Western Forest Prod (WEF) AI Stock Analysis

• Market Cap: C$126.70M
• Dividend Yield: N/A
• Average Volume (3M): 599.73K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.80
• Revenue Growth: 9.47%
• EPS Growth: 85.29%
• Country: CA
• Employees: 2,051
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 0.04
• Shares Outstanding: 316,745,540
• 10 Day Avg. Volume: 1,518,258
• 30 Day Avg. Volume: 599,731
• PEG Ratio: -0.09
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.60
• 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$0.45
• Price Target Upside: 12.50% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 53 Neutral
• Price Target: C$0.50 ▲(25.00%Upside)

Western Forest Products' overall stock score reflects a balance of financial stability and operational challenges. While the company's strategic initiatives and improved earnings provide a positive outlook, ongoing profitability issues and valuation concerns weigh heavily on the score. Technical indicators show mixed signals, further contributing to a cautious stance. The company's strong balance sheet and future growth potential mitigate some of the risks, resulting in a moderate stock score.

Western Forest Prod Business Overview & Revenue Model

Company Description

Western Forest Products Inc. (WEF) is a Canadian company headquartered in Vancouver, British Columbia. It is a leading integrated forest products company that operates primarily in the coastal region of British Columbia. The company is engaged in the harvesting and manufacturing of timber and lumber products, with a diverse product range that includes structural lumber, appearance-grade lumber, and specialty wood products. Western Forest Products is committed to sustainable forest management and provides high-quality products to markets in North America, Asia, and Europe.

How the Company Makes Money

Western Forest Products Inc. generates revenue primarily through the sale of its wood products. The company's key revenue streams include the harvesting and sale of logs, as well as the production and sale of lumber products. It operates several sawmills and remanufacturing facilities, enabling it to produce a wide array of wood products tailored to customer needs in various sectors, such as construction and homebuilding. The company benefits from its access to high-quality timber resources in British Columbia and leverages strategic partnerships and long-term customer relationships to maintain a steady demand for its products. Additionally, Western Forest Products' focus on sustainable forestry practices and certifications helps enhance its market position and appeal to environmentally conscious buyers.

Western Forest Prod Financial Statement Overview

Summary

Western Forest Prod is facing operational challenges with negative profitability margins over the TTM period. Despite a modest revenue increase, profitability remains a concern. The balance sheet is strong with low leverage and a high equity ratio, but negative returns on equity due to net losses are a downside. Cash flow improvements are visible but remain limited, reflecting liquidity management concerns. Overall, while the company exhibits financial stability, operational efficiencies and profit margins need significant attention.

Income Statement

The company's TTM (Trailing-Twelve-Months) gross profit margin stands at 6.21%, which is significantly lower compared to historical figures, indicating declining profitability. The net profit margin is negative due to ongoing net losses, reflecting continued financial strain. Revenue growth is modest at 2.16% compared to the previous year-end, but EBIT and EBITDA margins remain negative, pointing to operational challenges.

Balance Sheet

The debt-to-equity ratio is 0.08, indicating low leverage and financial stability. However, the return on equity is negative due to net losses, impacting overall investor returns. The equity ratio is 66.45%, which shows a strong equity base relative to assets, providing a buffer against potential liabilities.

Cash Flow

The TTM free cash flow is positive but marginal at $4.7 million, showing some improvement from the previous negative trend. Operating cash flow to net income ratio is positive, suggesting better cash generation relative to net income. However, free cash flow growth rate is not particularly strong, indicating potential liquidity constraints.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.09B	1.06B	1.02B	1.44B	1.42B	964.90M
	Gross Profit
67.50M	90.20M	50.60M	254.50M	399.00M	171.60M
	EBIT
-15.30M	-45.40M	-83.40M	84.30M	267.10M	53.90M
	EBITDA
19.70M	13.70M	-35.10M	137.00M	317.70M	107.00M
	Net Income Common Stockholders
-8.70M	-30.40M	-68.50M	61.70M	201.40M	33.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.80M	7.90M	2.30M	15.80M	130.00M	2.90M
	Total Assets
860.70M	915.50M	915.40M	932.80M	959.00M	852.20M
	Total Debt
45.90M	105.00M	104.60M	20.60M	18.30M	93.70M
	Net Debt
41.10M	97.10M	102.30M	4.80M	-111.70M	90.80M
	Total Liabilities
280.90M	349.20M	347.50M	281.10M	341.80M	346.60M
	Stockholders Equity
571.90M	558.20M	565.00M	647.20M	612.10M	504.50M
Cash Flow		Free Cash Flow
4.70M	-13.30M	-78.20M	-56.80M	248.50M	61.70M
	Operating Cash Flow
42.40M	20.10M	-33.80M	-10.30M	281.60M	80.40M
	Investing Cash Flow
38.30M	3.00M	-38.60M	-59.90M	38.70M	-14.50M
	Financing Cash Flow
-78.40M	-17.50M	58.90M	-44.00M	-193.20M	-65.10M

