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ADF Group Inc. SV
(TSX:DRX)
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Rating:74Outperform
Price Target:
C$19.00
▲(19.50% Upside)
Action:Reiterated
Date:09/12/26
Overall score is driven by strong financial quality (solid margins, low leverage, and strong recent free cash flow) and a constructive earnings-call backdrop (record backlog and improving operational outlook). Valuation is supportive (moderate P/E and dividend), but the technical picture is weak with negative momentum and price below key moving averages, which tempers the overall rating.
Positive Factors
Record Backlog and Revenue Growth
The record backlog provides substantial contracted work visibility, while the sharp year-to-date revenue increase demonstrates strong project execution and demand. Together, these support continued scale, better fixed-cost absorption, and a stronger foundation for revenue over the next several quarters.
Negative Factors
Legacy Backlog Margin Pressure
Below-normal margins on the legacy backlog can continue to dilute consolidated profitability during the next several quarters, even as volumes rise. The drag may ease as those projects are completed, but near-term earnings quality remains exposed to the inherited contract mix.
Read all positive and negative factors
Positive Factors
Negative Factors
Record Backlog and Revenue Growth
The record backlog provides substantial contracted work visibility, while the sharp year-to-date revenue increase demonstrates strong project execution and demand. Together, these support continued scale, better fixed-cost absorption, and a stronger foundation for revenue over the next several quarters.
Read all positive factors
ADF Group Inc. SV (DRX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$478.27M
Dividend Yield0.24%
Average Volume (3M)29.91K
Price to Earnings (P/E)13.2
Beta (1Y)1.22
Revenue Growth29.57%
EPS Growth-7.54%
CountryCA
Employees754
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)1.27
Shares Outstanding16,476,336
10 Day Avg. Volume34,821
30 Day Avg. Volume29,912
Financial Highlights & Ratios
PEG Ratio-0.19
Price to Book (P/B)1.37
Price to Sales (P/S)0.97
P/FCF Ratio6.27
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$21.00Price Target Upside32.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)1.04
Revenue Forecast (FY)C$365.08M
ADF Group Inc. SV Business Overview & Revenue Model
Company Description
ADF Group Inc. provides specialized services in structural steel, spanning the design and engineering of connections for projects in Canada and the United States. The company undertakes the fabrication and erection of complex steel frameworks, inc...
How the Company Makes Money
ADF Group makes money primarily by selling fabricated structural steel for construction projects under contract. Revenue is generated on a project-by-project basis from (1) fabrication and supply of structural steel components (the core stream), w...
ADF Group Inc. SV Earnings Call Summary
Earnings Call Date:Sep 10, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Dec 09, 2026
Earnings Call Sentiment Positive
The call was strongly positive overall, supported by 79% year-to-date revenue growth, higher adjusted EBITDA and net income, record backlog, strong cash generation, and expansion projects progressing on time and on budget. These positives were partly offset by the quarterly gross-margin decline, share-unit and foreign-exchange charges, ongoing steel and tariff costs, and elevated trade uncertainty.Positive Updates
Strong Revenue Growth
Quarterly revenue was $95 million, $42 million higher than the same quarter last year. Year-to-date revenue reached $194.3 million versus $108.5 million, an increase of 79% from the 6-month period ended July 31, 2025. The prior-year comparison was affected by a work-sharing program at the Terrebonne plant that reduced fabrication hours and revenues.
Negative Updates
Quarterly Gross Margin Declined
Second-quarter gross margin was 18.7% of revenue, down from 20.7% in the quarter ended July 31, 2025. Higher input costs, including steel prices and recent tariff changes, mitigated the positive effect of higher revenue and improved fixed-cost absorption.
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Q2-2027 Updates
Positive
Negative
Strong Revenue Growth
Quarterly revenue was $95 million, $42 million higher than the same quarter last year. Year-to-date revenue reached $194.3 million versus $108.5 million, an increase of 79% from the 6-month period ended July 31, 2025. The prior-year comparison was affected by a work-sharing program at the Terrebonne plant that reduced fabrication hours and revenues.
