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Element Fleet Management
(TSX:EFN)
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Rating:58Neutral
Price Target:
C$22.50
▼(-18.24% Downside)
Action:Reiterated
Date:08/10/26
The score is anchored by a better-than-average earnings call with reaffirmed guidance, growth and profitability highlights, and active capital returns. This is tempered most by balance-sheet and cash-flow risk (high leverage and historically volatile cash conversion), while technicals are mixed/neutral and valuation appears somewhat expensive for the risk profile.
Positive Factors
Revenue and Services Growth
Broad-based revenue growth, including faster service expansion, supports a more diversified earnings base beyond financing income. Continued growth in managed vehicles and services can deepen client relationships, improve recurring revenue visibility, and reinforce Element’s fleet-management position over the next several quarters.
Negative Factors
High Leverage
Elevated leverage leaves Element with less balance-sheet cushion if asset values, funding conditions, or operating performance weaken. Although the company remains within its stated debt-to-capital target, the high debt burden can constrain financial flexibility and make sustainable growth more dependent on funding access.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and Services Growth
Broad-based revenue growth, including faster service expansion, supports a more diversified earnings base beyond financing income. Continued growth in managed vehicles and services can deepen client relationships, improve recurring revenue visibility, and reinforce Element’s fleet-management position over the next several quarters.
Read all positive factors
Element Fleet Management (EFN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$8.53B
Dividend Yield2.66%
Average Volume (3M)1.81M
Price to Earnings (P/E)21.5
Beta (1Y)0.41
Revenue Growth5.15%
EPS Growth-27.32%
CountryCA
Employees3,000
SectorIndustrials
Sector Strength72
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)0.72
Shares Outstanding391,319,760
10 Day Avg. Volume2,253,320
30 Day Avg. Volume1,813,078
Financial Highlights & Ratios
PEG Ratio-1.95
Price to Book (P/B)5.33
Price to Sales (P/S)6.41
P/FCF Ratio-65.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$33.38Price Target Upside21.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.4
Revenue Forecast (FY)C$1.30B
Element Fleet Management Business Overview & Revenue Model
Company Description
Element Fleet Management Corp. is a prominent provider of fleet management services, with its core operations spanning Canada, the U.S., Mexico, Australia, and New Zealand. It furnishes a comprehensive suite of solutions, including vehicle procure...
How the Company Makes Money
Element Fleet Management makes money primarily by providing financing/lease solutions for client vehicles and charging for fleet-related services provided over the vehicle lifecycle. Key revenue streams include: (1) Lease and financing-related rev...
Element Fleet Management Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial picture: double-digit top-line and EPS growth, margin expansion, yield improvement, strategic funding innovation (equity residual transaction), a marquee Waymo partnership, and technology-driven efficiency gains expected to deliver ~$20 million of annualized savings in 2027. Key near-term headwinds include originations volatility (down 9% YoY), a quarter-over-quarter cash tax-driven dip in FCF per share, expense inflation tied to growth investments, and a timing-related reduction in interest income from the new funding structure. On balance, the highlights — consistent revenue and EPS growth, strong ROE, diversified funding and strategic growth initiatives — materially outweigh the lowlights.Positive Updates
Top-Line and EPS Growth
Adjusted net revenue increased 10% year-over-year to $318 million in Q2; adjusted EPS grew 12% and first-half revenue rose 13% with EPS up 18% year-over-year, demonstrating durable earnings growth.
Negative Updates
Originations Volatility and YoY Decline
Originations were $1.7 billion, down 9% YoY (though up 19% sequentially); the YoY decline was driven by normalization from a large originate-to-syndicate client and creates near-term variability in asset growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-Line and EPS Growth
Adjusted net revenue increased 10% year-over-year to $318 million in Q2; adjusted EPS grew 12% and first-half revenue rose 13% with EPS up 18% year-over-year, demonstrating durable earnings growth.
