Source Energy Services Ltd (SHLE) AI Stock Analysis

• Market Cap: C$215.81M
• Dividend Yield: N/A
• Average Volume (3M): 27.52K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 1.86
• Revenue Growth: -0.39%
• EPS Growth: -86.01%
• Country: CA
• Employees: 512
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): -0.46
• Shares Outstanding: 13,135,155
• 10 Day Avg. Volume: 38,581
• 30 Day Avg. Volume: 27,520
• PEG Ratio: -0.25
• Price to Book (P/B): 1.16
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 4.31
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: C$19.00 ▲(24.51% Upside)

The score is driven primarily by improving financial performance led by strong operating cash flow/free cash flow, tempered by leverage and soft recent revenue. Technicals are supportive with price above major moving averages and positive momentum. Valuation is favorable on a low P/E, while the latest earnings call was cautious due to sharp Q3 volume/EBITDA declines despite management expecting a Q4 rebound and longer-term LNG-linked growth.

Positive Factors

Revenue Growth

The company's substantial revenue growth and increased sand sales volumes indicate strong market demand and effective business operations, enhancing long-term growth prospects.

Strategic Expansions

Strategic expansions through partnerships and acquisitions strengthen market position and operational capabilities, supporting sustained competitive advantage.

Cash Flow Management

Strong cash flow management reflects efficient operations and financial health, providing the company with flexibility to invest in growth opportunities.

Negative Factors

Declining Net Income

Decreasing net income could hinder profitability and affect the company's ability to reinvest in its business, posing challenges to long-term financial stability.

Net Profit Margin Decline

A declining net profit margin indicates potential challenges in cost control or increased competition, which may impact future profitability and market competitiveness.

Capital Expenditure Variability

Variability in capital expenditures may lead to inconsistent cash flow, affecting the company's ability to sustain investments and manage financial obligations effectively.

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	680.75M	673.95M	569.75M	415.91M	319.86M	249.88M
Gross Profit	118.55M	127.34M	109.41M	58.15M	39.33M	24.66M
EBITDA	122.73M	102.69M	223.89M	55.76M	36.89M	-78.38M
Net Income	23.73M	9.51M	167.34M	-2.93M	-56.11M	-185.47M
Balance Sheet
Total Assets	597.89M	598.22M	482.83M	326.90M	266.03M	266.26M
Cash, Cash Equivalents and Short-Term Investments	30.39M	32.72M	0.00	-68.42M	-38.44M	-42.33M
Total Debt	285.28M	274.87M	221.78M	244.94M	221.47M	189.61M
Total Liabilities	387.55M	408.35M	313.70M	321.24M	259.50M	233.57M
Stockholders Equity	210.34M	189.87M	169.13M	5.66M	6.53M	32.69M
Cash Flow
Free Cash Flow	67.94M	51.06M	28.98M	65.01M	7.49M	35.69M
Operating Cash Flow	130.93M	94.39M	51.09M	80.17M	14.01M	39.37M
Investing Cash Flow	-58.84M	-27.06M	-13.20M	-13.90M	-6.00M	-4.96M
Financing Cash Flow	-42.04M	-34.61M	-67.04M	-66.28M	-8.01M	-34.41M

Source Energy Services Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.26
• 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 15.26 is below the 20-day moving average (MA) of 15.34, above the 50-day MA of 13.54, and above the 200-day MA of 12.59, indicating a bullish trend. The MACD of 0.74 indicates Negative momentum. The RSI at 73.71 is Negative, neither overbought nor oversold. The STOCH value of 92.56 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
EFX	80 Outperform	C$2.58B	14.76	12.48%	0.74%	5.92%	―
TCW	78 Outperform	C$1.28B	10.76	18.06%	3.57%	9.24%	6.35%
TOT	78 Outperform	C$571.55M	9.80	10.51%	2.57%	15.58%	47.55%
CEU	75 Outperform	$2.65B	16.23	22.50%	1.29%	5.79%	-5.08%
SHLE	70 Outperform	C$215.81M	9.77	11.94%	―	-0.39%	-86.01%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
CFW	65 Neutral	C$437.14M	20.12	3.20%	―	-8.13%	-28.00%

Source Energy Services Ltd Corporate Events

Source Energy Services Faces Revenue Decline Amidst Market Challenges in Q3 2025

Source Energy Services Ltd. reported a challenging third quarter in 2025 due to lower activity levels and weak commodity prices, particularly affecting natural gas. This resulted in a significant decrease in sand sales volumes and total revenue, which fell by 32% compared to the same period last year. Despite these challenges, the company managed to secure sand processing assets for future expansion and reduced its term loan balance, indicating strategic moves to strengthen its market position.

The most recent analyst rating on (TSE:SHLE) stock is a Hold with a C$15.00 price target. To see the full list of analyst forecasts on Source Energy Services Ltd stock, see the TSE:SHLE Stock Forecast page.