Read all positive updates
Company Guidance
ADF expects full year CapEx to total “just over $40 million,” including “just over USD 10 million” for the Great Falls facility; the year-to-date gross margin of 21.5% is “a pretty good indication of what’s coming,” with improvement expected as the Groupe LAR legacy backlog is cleared and margins potentially “creep up in Q3 and Q4,” while the approximately 10% commercial invoice cost on Canadian fabrication for U.S. projects remains factored into margins; core SG&A “should be pretty stable,” with yearly salary increases “around the 3% level or should be around the 3% level for the coming year also,” and “no real need to increase SG&A to meet the expected revenue growth in line with the backlog.”ADF Group Inc. SV Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
82
Very Positive
Cash Flow
67
Positive
| Breakdown | TTM | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 | Jan 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 344.50M | 258.74M | 339.63M | 331.02M | 250.89M | 280.74M |
| Gross Profit | 77.19M | 59.77M | 107.24M | 71.65M | 35.57M | 24.69M |
| EBITDA | 54.25M | 43.50M | 85.68M | 55.82M | 24.18M | 17.76M |
| Net Income | 31.65M | 26.31M | 56.79M | 37.62M | 14.94M | 9.56M |
Balance Sheet | ||||||
| Total Assets | 366.08M | 328.68M | 307.90M | 328.61M | 271.62M | 201.05M |
| Cash, Cash Equivalents and Short-Term Investments | 91.43M | 62.73M | 59.98M | 72.38M | 7.19M | 7.13M |
| Total Debt | 38.79M | 41.63M | 45.63M | 48.84M | 51.52M | 36.67M |
| Total Liabilities | 163.99M | 145.07M | 138.59M | 166.47M | 146.63M | 92.60M |
| Stockholders Equity | 202.09M | 183.60M | 169.31M | 162.13M | 124.98M | 108.45M |
Cash Flow | ||||||
| Free Cash Flow | 68.87M | 40.09M | 46.77M | 71.37M | -14.77M | -19.40M |
| Operating Cash Flow | 87.33M | 47.49M | 55.06M | 77.86M | -2.61M | 2.67M |
| Investing Cash Flow | -39.79M | -27.27M | -8.71M | -6.27M | -12.08M | -21.99M |
| Financing Cash Flow | -7.67M | -14.89M | -62.07M | -6.69M | 14.16M | 9.20M |
ADF Group Inc. SV Technical Analysis
Positive
15.90
Price Trends
15.17
Positive
15.54
Positive
12.62
Positive
Market Momentum
0.49
Negative
62.40
Neutral
85.82
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DRX, the sentiment is Positive. The current price of 15.9 is above the 20-day moving average (MA) of 15.75, above the 50-day MA of 15.17, and above the 200-day MA of 12.62, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 62.40 is Neutral, neither overbought nor oversold. The STOCH value of 85.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:DRX.
ADF Group Inc. SV Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$478.27M | 13.19 | 16.61% | 0.24% | 29.57% | -7.54% | |
71 Outperform | C$4.05B | 67.63 | 13.41% | 1.15% | 7.38% | -39.80% | |
70 Outperform | C$2.69B | 27.60 | 13.28% | 3.44% | -15.83% | -4.46% | |
68 Neutral | C$780.33M | 11.93 | 12.07% | 3.89% | -4.10% | 82.03% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | C$3.45B | -55.24 | -6.76% | 1.53% | 21.48% | -323.81% | |
45 Neutral | C$164.64M | -1.40 | -48.31% | 6.88% | 1.23% | -1641.31% |
* Industrials Sector Average
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ADF Group Inc. SV Corporate Events
Business Operations and StrategyFinancial Disclosures
ADF Group Secures $82 Million in New North American Steel Contracts
Positive
Oct 15, 2026
ADF Group Inc., a specialist in complex steel superstructures for non-residential infrastructure across North America, operates multiple fabrication plants and paint shops in Canada and the U.S., supported by a construction division dedicated to i...
Financial Disclosures
ADF Group Sets Date for Q2 2027 Results and Investor Call
Neutral
Sep 3, 2026
ADF Group Inc. will release its financial results for the three- and six-month periods ended July 31, 2026, on September 10, 2026, at 7:00 a.m. Eastern time. The disclosure underscores the company’s ongoing commitment to timely reporting for...
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.