STEP ENERGY SERVICES LTD (STEP.CA) Stock Fundamental Analysis
TSX:STEP - Toronto Stock Exchange - CA85859H1055 - Common Stock - Currency: CAD
Taking everything into account, STEP scores 4 out of 10 in our fundamental rating. STEP was compared to 28 industry peers in the Energy Equipment & Services industry. While STEP seems to be doing ok healthwise, there are quite some concerns on its profitability. 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 -2.17% is on the low side compared to the rest of the industry. STEP is outperformed by 85.71% of its industry peers.
STEP has a Return On Equity of -3.93%. This is amonst the worse of the industry: STEP underperforms 82.14% of its industry peers.
The Return On Invested Capital of STEP (6.08%) is worse than 64.29% of its industry peers.
The Average Return On Invested Capital over the past 3 years for STEP is in line with the industry average of 10.68%.
The 3 year average ROIC (11.56%) for STEP is well above the current ROIC(6.08%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.17% | ||
| ROE | -3.93% | ||
| ROIC | 6.08% |
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
The Operating Margin of STEP (4.68%) is worse than 67.86% of its industry peers.
STEP has a Gross Margin of 9.38%. This is in the lower half of the industry: STEP underperforms 78.57% of its industry peers.
In the last couple of years the Gross Margin of STEP has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.68% | ||
| PM (TTM) | N/A | ||
| GM | 9.38% |
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
STEP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
STEP has less shares outstanding than it did 1 year ago.
STEP has more shares outstanding than it did 5 years ago.
STEP has a better debt/assets ratio than last year.
2.2 Solvency
STEP has an Altman-Z score of 2.03. 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.
Looking at the Altman-Z score, with a value of 2.03, STEP is in the better half of the industry, outperforming 60.71% of the companies in the same industry.
The Debt to FCF ratio of STEP is 2.80, which is a good value as it means it would take STEP, 2.80 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.80, STEP is doing good in the industry, outperforming 71.43% of the companies in the same industry.
STEP has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
STEP has a better Debt to Equity ratio (0.26) than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.8 | ||
| Altman-Z | 2.03 |
ROIC/WACC0.77
WACC7.85%
2.3 Liquidity
A Current Ratio of 1.55 indicates that STEP should not have too much problems paying its short term obligations.
STEP has a Current ratio of 1.55. This is comparable to the rest of the industry: STEP outperforms 46.43% 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 better Quick ratio (1.32) than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
The earnings per share for STEP have decreased strongly by -83.51% in the last year.
STEP shows a decrease in Revenue. In the last year, the revenue decreased by -5.98%.
Measured over the past years, STEP shows a small growth in Revenue. The Revenue has been growing by 7.40% on average per year.
EPS 1Y (TTM)-83.51%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-40%
Revenue 1Y (TTM)-5.98%
Revenue growth 3Y21.21%
Revenue growth 5Y7.4%
Sales Q2Q%-3.87%
3.2 Future
Based on estimates for the next years, STEP will show a very strong growth in Earnings Per Share. The EPS will grow by 26.83% on average per year.
The Revenue is expected to decrease by -3.79% on average over the next years.
EPS Next Y52.55%
EPS Next 2Y37.07%
EPS Next 3Y26.83%
EPS Next 5YN/A
Revenue Next Year-7.74%
Revenue Next 2Y-3.51%
Revenue Next 3Y-2.9%
Revenue Next 5Y-3.79%
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 26.19, which means the current valuation is very expensive for STEP.
STEP's Price/Earnings ratio is a bit more expensive when compared to the industry. STEP is more expensive than 67.86% of the companies in the same industry.
STEP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.15, which is the current average of the S&P500 Index.
STEP is valuated cheaply with a Price/Forward Earnings ratio of 5.87.
75.00% of the companies in the same industry are more expensive than STEP, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.60. STEP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.19 | ||
| Fwd PE | 5.87 |
4.2 Price Multiples
96.43% of the companies in the same industry are more expensive than STEP, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of STEP indicates a somewhat cheap valuation: STEP is cheaper than 60.71% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.51 | ||
| EV/EBITDA | 2.98 |
4.3 Compensation for Growth
STEP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as STEP's earnings are expected to grow with 26.83% in the coming years.
