STEP Energy Services (STEP) AI Stock Analysis

• Market Cap: C$275.99M
• Dividend Yield: N/A
• Average Volume (3M): 22.95K
• Price to Earnings (P/E): 151.9
• Beta (1Y): 1.27
• Revenue Growth: -5.98%
• EPS Growth: -121.37%
• Country: CA
• Employees: 1,251
• Sector: Energy
• Sector Strength: 72
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.33
• Shares Outstanding: 72,629,160
• 10 Day Avg. Volume: 17,950
• 30 Day Avg. Volume: 22,955
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.34
• 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$4.58
• Price Target Upside: 20.53% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 64 Neutral
• Price Target: C$4.00 ▲(5.26%Upside)

STEP Energy Services shows a recovering financial performance with improved profitability and cash flow management, but still faces challenges with thin margins and valuation issues. The technical analysis indicates a neutral outlook, while the recent earnings call provides a cautiously optimistic view with some operational risks. Corporate events suggest strategic adjustments, but recent financial results highlight ongoing challenges. These combined factors lead to a moderate overall stock score.

Positive Factors

Debt Reduction

Large client receipts helped reduce net debt to $52.7 million, showcasing effective financial management.

Financial Management

The company has improved its balance sheet significantly, repaying over $200 million of debt since 2019.

Negative Factors

Market Dynamics

The U.S. market faces oversupply issues, leading to caution among analysts.

Pricing Pressure

Increased fleet migration into the WCSB has created pricing pressure, which could impact future revenues.

STEP Energy Services Business Overview & Revenue Model

Company Description

STEP Energy Services is a leading oilfield service company headquartered in Calgary, Alberta, Canada. The company primarily operates in the energy sector, offering specialized services such as coiled tubing, hydraulic fracturing, and other well intervention solutions to oil and gas producers. STEP is renowned for its technical expertise, operational excellence, and commitment to safety and environmental stewardship.

How the Company Makes Money

STEP Energy Services generates revenue through the provision of specialized well intervention and stimulation services to the oil and gas industry. The company's primary revenue streams include fees for hydraulic fracturing, coiled tubing, and ancillary services that improve the efficiency and productivity of oil and gas wells. These services are typically contracted by exploration and production companies who require enhanced recovery techniques to optimize their operations. STEP's earnings are influenced by the level of drilling and completion activity in the energy sector, market demand for oil and gas, and the company's ability to maintain strong relationships and contracts with key industry players.

STEP Energy Services Financial Statement Overview

Summary

STEP Energy Services has demonstrated a commendable recovery from previous financial difficulties. The income statement shows improved profitability, though still modest net margins. The balance sheet reflects enhanced financial stability with reduced leverage and stronger equity. Cash flow metrics are robust, showcasing effective cash management and liquidity. While there are positive trends across all financial statements, caution is advised due to historically thin margins and low returns on equity.

Income Statement

STEP Energy Services has shown a significant recovery in its income statement metrics over recent years. The gross profit margin improved from negative figures in 2020 to approximately 11.5% in 2024, indicating better cost management. The net profit margin increased from a substantial loss in 2020 to a marginal profit in 2024, reflecting improved profitability. Revenue growth rate from 2019 to 2024 showed fluctuations, with a notable dip in 2023 but a recovery in 2024. Despite this, the EBIT and EBITDA margins have consistently improved, suggesting enhanced operational efficiency. Overall, the income statement shows positive trends but remains moderate due to thin net margins.

Balance Sheet

The balance sheet of STEP Energy Services shows a gradual improvement in financial stability. The debt-to-equity ratio has decreased from 0.79 in 2019 to 0.23 in 2024, indicating reduced financial leverage and improved risk profile. The return on equity remains low due to thin net income, though it marks a recovery from previous losses. The equity ratio improved from 47.1% in 2019 to 63.8% in 2024, reflecting a stronger equity position. While the company has made strides in strengthening its balance sheet, the low ROE and past high leverage suggest caution.

