital expenditures suggest potential variability in future cash flow stability.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
712.95M	673.95M	569.75M	415.91M	319.86M	249.88M
	Gross Profit
128.49M	127.34M	109.41M	58.15M	39.33M	24.66M
	EBIT
63.51M	65.29M	60.70M	17.48M	3.66M	-9.94M
	EBITDA
131.45M	102.69M	223.89M	55.76M	36.89M	-78.38M
	Net Income Common Stockholders
31.21M	9.51M	167.34M	-2.93M	-56.11M	-185.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
32.62M	32.72M	0.00	-68.42M	-38.44M	-42.33M
	Total Assets
588.90M	598.22M	482.83M	326.90M	266.03M	266.26M
	Total Debt
277.01M	274.87M	221.78M	244.94M	221.47M	189.61M
	Net Debt
244.39M	242.15M	221.78M	313.36M	259.90M	231.94M
	Total Liabilities
375.60M	408.35M	313.70M	321.24M	259.50M	233.57M
	Stockholders Equity
213.31M	189.87M	169.13M	5.66M	6.53M	32.69M
Cash Flow		Free Cash Flow
66.19M	51.06M	28.98M	65.01M	7.49M	35.69M
	Operating Cash Flow
112.29M	94.39M	51.09M	80.17M	14.01M	39.37M
	Investing Cash Flow
-32.15M	-27.06M	-13.20M	-13.90M	-6.00M	-4.96M
	Financing Cash Flow
-54.12M	-34.61M	-67.04M	-66.28M	-8.01M	-34.41M

Source Energy Services Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SHLE, the sentiment is Positive. The current price of 13.5 is above the 20-day moving average (MA) of 11.95, above the 50-day MA of 10.83, and above the 200-day MA of 12.60, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 71.70 is Negative, neither overbought nor oversold. The STOCH value of 90.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SHLE.

Source Energy Services Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TVK	77 Outperform	C$3.63B	40.50	23.78%	0.41%	32.25%	22.98%
SHLE	74 Outperform	C$182.86M	5.86	16.11%	―	18.29%	-94.32%
STEP	65 Neutral	C$289.79M	151.92	-3.90%	―	-5.98%	-121.37%
CFW	64 Neutral	C$292.02M	16.06	3.00%	―	-5.50%	-88.55%
Sector *	58 Neutral	$7.58B	3.26	-4.46%	10.01%	0.88%	-49.72%
SFD	41 Neutral	C$42.94M	―	5.45%	―	-69.97%	-56.55%
TOLWF		$603.67M	9.12	19.44%	4.22%	―	―

Source Energy Services Ltd Corporate Events

Source Energy Services to Release Q1 2025 Results and Hold Virtual AGM

Source Energy Services announced the release of its first quarter financial results for 2025, scheduled for May 8, with a subsequent conference call on May 9. Additionally, the company will hold its 2025 Annual General Meeting virtually on May 9, emphasizing shareholder engagement. These events are crucial for stakeholders to gain insights into the company’s financial health and strategic direction.

Spark’s Take on TSE:SHLE Stock

According to Spark, TipRanks’ AI Analyst, TSE:SHLE is a Outperform.

Source Energy Services Ltd shows strong financial performance with robust revenue growth and cash flow management. However, technical indicators suggest caution due to a potential downtrend. Valuation is reasonable, making it attractive to growth investors. Recent strategic expansions bolster future growth prospects, though declining net income remains a concern.

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

Source Energy Services Reports Strong 2024 Financial Results and Strategic Expansions

Source Energy Services Ltd. reported a successful financial year in 2024 with significant increases in sand sales volumes and revenue, achieving a total revenue of $674 million, a 16% rise from the previous year. The company improved its liquidity through refinancing and expanded its operations with new partnerships and acquisitions, enhancing its market position and operational capabilities.

Source Energy Services to Announce Q4 2024 Financial Results

Source Energy Services will release its fourth-quarter financial results for 2024 after the Toronto Stock Exchange closes on February 26, 2025, with a conference call scheduled the following morning. This announcement highlights Source’s commitment to transparency and engagement with stakeholders, potentially impacting investor confidence and market positioning.