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Wajax Corporation (TSE:WJX)
TSX:WJX
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Wajax Corporation
(TSX:WJX)63Neutral
Wajax Corporation (WJX) vs. S&P 500 (SPY)
Market Cap
C$437.04M
Dividend Yield7.12%
Average Volume (3M)52.13K
Price to Earnings (P/E)8.2
Beta (1Y)0.98
Revenue Growth-3.67%
EPS Growth-39.42%
CountryCA
Employees3,287
SectorIndustrials
Sector Strength66
IndustryIndustrial Equipment Distributors
Share Statistics
EPS (TTM)2.44
Shares Outstanding21,908,690
10 Day Avg. Volume47,716
30 Day Avg. Volume52,125
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.21
Price to Cash Flow (P/CF)-3.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$23.33Price Target Upside34.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Wajax Corporation Business Overview & Revenue Model
Company DescriptionWajax Corporation (WJX) is a leading Canadian distributor and service provider offering a diverse range of industrial products and services. It operates across various sectors including construction, forestry, mining, oil and gas, and manufacturing. Wajax provides equipment, power systems, and industrial components, and also offers comprehensive maintenance and repair services aimed at enhancing the operational efficiency of its clients.
How the Company Makes MoneyWajax Corporation generates revenue through the sale and distribution of equipment, parts, and industrial products, as well as through its service offerings. The company's key revenue streams include equipment sales, which encompass heavy machinery and power systems tailored for specific industry needs. Additionally, Wajax earns income from providing maintenance, repair, and overhaul services, ensuring the longevity and operational efficiency of the equipment they sell. The company also benefits from a network of partnerships with leading manufacturers, which enables it to offer a wide array of products and solutions to its customers. Critical factors contributing to Wajax's earnings include its extensive service network, strategic partnerships, and its ability to provide customized solutions that meet the specific demands of its diverse clientele.
Wajax Corporation Financial Statement Overview
Summary
Wajax Corporation exhibits solid profitability with consistent revenue growth historically, though the recent decline in TTM revenue is concerning. Profit margins remain healthy, but the high leverage poses a risk. Cash flow management shows improvement but lacks stability.Income Statement
Wajax Corporation shows a strong revenue growth trend with a notable increase from 2022 to 2023. The gross profit and net profit margins are healthy, with gross margin at approximately 20.5% and net profit margin at around 2.5% for TTM. However, there is a decline in revenue from 2023 to TTM by about 3.7%, which could indicate potential challenges. EBIT and EBITDA margins are stable but slightly declining, showing consistent operational efficiency.75
Positive
Balance Sheet
The balance sheet is moderately strong with a high debt-to-equity ratio of approximately 1.17 for TTM, indicating relatively high leverage. Return on equity is reasonable at about 10.2%, showing effective use of equity capital. The equity ratio of around 33.1% suggests a moderate level of equity financing, but the high debt levels pose some risk if interest rates rise.68
Positive
Cash Flow
Cash flow analysis reveals a positive shift with free cash flow turning positive in TTM. However, the operating cash flow to net income ratio is low, indicating potential volatility in cash generation. The free cash flow to net income ratio for TTM is positive, showing some improvement in cash flow management. Despite this, historical variability in free cash flow raises concerns about sustainability.60
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.07B | 2.15B | 1.96B | 1.64B | 1.42B | 1.55B | Gross Profit |
| 425.12M | 444.19M | 390.31M | 331.85M | 261.96M | 291.82M | EBIT |
| 118.99M | 135.51M | 114.21M | 92.53M | 72.51M | 79.07M | EBITDA |
| 167.00M | 194.71M | 169.69M | 147.92M | 117.13M | 126.25M | Net Income Common Stockholders |
| 52.87M | 80.99M | 72.41M | 53.25M | 31.65M | 39.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 0.00 | -158.45M | 9.99M | 6.63M | 3.18M | Total Assets |
| 1.47B | 1.47B | 1.25B | 1.08B | 981.39M | 1.05B | Total Debt |
| 500.87M | 500.87M | 303.04M | 321.58M | 379.25M | 406.82M | Net Debt |
| 500.87M | 500.87M | 461.49M | 311.59M | 372.63M | 403.64M | Total Liabilities |
| 977.08M | 977.08M | 800.11M | 690.93M | 655.74M | 728.28M | Stockholders Equity |
| 496.24M | 496.24M | 449.77M | 389.91M | 325.65M | 316.81M |
| Cash Flow | Free Cash Flow | ||||
| 33.19M | -98.85M | 59.12M | 182.81M | 108.12M | -20.96M | Operating Cash Flow |
| 42.51M | -89.00M | 69.13M | 190.15M | 118.81M | -9.67M | Investing Cash Flow |
| -3.76M | -24.63M | -14.35M | -62.58M | -17.64M | -1.97M | Financing Cash Flow |
| -52.46M | 117.47M | -70.00M | -124.20M | -97.72M | 18.75M |
Wajax Corporation Technical Analysis
Negative
17.30
Price Trends
20.75
Negative
21.83
Negative
23.30
Negative
Market Momentum
-0.49
Positive
22.16
Positive
15.21
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WJX, the sentiment is Negative. The current price of 17.3 is below the 20-day moving average (MA) of 20.17, below the 50-day MA of 20.75, and below the 200-day MA of 23.30, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 22.16 is Positive, neither overbought nor oversold. The STOCH value of 15.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WJX.