Western Forest Prod Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.40
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WEF, the sentiment is Negative. The current price of 0.4 is below the 20-day moving average (MA) of 0.40, above the 50-day MA of 0.40, and below the 200-day MA of 0.44, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 47.55 is Neutral, neither overbought nor oversold. The STOCH value of 37.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WEF.

Western Forest Prod Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADN	75 Outperform	C$321.06M	16.18	5.85%	6.49%	12.30%	-36.60%
WFG	63 Neutral	$8.04B	3,110.43	0.03%	1.82%	-4.04%	―
CFP	54 Neutral	$1.65B	―	-18.19%	―	-2.51%	-157.38%
WEF	53 Neutral	C$126.70M	―	-1.51%	―	9.47%	85.29%
Sector *	51 Neutral	$2.01B	-1.27	-21.11%	5.15%	2.92%	-30.46%
GFP	46 Neutral	C$85.89M	―	-16.05%	―	-23.94%	24.31%
IFP	44 Neutral	$664.27M	―	-16.90%	―	-10.70%	10.74%

Western Forest Prod Corporate Events

Western Forest Products Announces Shareholder Meeting Results and Share Consolidation Approval

Western Forest Products Inc. held its Annual General and Special Meeting of Shareholders, where the re-election of its board of directors was confirmed, and a special resolution was approved to authorize a share consolidation. The share consolidation, which aims to adjust the company’s share structure, will be executed at a ratio determined by the board within a range of one post-consolidation share for every 25 to 40 pre-consolidation shares, subject to market conditions and regulatory approval. This move is expected to impact the company’s market operations and shareholder value, with further details to be provided in future communications.

Western Forest Products Reports Strong Q1 2025 Results Amid Market Challenges

Western Forest Products Inc. reported a significant improvement in its financial performance for the first quarter of 2025, achieving a net income of $13.8 million compared to a net loss in the previous year. The company reduced its net debt substantially through non-core asset sales, enhancing its liquidity and financial flexibility. Additionally, Western is advancing its transition to higher-value products by investing in continuous dry kilns and has extended its credit facility maturity to 2028. However, the company faces potential challenges from increased countervailing and anti-dumping rates announced by the US Department of Commerce, which could impact its export expenses.

Western Forest Products Extends $250 Million Credit Facility

Western Forest Products Inc. has announced the amendment and extension of its $250 million syndicated credit facility, now maturing on July 21, 2028. This move ensures financial stability and supports the company’s strategic operations in the competitive global softwood market, maintaining unchanged security and financial covenants.

Western Forest Products Proposes Share Consolidation to Boost Investor Interest

Western Forest Products Inc. has announced a proposal for a share consolidation to be considered at its upcoming Annual and Special Meeting of Shareholders. The Board of Directors believes this move will attract interest from new and existing investors and improve the trading liquidity of the company’s common shares. If approved, the Board will have the discretion to determine the consolidation ratio and timing within a year. The number of common shares will be proportionately reduced, with fractional shares rounded to the nearest whole number.

Western Forest Products to Announce Q1 2025 Results

Western Forest Products Inc. announced the release date for its first quarter 2025 financial and operating results, set for May 6, 2025, with an analyst conference call scheduled for May 7, 2025. The call will feature discussions led by key executives, including the CEO, CFO, and Senior VP of Sales, Marketing, and Manufacturing, followed by a Q&A session with analysts. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic direction, potentially impacting its market positioning and investor confidence.