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CES Energy Solutions
(TSX:CEU)
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Rating:72Outperform
Price Target:
C$20.50
â–²(11.53% Upside)
Action:Reiterated
Date:08/09/26
The score is driven primarily by solid financial performance (strong margins/returns and improved leverage), tempered by middling cash-flow conversion. Technicals add support with a generally positive trend and momentum, while valuation is fair rather than cheap. The latest earnings call was a net positive on records, guidance discipline, and buybacks, with manageable but real near-term headwinds from costs and working-capital impacts.
Positive Factors
Market share & scale
Leading share in U.S. land and Western Canada provides durable volume base, stronger bargaining power with suppliers, and logistics scale. Scale supports recurring consumable sales, cross‑sell of production chemicals and better unit economics, underpinning sustainable revenue and margin resilience.
Negative Factors
Weaker cash conversion
Cash conversion lags earnings, with operating cash and free cash flow below net income due to working‑capital timing. Persistent subpar conversion constrains true cash available for growth, buybacks or debt reduction and increases sensitivity to cyclical activity swings.
Read all positive and negative factors
Positive Factors
Negative Factors
Market share & scale
Leading share in U.S. land and Western Canada provides durable volume base, stronger bargaining power with suppliers, and logistics scale. Scale supports recurring consumable sales, cross‑sell of production chemicals and better unit economics, underpinning sustainable revenue and margin resilience.
Read all positive factors
CES Energy Solutions (CEU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$4.01B
Dividend Yield1.02%
Average Volume (3M)540.22K
Price to Earnings (P/E)20.5
Beta (1Y)1.11
Revenue Growth10.96%
EPS Growth13.96%
CountryCA
Employees2,707
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.93
Shares Outstanding210,857,330
10 Day Avg. Volume382,595
30 Day Avg. Volume540,219
Financial Highlights & Ratios
PEG Ratio0.98
Price to Book (P/B)3.36
Price to Sales (P/S)1.08
P/FCF Ratio13.51
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$21.20Price Target Upside15.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.09
Revenue Forecast (FY)C$2.77B
CES Energy Solutions Business Overview & Revenue Model
Company Description
CES Energy Solutions Corp., headquartered in Calgary, Canada, was established in 1986. This company specializes in the development, production, and distribution of advanced consumable fluids and bespoke chemical products tailored for the energy se...
How the Company Makes Money
CES Energy Solutions makes money primarily by selling oilfield chemical products and charging for related services that support drilling and production operations. Its core revenue streams generally include: (1) Drilling fluids systems and product...
CES Energy Solutions Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call portrayed a strongly positive operating and financial quarter with multiple records (revenue, adjusted EBITDAC, U.S. and Canada regional highs, and funds flow). Management emphasized market-share gains, organic growth in production chemicals (notably in U.S. land), disciplined capital allocation, improved working capital metrics and a conservative but constructive outlook for 2026–2027. Headwinds include supply chain/cost volatility from the Iran conflict, deliberate working capital investments that compressed free cash flow this quarter, longer timelines and near-term dilutive investments for offshore and heavy oil expansion, and modest increases in leverage and net draws. Overall the positive growth, margin outperformance and strong returns metrics materially outweigh the manageable risks and timing-driven lowlights.Positive Updates
Record Quarterly Revenue
Q2 revenue of $714.1 million, a 24.4% increase versus Q2 2025, producing an annualized revenue run rate of approximately $2.9 billion (first quarter to reach ~$2.9B range).
Negative Updates
Supply Chain and Cost Pressures from Middle East Conflict
Cost pressures and supply chain challenges due to fallout from the Iran conflict impacted input availability and pricing; management cited one-time procurement and sourcing actions and noted continued volatility, which constrained willingness to raise margin guidance.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Q2 revenue of $714.1 million, a 24.4% increase versus Q2 2025, producing an annualized revenue run rate of approximately $2.9 billion (first quarter to reach ~$2.9B range).