Wajax Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | C$9.88B | 19.67 | 17.14% | 1.59% | 8.28% | -3.92% | |
74 Outperform | $26.92B | 52.86 | 7.24% | 1.10% | 18.26% | 141.71% | |
71 Outperform | $92.01B | 20.92 | 21.13% | 2.51% | 1.30% | -18.15% | |
66 Neutral | C$1.15B | 10.30 | 11.04% | 5.91% | -0.27% | -15.99% | |
63 Neutral | C$437.04M | 8.22 | 10.25% | 7.12% | -3.67% | -39.42% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
TSE:WJX
Wajax Corporation
17.30
-12.56
-42.06%
TSE:RBA
RB Global
145.70
43.85
43.06%
TSE:CNR
Canadian National Railway
141.12
-31.47
-18.23%
TSE:TIH
Toromont Industries
117.93
-3.74
-3.07%
TSE:MTL
Mullen Group Ltd.
12.96
-0.97
-6.96%
Wajax Corporation Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -11.96% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Negative
The earnings call highlighted successful cost-saving initiatives and an increase in equipment sales in specific categories, but these were overshadowed by significant declines in revenue, gross profit margins, and earnings, as well as challenges in industrial parts and product support sales, leading to an increased leverage ratio.Highlights
Increased Equipment Sales in Construction & Forestry
Equipment sales of $132 million increased by 5% compared to last year due to higher construction and forestry equipment sales in Western and Eastern Canada and higher material handling sales in Central Canada.
Successful Cost-Saving Initiatives
Selling and administrative expenses decreased by $5 million or 6.6%, primarily due to lower personnel costs driven by cost-saving initiatives.
Q3 Backlog Increase
Q3 backlog of $588.1 million increased by $43.3 million or 7.9% compared to Q2 due to higher construction and forestry and mining orders.
Lowlights
Revenue Decline
Revenue of $481 million decreased by $28.7 million, or 5.6%, primarily due to lower mining equipment sales and product support sales.
Decreased Gross Profit Margin
Gross profit margin decreased by 300 basis points to 19.2% due to a higher proportion of equipment sales and increased market pressures.
Significant Drop in Adjusted EBITDA and Net Earnings
Adjusted EBITDA decreased by 25.3%, and adjusted net earnings per share fell by 54.2% compared to the third quarter of 2023.
Decline in Industrial Parts and Product Support Sales
Industrial parts sales decreased by 15% and product support sales decreased by 9% due to less favorable market conditions.
Increased Leverage Ratio
Leverage ratio increased to 2.78x from 2.17x in Q2 due to higher debt levels and lower trailing 12-month pro forma adjusted EBITDA.
Company Guidance
In the third quarter of 2024, Wajax Corporation reported a revenue decline of 5.6% to $481 million, primarily due to decreased sales in mining equipment, industrial parts, and product support, with the absence of a large mining shovel sale that was present in the previous year. Gross profit margins fell by 300 basis points to 19.2%, attributed to a higher proportion of equipment sales and increased market pressures on product support and industrial parts. The adjusted EBITDA decreased by 25.3% to $37.4 million, while adjusted net earnings per share dropped 54.2% to $0.44. Despite a 7.9% sequential increase in backlog to $588.1 million, the year-over-year figure reflected an $11.1 million decrease. Inventory management remained a focus, resulting in a slight reduction compared to Q2 2024. The company also highlighted its ongoing cost-saving initiatives and strategic priorities to navigate softer market conditions, with an emphasis on leveraging its available credit capacity of $167.1 million to support operational and strategic needs.Wajax Corporation Corporate Events
Wajax Corporation Reports Revenue Decline Amid Market Challenges
Nov 5, 2024
Wajax Corporation reported a decline in its third-quarter revenue, with equipment sales increasing but overall sales suffering due to softer market conditions and competitive pressures. The company has managed to increase its backlog and reduce costs, anticipating improvements in leverage and operational efficiency.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.