Read all positive updates
Company Guidance
Element said it remains positioned to deliver within its full‑year 2026 guidance ranges while targeting 2–4% annual VUM growth and expecting annual credit losses to normalize to roughly 1–2 basis points; management highlighted that its inaugural equity‑residual transaction removed ~$700M of receivables effective May 1 (distributions began July 1) with revenue recognized over an ~4‑year asset life and that the balance sheet sits at a 76.5% debt‑to‑capital ratio (target 73–77%). The company expects the Q2 organizational actions (affecting ~8% of the workforce) to generate about $20M of annualized run‑rate savings in 2027, reiterated Dublin targets of $30–45M incremental net revenue and $22–37M of adjusted operating income by 2028, and said the Waymo partnership will begin contributing to services growth in 2027 (helping add a few percentage points to services revenue). Management also emphasized capital deployment flexibility—returning $163M to shareholders in Q2 (including $120M to repurchase 5.8M shares) and repurchasing 8.1M shares (~2% of shares outstanding) in H1—while aiming for medium‑term revenue growth in the ~6–8% range with service revenue making a larger contribution versus financing income.Element Fleet Management Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
48
Neutral
Cash Flow
41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.37B | 2.26B | 2.20B | 1.91B | 1.46B | 1.59B |
| Gross Profit | 739.14M | 745.95M | 2.16B | 1.87B | 1.42B | 467.44M |
| EBITDA | 1.66B | 1.81B | 1.69B | 1.64B | 1.06B | 1.07B |
| Net Income | 288.22M | 284.02M | 386.77M | 344.77M | 409.64M | 356.01M |
Balance Sheet | ||||||
| Total Assets | 13.39B | 13.86B | 12.70B | 16.47B | 14.33B | 12.97B |
| Cash, Cash Equivalents and Short-Term Investments | 503.52M | 503.14M | 128.84M | 72.60M | 37.82M | 27.84M |
| Total Debt | 9.50B | 9.88B | 8.56B | 8.21B | 6.80B | 8.30B |
| Total Liabilities | 10.73B | 11.14B | 9.92B | 12.57B | 10.65B | 9.52B |
| Stockholders Equity | 2.66B | 2.72B | 2.77B | 3.90B | 3.68B | 3.45B |
Cash Flow | ||||||
| Free Cash Flow | 849.46M | -222.35M | -264.85M | -1.39B | 118.45M | 1.90B |
| Operating Cash Flow | 1.34B | -149.95M | -154.11M | -1.29B | 169.19M | 1.97B |
| Investing Cash Flow | -578.19M | -139.24M | -227.00M | -99.28M | -48.34M | -67.41M |
| Financing Cash Flow | -434.64M | 510.99M | 654.08M | 1.40B | -5.60M | -1.87B |
Element Fleet Management Technical Analysis
Negative
27.52
Price Trends
24.13
Negative
26.57
Negative
28.94
Negative
Market Momentum
-0.78
Negative
36.52
Neutral
59.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EFN, the sentiment is Negative. The current price of 27.52 is above the 20-day moving average (MA) of 21.81, above the 50-day MA of 24.13, and below the 200-day MA of 28.94, indicating a bearish trend. The MACD of -0.78 indicates Negative momentum. The RSI at 36.52 is Neutral, neither overbought nor oversold. The STOCH value of 59.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:EFN.
Element Fleet Management Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | C$2.86B | 23.19 | 10.58% | 2.83% | 11.69% | 18.18% | |
68 Neutral | C$13.22B | 25.97 | 12.39% | 1.64% | -2.61% | -6.43% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | C$13.04B | 23.90 | 19.22% | 1.25% | 0.31% | 18.50% | |
62 Neutral | C$5.60B | 15.59 | 16.92% | ― | 5.63% | -65.53% | |
61 Neutral | C$1.28B | 28.07 | 6.30% | 1.74% | 0.80% | -66.47% | |
58 Neutral | C$8.53B | 21.55 | 10.57% | 2.66% | 5.15% | -27.32% |
* Industrials Sector Average
TSE:EFN
Element Fleet Management
21.80
-14.53
-40.00%
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Element Fleet Management Corporate Events
Business Operations and Strategy
Element Deepens Waymo Partnership to Support Toronto Autonomous Fleet
Positive
Oct 16, 2026
Element Fleet Management is deepening its strategic partnership with autonomous driving specialist Waymo, taking on end-to-end fleet management and intelligent mobility responsibilities for Waymo’s planned ride-hailing launch in Toronto, its...
Business Operations and StrategyExecutive/Board Changes
Element Adds Tech Veteran James Lee to Board to Bolster Digital Strategy
Positive
Sep 1, 2026
Element Fleet Management has appointed technology executive James Lee to its board of directors, adding a seasoned operational leader with significant experience at Bentley Systems, Google Cloud, and SAP. The move underscores Element’s focus...
Business Operations and StrategyExecutive/Board Changes
Element Reshapes Leadership to Drive Next-Stage Growth in Fleet and Mobility
Positive
Aug 26, 2026
Element Fleet Management announced a series of senior leadership changes aimed at accelerating its next phase of growth in fleet management and intelligent mobility. The moves concentrate commercial, technology, and mobility responsibilities under...
Business Operations and StrategyM&A Transactions
Element Tables All-Cash Bid for ANZ Fleet Manager FleetPartners
Positive
Aug 10, 2026
Element Fleet Management has made a non-binding, all-cash proposal to acquire Australia- and New Zealand-based FleetPartners Group for A$3.80 per share, valuing the target at about A$820 million and offering a 34.3% premium to its recent undisturb...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Element Fleet Management posts strong Q2 2026 results and expands mobility strategy
Positive
Aug 5, 2026
Element Fleet Management reported adjusted net revenue of $318 million for Q2 2026, up 10% year over year, with services revenue rising 8% to $164 million as vehicles under management grew 3% to 1.561 million. Adjusted diluted EPS increased 12% to...
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.