PEG (NY)0.5
PEG (5Y)N/A
EPS Next 2Y37.07%
EPS Next 3Y26.83%
5. Dividend
5.1 Amount
STEP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:STEP (6/27/2025, 7:00:00 PM)
4.19
-0.05 (-1.18%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners16.68%
Inst Owner ChangeN/A
Ins Owners1.44%
Ins Owner ChangeN/A
Market Cap301.60M
Analysts76.92
Price Target5.03 (20.05%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.97%
Min EPS beat(2)-7.56%
Max EPS beat(2)17.5%
EPS beat(4)2
Avg EPS beat(4)-33.51%
Min EPS beat(4)-144.39%
Max EPS beat(4)17.5%
EPS beat(8)4
Avg EPS beat(8)-51.13%
EPS beat(12)7
Avg EPS beat(12)-20.89%
EPS beat(16)10
Avg EPS beat(16)-22.6%
Revenue beat(2)1
Avg Revenue beat(2)6.41%
Min Revenue beat(2)-4.42%
Max Revenue beat(2)17.23%
Revenue beat(4)2
Avg Revenue beat(4)2.78%
Min Revenue beat(4)-4.42%
Max Revenue beat(4)17.23%
Revenue beat(8)3
Avg Revenue beat(8)0.72%
Revenue beat(12)4
Avg Revenue beat(12)-0.41%
Revenue beat(16)7
Avg Revenue beat(16)0.57%
PT rev (1m)0%
PT rev (3m)-4.83%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.93%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.87%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.21%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-4.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.19 | ||
| Fwd PE | 5.87 | ||
| P/S | 0.32 | ||
| P/FCF | 7.51 | ||
| P/OCF | 2.51 | ||
| P/B | 0.77 | ||
| P/tB | 0.77 | ||
| EV/EBITDA | 2.98 |
EPS(TTM)0.16
EY3.82%
EPS(NY)0.71
Fwd EY17.04%
FCF(TTM)0.56
FCFY13.32%
OCF(TTM)1.67
OCFY39.84%
SpS13.09
BVpS5.46
TBVpS5.44
PEG (NY)0.5
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.17% | ||
| ROE | -3.93% | ||
| ROCE | 8.44% | ||
| ROIC | 6.08% | ||
| ROICexc | 6.1% | ||
| ROICexgc | 6.11% | ||
| OM | 4.68% | ||
| PM (TTM) | N/A | ||
| GM | 9.38% | ||
| FCFM | 4.26% |
ROA(3y)7.5%
ROA(5y)-1.64%
ROE(3y)15.21%
ROE(5y)-5.71%
ROIC(3y)11.56%
ROIC(5y)N/A
ROICexc(3y)11.63%
ROICexc(5y)N/A
ROICexgc(3y)11.64%
ROICexgc(5y)N/A
ROCE(3y)16.05%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y75.97%
GM growth 5Y63.02%
F-Score6
Asset Turnover1.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.8 | ||
| Debt/EBITDA | 0.75 | ||
| Cap/Depr | 84.71% | ||
| Cap/Sales | 8.48% | ||
| Interest Coverage | 4.73 | ||
| Cash Conversion | 86.74% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.32 | ||
| Altman-Z | 2.03 |
F-Score6
WACC7.85%
ROIC/WACC0.77
Cap/Depr(3y)106.24%
Cap/Depr(5y)77.9%
Cap/Sales(3y)9.8%
Cap/Sales(5y)8.23%
Profit Quality(3y)1036.34%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-83.51%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-40%
EPS Next Y52.55%
EPS Next 2Y37.07%
EPS Next 3Y26.83%
EPS Next 5YN/A
Revenue 1Y (TTM)-5.98%
Revenue growth 3Y21.21%
Revenue growth 5Y7.4%
Sales Q2Q%-3.87%
Revenue Next Year-7.74%
Revenue Next 2Y-3.51%
Revenue Next 3Y-2.9%
Revenue Next 5Y-3.79%
EBIT growth 1Y-58.45%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year104.61%
EBIT Next 3Y28.74%
EBIT Next 5Y14.58%
FCF growth 1Y-54.35%
FCF growth 3Y33.78%
FCF growth 5Y19.89%
OCF growth 1Y-35.15%
OCF growth 3Y35.4%
OCF growth 5Y15.87%