STEP Energy Services (STEP) AI Stock Analysis

• Market Cap: C$399.37M
• Dividend Yield: N/A
• Average Volume (3M): 40.59K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.20
• Revenue Growth: -9.19%
• EPS Growth: -119.27%
• Country: CA
• Employees: 1,251
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.09
• Shares Outstanding: 72,876,900
• 10 Day Avg. Volume: 20,203
• 30 Day Avg. Volume: 40,585
• PEG Ratio: -1.82
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.32
• P/FCF Ratio: 5.98
• 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$5.50
• Price Target Upside: 0.55% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: C$5.50 ▲(0.55% Upside)

STEP Energy Services' overall stock score is primarily influenced by its financial performance and technical analysis. The company shows resilience in cash management and a strong equity base, but faces significant challenges with declining revenues and profitability. The technical indicators suggest a bullish trend, which is a positive sign. However, the negative P/E ratio and lack of dividend yield weigh heavily on the valuation score, reflecting potential overvaluation and financial instability.

Positive Factors

Cash Flow Growth

Strong cash flow growth indicates effective cash management, providing the company with the ability to reinvest in operations and manage debt.

Leverage Position

Improved leverage position reduces financial risk and enhances the company's ability to withstand economic downturns.

Equity Base

A strong equity base provides financial stability and supports long-term growth by enabling investment in strategic initiatives.

Negative Factors

Revenue Decline

Significant revenue decline challenges the company's ability to sustain operations and invest in growth, impacting long-term viability.

Profitability Issues

Negative profitability indicates operational inefficiencies and challenges in maintaining competitive pricing, affecting long-term financial health.

Return on Equity

Negative return on equity reflects poor shareholder returns and highlights the need for improved operational performance and strategic focus.

STEP Energy Services Business Overview & Revenue Model

Company Description

STEP Energy Services Ltd., an oilfield service company, provides integrated coiled tubing, fracturing, and wireline solutions to service the oil and gas industry in Canada and the United States. It also provides chemical laboratory solutions; fluid pumping services for coiled tubing operations and standalone projects; and nitrogen pumping solutions for coiled tubing and hydraulic fracturing operations, as well as cased hole wireline and open hole wireline services. STEP Energy Services Ltd. was incorporated in 2011 and is headquartered in Calgary, Canada.

How the Company Makes Money

STEP Energy Services generates revenue primarily through its core service offerings, which include pressure pumping and coiled tubing services. The company's revenue model is based on contracts with exploration and production companies, where it charges fees for its services based on the volume and scope of work performed. Key revenue streams consist of hydraulic fracturing services, which are critical for enhancing oil and gas extraction, and coiled tubing services that support maintenance and drilling operations. Additionally, STEP often enters into long-term contracts with major clients, ensuring a steady stream of income. Strategic partnerships within the energy sector, as well as a focus on operational efficiency and technological advancements, contribute significantly to its profitability.

STEP Energy Services Financial Statement Overview

Summary

STEP Energy Services faces challenges with declining revenues and profitability, as reflected in the negative net profit margin and revenue growth rate. However, the company has managed to improve its leverage position and maintain positive cash flow growth, indicating resilience in cash management. The balance sheet shows a strong equity base, but the negative return on equity highlights the need for improved profitability.

Income Statement

STEP Energy Services has experienced a significant decline in revenue growth, with a TTM revenue decrease of 35.8%. The gross profit margin has also decreased to 9.36% from 11.54% in the previous year. The net profit margin has turned negative at -1.64%, indicating a loss. Despite these challenges, the company maintains a positive EBITDA margin of 10.98%, suggesting some operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.29, reflecting a reduction in leverage compared to previous years. However, the return on equity is negative at -3.92%, indicating challenges in generating returns for shareholders. The equity ratio stands at 63.69%, showing a solid equity base relative to total assets.

