STEP ENERGY SERVICES LTD (STEP.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:STEP - CA85859H1055 - Common Stock
5.49 CAD
-0.01 (-0.18%)
Overall STEP gets a fundamental rating of 4 out of 10. We evaluated STEP against 27 industry peers in the Energy Equipment & Services industry. STEP scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. STEP has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- STEP had positive earnings in the past year.
- In the past year STEP had a positive cash flow from operations.
- The reported net income has been mixed in the past 5 years: STEP reported negative net income in multiple years.
- STEP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- STEP's Return On Assets of -1.30% is on the low side compared to the rest of the industry. STEP is outperformed by 75.86% of its industry peers.
- STEP's Return On Equity of -1.94% is on the low side compared to the rest of the industry. STEP is outperformed by 75.86% of its industry peers.
- STEP has a Return On Invested Capital of 6.60%. This is comparable to the rest of the industry: STEP outperforms 48.28% of its industry peers.
- STEP had an Average Return On Invested Capital over the past 3 years of 11.56%. This is significantly below the industry average of 177.00%.
- The last Return On Invested Capital (6.60%) for STEP is well below the 3 year average (11.56%), which needs to be investigated, but indicates that STEP had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.3% | ||
| ROE | -1.94% | ||
| ROIC | 6.6% |
ROA(3y)7.5%
ROA(5y)-1.64%
ROE(3y)15.21%
ROE(5y)-5.71%
ROIC(3y)11.56%
ROIC(5y)N/A
1.3 Margins
- Looking at the Operating Margin, with a value of 4.88%, STEP is doing worse than 65.52% of the companies in the same industry.
- STEP has a worse Gross Margin (9.96%) than 75.86% of its industry peers.
- STEP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.88% | ||
| PM (TTM) | N/A | ||
| GM | 9.96% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y75.97%
GM growth 5Y63.02%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), STEP is creating some value.
- STEP has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, STEP has more shares outstanding
- The debt/assets ratio for STEP has been reduced compared to a year ago.
2.2 Solvency
- STEP has an Altman-Z score of 2.88. This is not the best score and indicates that STEP is in the grey zone with still only limited risk for bankruptcy at the moment.
- STEP has a Altman-Z score of 2.88. This is in the better half of the industry: STEP outperforms 72.41% of its industry peers.
- The Debt to FCF ratio of STEP is 1.93, which is an excellent value as it means it would take STEP, only 1.93 years of fcf income to pay off all of its debts.
- STEP's Debt to FCF ratio of 1.93 is amongst the best of the industry. STEP outperforms 82.76% of its industry peers.
- A Debt/Equity ratio of 0.13 indicates that STEP is not too dependend on debt financing.
- STEP has a Debt to Equity ratio of 0.13. This is in the better half of the industry: STEP outperforms 79.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.93 | ||
| Altman-Z | 2.88 |
ROIC/WACC0.79
WACC8.34%
2.3 Liquidity
- A Current Ratio of 1.67 indicates that STEP should not have too much problems paying its short term obligations.
- STEP has a Current ratio of 1.67. This is comparable to the rest of the industry: STEP outperforms 58.62% of its industry peers.
- STEP has a Quick Ratio of 1.32. This is a normal value and indicates that STEP is financially healthy and should not expect problems in meeting its short term obligations.
- STEP has a Quick ratio (1.32) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.67 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
- STEP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -50.00%.
- Looking at the last year, STEP shows a decrease in Revenue. The Revenue has decreased by -9.19% in the last year.
- STEP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.40% yearly.
EPS 1Y (TTM)-50%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%212.5%
Revenue 1Y (TTM)-9.19%
Revenue growth 3Y21.21%
Revenue growth 5Y7.4%
Sales Q2Q%-11.23%
3.2 Future
- STEP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.56% yearly.
- The Revenue is expected to decrease by -4.17% on average over the next years.
EPS Next Y15.42%
EPS Next 2Y25.84%
EPS Next 3Y16.56%
EPS Next 5YN/A
Revenue Next Year-4.56%
Revenue Next 2Y-3.24%
Revenue Next 3Y-2.72%
Revenue Next 5Y-4.17%
3.3 Evolution
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 20.33, which indicates a rather expensive current valuation of STEP.
- The rest of the industry has a similar Price/Earnings ratio as STEP.
- STEP is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 9.12, the valuation of STEP can be described as very reasonable.
- 62.07% of the companies in the same industry are more expensive than STEP, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, STEP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 9.12 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, STEP is valued a bit cheaper than the industry average as 68.97% of the companies are valued more expensively.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of STEP indicates a somewhat cheap valuation: STEP is cheaper than 62.07% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.55 | ||
| EV/EBITDA | 3.7 |
4.3 Compensation for Growth
- STEP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- A more expensive valuation may be justified as STEP's earnings are expected to grow with 16.56% in the coming years.
PEG (NY)1.32
PEG (5Y)N/A
EPS Next 2Y25.84%
EPS Next 3Y16.56%
5. Dividend
5.1 Amount
- No dividends for STEP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
STEP ENERGY SERVICES LTD / STEP.CA FAQ
Can you provide the ChartMill fundamental rating for STEP ENERGY SERVICES LTD?
ChartMill assigns a fundamental rating of 4 / 10 to STEP.CA.
What is the valuation status of STEP ENERGY SERVICES LTD (STEP.CA) stock?
ChartMill assigns a valuation rating of 5 / 10 to STEP ENERGY SERVICES LTD (STEP.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for STEP ENERGY SERVICES LTD?
STEP ENERGY SERVICES LTD (STEP.CA) has a profitability rating of 3 / 10.
What is the expected EPS growth for STEP ENERGY SERVICES LTD (STEP.CA) stock?
The Earnings per Share (EPS) of STEP ENERGY SERVICES LTD (STEP.CA) is expected to grow by 15.42% in the next year.