STEP Energy Services (STEP) AI Stock Analysis

• Market Cap: C$309.71M
• Dividend Yield: N/A
• Average Volume (3M): 17.34K
• Price to Earnings (P/E): 151.9
• Beta (1Y): 1.21
• Revenue Growth: -6.25%
• EPS Growth: -129.86%
• Country: CA
• Employees: 1,251
• Sector: Energy
• Sector Strength: 49
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.08
• Shares Outstanding: 72,873,116
• 10 Day Avg. Volume: 14,090
• 30 Day Avg. Volume: 17,335
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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$4.88
• Price Target Upside: 17.59% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 54 Neutral
• Price Target: C$4.50 ▲(8.43% Upside)

STEP Energy Services' overall stock score reflects a challenging financial performance with declining revenues and profitability, offset by positive cash flow management and debt reduction. Technical indicators suggest weak momentum, while valuation metrics are unattractive due to recent losses. The earnings call provides some optimism with strategic initiatives and technological advancements, but significant challenges remain.

Positive Factors

Balance Sheet Improvements

The company has done a tremendous job on its balance sheet over the past few years, including over $200 million of debt repayments since 2019.

Debt Reduction

Large client receipts near the end of Q4 helped reduce net debt to $52.7 million, down from $60.7 million in Q3/24.

Future Earnings Potential

Q1 should improve as producer budgets reset, with Canada expected to help offset ongoing headwinds in the U.S. business.

Negative Factors

Market Dynamics

Q4 represented a softer quarter, impacted by year-end budget exhaustion, competitive market dynamics in the US, and some added transaction-related costs.

Oversupply Concerns

The U.S. market faces oversupply issues which keeps the analyst on the sidelines for now.

Revenue and Margin Decline

U.S. Revenue declined approximately 17% quarter-over-quarter to $37 million while EBITDA margins fell to negative 8%.

STEP Energy Services Business Overview & Revenue Model

Company Description

STEP Energy Services is a leading oilfield service company headquartered in Calgary, Alberta, specializing in providing coiled tubing, fluid and nitrogen pumping, and hydraulic fracturing services. Serving the North American oil and gas sector, STEP Energy Services is committed to delivering high-quality and reliable services that enhance the efficiency and productivity of exploration and production operations for its clients.

How the Company Makes Money

STEP Energy Services makes money through the provision of specialized oilfield services, including coiled tubing, fluid and nitrogen pumping, and hydraulic fracturing. The company primarily generates revenue by offering these services to exploration and production companies within the oil and gas industry. Revenue streams are driven by contracts and agreements with oil and gas producers that require these technical services to enhance their operational capabilities. Additionally, STEP may engage in partnerships or strategic alliances that enable it to expand its service offerings or enter new markets, thereby contributing to its earnings. The company's financial performance is influenced by factors such as oil and gas prices, demand for its services, and its ability to maintain and grow its client base.

STEP Energy Services Financial Statement Overview

Summary

STEP Energy Services operates in a challenging sector with mixed financial performance. The income statement shows pressure on profits and revenue growth, while the balance sheet indicates strong equity support but faces leverage concerns. Cash flow is a strength with robust operational cash conversion.

Income Statement

STEP Energy Services shows mixed performance in its income statement. The TTM (Trailing-Twelve-Months) reveals a gross profit margin of 9.36% and a negative net profit margin of -1.64%. The company has struggled with revenue growth, showing a decline compared to the previous period. EBIT and EBITDA margins are moderate at 4.70% and 10.98%, respectively, indicating operational challenges amidst a competitive industry landscape.

Balance Sheet

The balance sheet reflects a stable equity base with a debt-to-equity ratio of 0.29, suggesting moderate leverage. Return on Equity (ROE) has been erratic, moving from negative to positive, now at -3.93% in the TTM. The equity ratio of 55.18% signifies good asset backing by equity, yet the company faces risks from its fluctuating debt levels and equity returns.

Cash Flow

The cash flow statement indicates strong operational cash flow relative to net income, with a ratio of -7.78, highlighting effective cash generation despite net losses. Free cash flow growth has been inconsistent, yet the company maintains a healthy free cash flow to net income ratio of -2.60, emphasizing its capability to manage expenses and investments effectively.

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	163.31M	221.38M	54.55M	-41.74M
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	162.98M	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: Negative
• Last Price: 4.15
• 50DMA: Negative
• 100DMA: Positive
• 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 4.15 is below the 20-day moving average (MA) of 4.36, below the 50-day MA of 4.31, and below the 200-day MA of 4.36, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 34.70 is Neutral, neither overbought nor oversold. The STOCH value of 19.33 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
TCW	79 Outperform	$1.02B	10.49	20.50%	3.33%	-2.14%	-6.88%
TOT	79 Outperform	C$457.76M	7.11	11.66%	3.01%	14.74%	62.76%
SHLE	74 Outperform	C$168.91M	4.22	20.27%	―	18.15%	-75.41%
Sector *	65 Neutral	$14.81B	7.14	3.01%	5.53%	4.29%	-62.49%
HWO	61 Neutral	$10.54M	0.40	-2.30%	400.00%	-82.87%	―
STEP	54 Neutral	C$309.71M	151.92	-5.02%	―	-6.25%	-129.86%
CFW	52 Neutral	C$288.59M	29.62	1.53%	―	-4.63%	-92.13%

STEP Energy Services Corporate Events

STEP Energy Services Reports Q2 2025 Financial Results

STEP Energy Services Ltd. reported its financial results for the second quarter of 2025, showing consolidated revenue of $228 million, slightly down from $231.4 million in the same period of 2024. The company’s net income decreased to $5.9 million from $10.5 million in the previous year, reflecting a challenging quarter marked by reduced activity levels compared to the first quarter, which is typically the busiest for the industry. Despite these challenges, STEP continues to maintain a strong operational presence with significant horsepower capacity and active coiled tubing units, positioning itself for future growth in the energy services sector.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$5.00 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 Q2 2025 Results and Host Conference Call

STEP Energy Services Ltd. announced it will release its second quarter 2025 financial results on August 6, 2025, followed by a conference call on August 7 to discuss the results. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and operational strategies, potentially impacting its market positioning and investor relations.

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 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.