Cash Flow

STEP Energy Services has shown a positive free cash flow growth rate of 13.58% in the TTM period. The operating cash flow to net income ratio is strong at 0.63, indicating robust cash generation relative to net income. The free cash flow to net income ratio is 0.33, suggesting effective cash management despite net income losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	939.19M	954.97M	945.72M	989.02M	536.31M	368.94M
Gross Profit	84.50M	110.19M	116.14M	147.59M	17.76M	-33.41M
EBITDA	96.05M	129.35M	162.18M	221.38M	54.55M	-43.48M
Net Income	-20.06M	1.76M	50.42M	94.78M	-28.13M	-119.36M
Balance Sheet
Total Assets	613.52M	580.63M	606.52M	682.53M	483.85M	479.86M
Cash, Cash Equivalents and Short-Term Investments	3.23M	4.36M	1.78M	2.79M	3.70M	1.27M
Total Debt	69.37M	84.47M	113.63M	164.48M	205.33M	220.35M
Total Liabilities	222.82M	210.11M	250.97M	376.50M	306.41M	275.28M
Stockholders Equity	390.70M	370.53M	355.55M	306.03M	177.44M	204.58M
Cash Flow
Free Cash Flow	45.64M	51.72M	66.43M	39.62M	21.60M	28.98M
Operating Cash Flow	112.65M	146.06M	171.61M	122.60M	58.85M	46.80M
Investing Cash Flow	-67.62M	-92.57M	-108.98M	-66.44M	-30.71M	-16.55M
Financing Cash Flow	-44.64M	-50.98M	-63.90M	-57.77M	-25.67M	-36.50M

STEP Energy Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:STEP, the sentiment is Positive. The current price of 5.47 is below the 20-day moving average (MA) of 5.47, above the 50-day MA of 5.37, and above the 200-day MA of 4.48, indicating a bullish trend. The MACD of 0.04 indicates Positive momentum. The RSI at 65.10 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:STEP.

STEP Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCW	80 Outperform	$1.22B	10.06	18.06%	3.80%	9.24%	6.35%
SHLE	74 Outperform	C$162.67M	4.13	11.94%	―	-0.39%	-86.01%
TOT	69 Neutral	C$537.71M	8.97	10.51%	2.70%	15.58%	47.55%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
CFW	61 Neutral	C$269.69M	27.35	3.20%	―	-8.13%	-28.00%
HWO	60 Neutral	$10.54M	0.40	-0.80%	―	-75.46%	-100.66%
STEP	58 Neutral	C$399.37M	-19.59	-1.94%	―	-9.19%	-119.27%

STEP Energy Services Corporate Events

STEP Energy Services Reports Improved Net Income Despite Revenue Decline in Q3 2025

STEP Energy Services Ltd. reported a decrease in consolidated revenue for the third quarter of 2025, with $227.2 million compared to $256.0 million in the same period of 2024. Despite the revenue decline, the company achieved a net income of $6.8 million, a significant improvement from a net loss of $5.5 million in the previous year. This performance reflects the company’s operational adjustments and cost management efforts, which have positively impacted its financial outcomes.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$5.50 price target. To see the full list of analyst forecasts on STEP Energy Services stock, see the TSE:STEP Stock Forecast page.

STEP Energy Services Initiates Shareholder Meeting for Arrangement Approval

STEP Energy Services Ltd. has announced the commencement of sending and filing a circular for a special meeting of shareholders to approve a plan of arrangement. Shareholders will receive $5.50 per share in cash, representing a significant premium over recent trading prices. The arrangement involves ARC Energy Fund 8 and 2659160 Alberta Ltd., with the transaction aiming to enhance shareholder value. Due to potential mail disruptions, the company has adopted a notice and access model for delivering meeting materials electronically.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$5.50 price target. To see the full list of analyst forecasts on STEP Energy Services stock, see the TSE:STEP Stock Forecast page.

STEP Energy Services to Go Private in $5.50 Per Share Deal with ARC Financial

STEP Energy Services Ltd. has entered into a definitive agreement with ARC Financial Corp. to take the company private in an all-cash transaction valued at $5.50 per share. This arrangement, unanimously approved by STEP’s board, represents a 29% premium over the company’s previous closing price and is expected to close in December 2025. The transaction highlights significant support from minority shareholders and does not require ARC to obtain financing, indicating a strategic move to maximize shareholder value.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$5.50 price target. To see the full list of analyst forecasts on STEP Energy Services stock, see the TSE:STEP Stock Forecast page.

STEP Energy Services Receives Acquisition Offer from ARC Financial

STEP Energy Services Ltd. has received a non-binding offer from ARC Financial Corp. to acquire the remaining common shares not already owned by ARC for $5.50 per share. A special committee of independent directors has been formed to review the offer, with financial and legal advisors engaged to assist in the process. The outcome of the offer remains uncertain, with no assurance of a binding agreement or transaction approval.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$4.50 price target. To see the full list of analyst forecasts on STEP Energy Services stock, see the TSE:STEP Stock Forecast page.