Western Energy Services (WRG) AI Stock Analysis

• Market Cap: C$69.38M
• Dividend Yield: N/A
• Average Volume (3M): 989.00
• Price to Earnings (P/E): ―
• Beta (1Y): >-0.01
• 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: 21.95% 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$2.00 ▼(-2.44% Downside)

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

Cash Generation

Improved cash generation enhances financial flexibility, allowing for reinvestment in business operations and debt reduction.

Leverage Management

Better leverage management reduces financial risk and interest expenses, supporting long-term financial stability.

Operational Efficiency

Efficient cash flow management indicates strong operational efficiency, enabling sustained business operations despite profitability challenges.

Negative Factors

Revenue Decline

Declining revenue trends can hinder growth prospects and limit the ability to invest in new opportunities, affecting long-term competitiveness.

Profitability Challenges

Ongoing profitability issues can strain financial resources and limit the company's ability to generate shareholder returns.

Decreased Gross Margin

Reduced gross margins indicate higher production costs, which can erode profitability and affect competitive positioning.

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 shows strong cost management with a high gross profit margin, but faces profitability challenges with negative net profit margins and return on equity. The balance sheet is stable with moderate leverage, and cash flow generation is solid, although conversion to net income could improve.

Income Statement

Western Energy Services has shown a decline in revenue over the TTM period, with a negative revenue growth rate of -1.32%. The gross profit margin is strong at 95.99%, indicating efficient cost management. However, the net profit margin is negative at -2.54%, reflecting ongoing profitability challenges. EBIT and EBITDA margins are modest, suggesting limited operational efficiency improvements.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.33, indicating a balanced approach to leveraging. However, the return on equity is negative at -1.98%, highlighting challenges in generating returns for shareholders. The equity ratio stands at 70.13%, showing a strong equity base relative to total assets.

Cash Flow

Operating cash flow is robust, with a coverage ratio of 1.82, indicating good cash generation relative to net income. Free cash flow has grown by 3.05% in the TTM period, showing positive cash flow management. However, the free cash flow to net income ratio of 0.41 suggests limited cash flow conversion from 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: Negative
• Last Price: 2.05
• 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:WRG, the sentiment is Negative. The current price of 2.05 is below the 20-day moving average (MA) of 2.09, below the 50-day MA of 2.09, and below the 200-day MA of 2.13, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 45.26 is Neutral, neither overbought nor oversold. The STOCH value of 13.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WRG.

Western Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AKT.A	73 Outperform	C$77.28M	3.53	12.87%	―	24.94%	956.65%
PHX	72 Outperform	C$346.09M	6.80	23.65%	10.44%	8.98%	-27.41%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
ESI	56 Neutral	C$460.12M	-9.91	-3.50%	―	-2.47%	-246.73%
WRG	54 Neutral	C$69.38M	-10.12	-2.38%	―	-0.38%	6.98%
SDI	52 Neutral	C$24.99M	-312.50	-0.03%	―	-15.25%	-101.10%

Western Energy Services Corporate Events

Western Energy Services Reports Q3 2025 Financial Results Amid Strategic Shifts

Western Energy Services Corp. reported a decrease in third-quarter revenue for 2025 by 14% compared to the previous year, attributed to lower activity in its contract drilling and well servicing segments. Despite this, the company achieved a 14% increase in Adjusted EBITDA due to cost savings from a reorganization. The company faced a net loss of $2.2 million, impacted by higher depreciation and losses on asset sales, but mitigated by increased Adjusted EBITDA and tax recovery. Operationally, the company saw reduced utilization rates in both Canada and the US, with a strategic shift in the US market focus to North Dakota, resulting in improved revenue per operating day.