Western Energy Services (WRG) AI Stock Analysis

• Market Cap: C$82.92M
• Dividend Yield: N/A
• Average Volume (3M): 989.00
• Price to Earnings (P/E): ―
• Beta (1Y): -0.11
• Revenue Growth: -0.38%
• EPS Growth: 6.98%
• Country: CA
• Employees: 615
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Drilling
• EPS (TTM): -0.07
• Shares Outstanding: 33,843,020
• 10 Day Avg. Volume: 1,388
• 30 Day Avg. Volume: 989
• PEG Ratio: 0.00
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 3.51
• 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$2.50
• Price Target Upside: 19.62% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: C$2.50 ▲(19.62% Upside)

Western Energy Services' overall stock score is primarily impacted by its financial performance challenges, including negative profitability metrics and declining revenue. While technical indicators suggest stability, the lack of positive valuation metrics further weighs on the score.

Positive Factors

Free cash flow generation

Western has produced positive free cash flow growth (10.82% TTM) and an operating cash flow to net income ratio of 1.92. Sustained cash generation improves self‑funding of maintenance capex, supports debt paydown or reinvestment, and provides operational resilience through commodity cycles.

Improved leverage position

Debt-to-equity reduced to ~0.34, indicating better leverage management. A lower structural debt burden enhances financial flexibility, lowers interest sensitivity, and gives management room to navigate cyclical drilling demand or pursue selective investments without over-relying on capital markets.

Contract drilling business model

Western’s core model—contract drilling and support services with day‑rates and term contracts—creates recurring, utilization‑driven revenue. Structural upstream activity gives baseline demand; term contracts and mobilization charges provide revenue visibility and scalability as fleet utilization recovers.

Negative Factors

Declining revenue trend

Revenue contraction (-3.66% TTM) signals softening utilization or pricing in core markets. Persistent top‑line decline erodes operating leverage, limits ability to absorb fixed costs, and makes margin recovery and sustainable earnings growth harder without a clear reversal in industry activity or contract wins.

Negative profitability and ROE

Ongoing negative net margins and a negative ROE indicate the business is not yet converting revenue into shareholder returns. Over the medium term this limits retained earnings build‑up, constrains reinvestment capacity, and can impair access to attractive external financing if profitability does not improve.

Gross margin compression

A sharp drop in gross margin (81.6% to 65.73% TTM) points to cost pressures or weaker pricing leverage. Margin compression reduces the buffer for SG&A and interest costs, increasing cash flow volatility and making earnings more sensitive to utilization swings absent structural cost reductions or pricing recovery.

Western Energy Services Business Overview & Revenue Model

Company Description

Western Energy Services Corp. operates as an oilfield service company in Canada and the United States. It operates through Contract Drilling and Production Services segments. The Contract Drilling segment provides contract drilling services using drilling rigs and auxiliary equipment. The Production Services segment offers well servicing rig and related equipment, as well as oilfield rental equipment services to other oilfield service companies. The company owns and operates 57 drilling rigs; and 63 service rigs. It serves crude oil and natural gas exploration and production companies. The company was incorporated in 2013 and is headquartered in Calgary, Canada.

How the Company Makes Money

Western Energy Services generates revenue primarily through its drilling and production services. The company earns money by charging clients for the use of its drilling rigs and the associated labor costs involved in operating those rigs. Additionally, WRG provides well servicing and production testing services, which also contribute to its revenue streams. Key factors that influence the company's earnings include oil and gas market prices, demand for drilling activities, and the level of capital spending by exploration and production companies. Strategic partnerships with oil and gas operators can also enhance revenue opportunities by securing long-term contracts and expanding service offerings.

Western Energy Services Financial Statement Overview

Summary

Western Energy Services faces significant challenges in profitability, with negative net profit margins and declining revenue. Despite improved leverage management and strong cash flow generation, profitability metrics like ROE remain negative, indicating ongoing financial struggles.

Income Statement

Western Energy Services shows a declining revenue trend with a negative revenue growth rate of -3.66% in the TTM. The gross profit margin has decreased significantly from 81.60% in 2024 to 65.73% in the TTM, indicating reduced efficiency in managing production costs. The net profit margin remains negative, reflecting ongoing profitability challenges. Despite a slight improvement in EBIT and EBITDA margins, the company struggles to achieve positive net income.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.34 in the TTM from higher levels in previous years, indicating better leverage management. However, the return on equity remains negative, highlighting challenges in generating returns for shareholders. The equity ratio is stable, suggesting a balanced capital structure, but the negative ROE indicates profitability issues.

Cash Flow

Western Energy Services has shown a positive free cash flow growth rate of 10.82% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is strong at 1.92, suggesting efficient cash flow management despite negative net income. The free cash flow to net income ratio is also positive, reflecting better cash flow relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	218.77M	223.08M	233.45M	200.34M	131.68M	103.68M
Gross Profit	143.80M	182.03M	21.82M	160.25M	89.65M	55.42M
EBITDA	42.61M	42.65M	45.34M	37.94M	22.43M	10.32M
Net Income	-6.86M	-7.16M	-7.21M	29.00M	-35.81M	-41.30M
Balance Sheet
Total Assets	405.95M	430.98M	442.93M	475.71M	456.00M	495.63M
Cash, Cash Equivalents and Short-Term Investments	3.46M	3.79M	6.25M	8.88M	7.48M	19.32M
Total Debt	96.82M	98.75M	115.22M	131.69M	240.42M	241.99M
Total Liabilities	118.25M	135.13M	147.27M	173.18M	269.50M	273.15M
Stockholders Equity	285.39M	293.62M	293.37M	300.59M	184.51M	220.80M
Cash Flow
Free Cash Flow	19.08M	25.19M	28.73M	-5.69M	9.77M	24.93M
Operating Cash Flow	41.32M	46.80M	51.35M	28.54M	16.63M	27.72M
Investing Cash Flow	-25.91M	-21.91M	-25.45M	-28.95M	-5.69M	-3.01M
Financing Cash Flow	-15.89M	-27.03M	-28.85M	1.44M	-22.79M	-9.41M

Western Energy Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WRG, the sentiment is Positive. The current price of 2.09 is below the 20-day moving average (MA) of 2.22, below the 50-day MA of 2.14, and below the 200-day MA of 2.12, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 71.53 is Negative, neither overbought nor oversold. The STOCH value of 84.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WRG.

Western Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCW	78 Outperform	$1.55B	12.80	18.06%	3.57%	9.24%	6.35%
PHX	72 Outperform	C$387.92M	7.59	23.65%	10.44%	8.98%	-27.41%
PD	71 Outperform	C$1.48B	26.48	3.43%	―	-5.55%	-74.96%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
CFW	65 Neutral	C$500.44M	22.25	3.20%	―	-8.13%	-28.00%
ESI	56 Neutral	C$600.87M	-12.42	-3.50%	―	-2.47%	-246.73%
WRG	54 Neutral	C$82.92M	-12.09	-2.38%	―	-0.38%	6.98%