Cash Flow

STEP Energy Services exhibits strong cash flow management. The operating cash flow to net income ratio is robust, indicating effective conversion of profits into cash. Free cash flow has shown positive growth over the years, despite some fluctuations. The positive free cash flow to net income ratio demonstrates the company's ability to generate cash beyond its net earnings. Additionally, the reduction in capital expenditure supports improved free cash flow, enhancing financial flexibility. Overall, the cash flow metrics indicate strong liquidity and cash management capabilities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
954.97M	945.72M	989.02M	536.31M	368.94M
	Gross Profit
110.19M	116.14M	147.59M	17.76M	-33.41M
	EBIT
66.47M	77.84M	90.26M	-19.97M	-63.40M
	EBITDA
129.35M	163.31M	221.38M	54.55M	-41.74M
	Net Income Common Stockholders
1.76M	50.42M	94.78M	-28.13M	-119.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.36M	1.78M	2.79M	3.70M	1.27M
	Total Assets
580.63M	606.52M	682.53M	483.85M	479.86M
	Total Debt
84.47M	113.63M	162.98M	205.33M	220.35M
	Net Debt
80.11M	111.85M	160.19M	201.63M	219.08M
	Total Liabilities
210.11M	250.97M	376.50M	306.41M	275.28M
	Stockholders Equity
370.53M	355.55M	306.03M	177.44M	204.58M
Cash Flow		Free Cash Flow
51.72M	66.43M	39.62M	21.60M	28.98M
	Operating Cash Flow
146.06M	171.61M	122.60M	58.85M	46.80M
	Investing Cash Flow
-92.57M	-108.98M	-66.44M	-30.71M	-16.55M
	Financing Cash Flow
-50.98M	-63.90M	-57.77M	-25.67M	-36.50M

STEP Energy Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 3.8 is below the 20-day moving average (MA) of 3.93, below the 50-day MA of 3.88, and below the 200-day MA of 4.23, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 41.00 is Neutral, neither overbought nor oversold. The STOCH value of 14.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:STEP.

STEP Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOT	80 Outperform	C$411.81M	6.60	11.38%	3.64%	11.02%	102.23%
TCW	75 Outperform	$867.22M	8.98	19.44%	4.22%	2.15%	-5.97%
SHLE	74 Outperform	C$166.20M	5.32	16.11%	―	18.29%	-94.32%
CFW	65 Neutral	C$294.60M	16.20	3.00%	―	-5.50%	-88.55%
STEP	64 Neutral	C$275.99M	151.92	-3.90%	―	-5.98%	-121.37%
HWO	63 Neutral	$10.28M	0.41	-3.83%	370.28%	-86.21%	―
Sector *	58 Neutral	$7.56B	3.50	-4.45%	10.15%	0.79%	-49.51%

STEP Energy Services Corporate Events

STEP Energy Services Announces Board Leadership Changes Following AGM

STEP Energy Services announced the results of its 2025 annual general meeting, where seven directors were elected with overwhelming support. The board appointed Jeremy Gackle as chair and Edward LaFehr as lead director, with committee positions also confirmed. This leadership update is poised to strengthen STEP’s governance as it continues to provide innovative and reliable services to its clients in the energy sector.

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 Reports Q1 2025 Financial Results

STEP Energy Services Ltd. reported a decrease in consolidated revenue for Q1 2025, down 4% from the same period in 2024, while net income also fell to $24.2 million from $41.4 million. Despite these declines, the company made progress on its shareholder return strategy by repurchasing shares under its Normal Course Issuer Bid, indicating a commitment to enhancing 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 to Release Q1 2025 Results and Host Conference Call

STEP Energy Services Ltd. announced that it will release its first quarter 2025 financial results on May 14, 2025, after market close, followed by a conference call on May 15, 2025, to discuss the results. This announcement is part of STEP’s ongoing efforts to maintain transparency and engage with stakeholders, reflecting its commitment to providing reliable and cost-effective solutions in the energy services industry.

STEP Energy Services to Announce Q1 2025 Results and Host Conference Call

STEP Energy Services Ltd. announced it will release its first quarter 2025 financial results on May 14, 2025, after market close, followed by a conference call on May 15, 2025, to discuss the results. This announcement is part of STEP’s ongoing efforts to maintain transparency with stakeholders and provide insights into its financial performance, which could impact its market positioning and stakeholder confidence.