Read all positive updates
Company Guidance
The company reiterated disciplined capital and financial guidance, maintaining an EBITDA margin target of 15.5%–16.5% (Q2 adj. EBITDAC $119.2M; margin 16.7%) and a leverage band of 1.0–1.5x total debt to trailing‑12‑month EBITDA (Q2 total debt $513M; leverage 1.15x), with confidence in those ranges; 2026 cash CapEx is guided to ~CAD $100M split evenly between maintenance and growth (Q2 CapEx net of disposals $24M, 4% of revenue). Management expects to address the dividend annually in Q4 or Q1 (target payout ratio 10%–20%; current payout ~15%, yield ~1.3%), will continue opportunistic NCIB repurchases (NCIB renewed to repurchase up to 18.1M shares, 10% of float; YTD Q2 repurchases 780k at $17 for $13.3M, subsequent 735k at $16.60 for $12.2M; since 2018 89M shares bought), and stay within the 1.0–1.5x leverage range while pursuing accretive tuck‑ins that meet return hurdles. Operating liquidity metrics are improving (annualized revenue run rate ≈ $2.9B from Q2 revenue $714.1M; funds flow from operations Q2 $97M; cash flow from ops $60M; free cash flow Q2 $25M; FCF/EBITDAC ~21% in Q2 and ~37% TTM, or 51%/46% excl. working capital), working capital at 26% of annualized quarterly revenue (vs historical 30%–35%) and cash conversion cycle 95 days (vs 112), while trailing‑12‑month ROCE is 22% and ROIC 18%; refinancing (new $300M 5‑5/8% notes) trims ~$2M of annual interest expense and extends maturities.CES Energy Solutions Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.68B | 2.49B | 2.35B | 2.16B | 1.92B | 1.20B |
| Gross Profit | 631.43M | 573.44M | 581.08M | 479.35M | 396.95M | 261.08M |
| EBITDA | 417.77M | 396.03M | 355.93M | 300.59M | 230.34M | 141.86M |
| Net Income | 197.57M | 204.72M | 191.11M | 154.64M | 95.22M | 49.88M |
Balance Sheet | ||||||
| Total Assets | 1.79B | 1.62B | 1.54B | 1.38B | 1.41B | 1.09B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Debt | 489.20M | 481.54M | 436.78M | 463.72M | 551.13M | 437.20M |
| Total Liabilities | 905.78M | 816.33M | 725.10M | 719.27M | 801.95M | 600.92M |
| Stockholders Equity | 883.68M | 801.52M | 814.23M | 658.00M | 609.05M | 486.68M |
Cash Flow | ||||||
| Free Cash Flow | 197.84M | 199.21M | 211.55M | 227.88M | -55.91M | -101.83M |
| Operating Cash Flow | 288.82M | 285.37M | 304.66M | 301.78M | -2.74M | -74.41M |
| Investing Cash Flow | -95.39M | -104.88M | -95.22M | -71.83M | -46.79M | -12.76M |
| Financing Cash Flow | -193.43M | -180.49M | -209.45M | -229.95M | 49.53M | 68.91M |
CES Energy Solutions Technical Analysis
Positive
18.38
Price Trends
17.51
Positive
17.57
Positive
16.20
Positive
Market Momentum
0.37
Positive
61.10
Neutral
75.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CEU, the sentiment is Positive. The current price of 18.38 is below the 20-day moving average (MA) of 18.84, above the 50-day MA of 17.51, and above the 200-day MA of 16.20, indicating a bullish trend. The MACD of 0.37 indicates Positive momentum. The RSI at 61.10 is Neutral, neither overbought nor oversold. The STOCH value of 75.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CEU.
CES Energy Solutions Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$1.20B | 13.59 | 14.51% | 1.34% | 21.71% | 40.07% | |
72 Outperform | C$4.01B | 20.46 | 23.68% | 1.02% | 10.96% | 13.96% | |
70 Outperform | C$1.34B | 14.88 | 12.81% | 3.44% | 20.43% | -20.30% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | C$3.75B | 41.17 | 5.26% | 0.55% | 9.33% | -59.43% | |
59 Neutral | C$2.68B | 28.99 | 12.40% | 0.63% | 46.42% | 4.72% |
* Energy Sector Average
TSE:CEU
CES Energy Solutions
19.03
10.84
132.33%
TSE:EFX
Enerflex
30.75
16.94
122.62%
TSE:TOT
Total Energy Services
32.88
19.97
154.69%
TSE:TVK
TerraVest
123.77
-20.17
-14.02%
TSE:TCW
Trican Well Service
6.40
0.83
14.80%
CES Energy Solutions Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
CES Energy Solutions Posts Record Q2 Results and Lifts Shareholder Returns
Positive
Aug 6, 2026
CES Energy Solutions Corp., a major provider of drilling fluids and production chemical solutions to oil and gas operators in the U.S. and Canada, reported record financial results for the second quarter of 2026. The company’s offerings, whi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.