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Pason Systems
(TSX:PSI)
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Rating:77Outperform
Price Target:
C$16.50
â–²(11.34% Upside)
Action:Reiterated
Date:08/17/26
The score is driven primarily by strong financial quality (low leverage, durable profitability, and solid cash generation) and a generally positive earnings call emphasizing margin strength and a multi-year growth plan. Technicals are supportive but look overbought, and valuation is supported by the dividend yield but tempered by a ~23.9 P/E and recent normalization in growth and margins.
Positive Factors
Very low leverage and strong financial flexibility
A debt-light balance sheet reduces refinancing risk and preserves flexibility to fund technology, acquisitions, dividends and buybacks. This strengthens resilience through oilfield cycles and supports continued investment without relying heavily on external capital.
Negative Factors
Recent revenue growth has flattened
Recent stagnation suggests the established business is increasingly tied to drilling activity and may face limits from a mature customer base or softer industry conditions. Without renewed adoption or activity growth, earnings expansion could remain constrained.
Read all positive and negative factors
Positive Factors
Negative Factors
Very low leverage and strong financial flexibility
A debt-light balance sheet reduces refinancing risk and preserves flexibility to fund technology, acquisitions, dividends and buybacks. This strengthens resilience through oilfield cycles and supports continued investment without relying heavily on external capital.
Read all positive factors
Pason Systems (PSI) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.14B
Dividend Yield3.54%
Average Volume (3M)296.03K
Price to Earnings (P/E)24.1
Beta (1Y)0.57
Revenue Growth-2.41%
EPS Growth-34.17%
CountryCA
Employees940
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.61
Shares Outstanding77,640,290
10 Day Avg. Volume280,407
30 Day Avg. Volume296,033
Financial Highlights & Ratios
PEG Ratio-0.32
Price to Book (P/B)1.95
Price to Sales (P/S)2.25
P/FCF Ratio14.28
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$16.00Price Target Upside7.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.82
Revenue Forecast (FY)C$424.04M
Pason Systems Business Overview & Revenue Model
Company Description
Pason Systems Inc., founded in Calgary, Canada, in 1978, is an energy technology and services provider specializing in data management systems for drilling rigs. Serving exploration and production operators, drilling contractors, and other oilfiel...
How the Company Makes Money
Pason makes money primarily by selling and supporting drilling-data acquisition and communications solutions used on active drilling rigs. Its revenue model is largely activity-driven: when rigs are operating and equipped with Pason systems, the c...
Pason Systems Earnings Call Summary
Earnings Call Date:Aug 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial update: consolidated revenue and adjusted EBITDA rose, North American drilling delivered strong operating leverage and record revenue per industry day, funds flow improved markedly, and the balance sheet is strong with no debt. Offsetting items include softer international activity, higher depreciation/amortization tied to recent acquisitions and investments, modest free cash flow after capex and increased accounts receivable, and the lower-margin nature of earlier-stage growth segments. Management emphasized disciplined capital allocation and a clear multi-year growth strategy.Positive Updates
Consolidated Revenue Growth
Consolidated revenue of $101.0M in Q2 2026, a 5% increase versus $96.4M in Q2 2025.
Negative Updates
International Drilling Weakness
International Drilling revenue declined to $13.1M from $13.6M (≈ -3.7% YoY); gross profit decreased to $6.0M from $6.4M, driven by softer activity in regions such as Argentina where customer shifts reduced active rig counts.
Read all updates
Q2-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Consolidated revenue of $101.0M in Q2 2026, a 5% increase versus $96.4M in Q2 2025.
Read all positive updates
Company Guidance
Pason's forward-looking guidance emphasized disciplined investment and growth targets: management reiterated a medium‑term goal to double oil & gas well‑construction revenue from 2023 levels over a 5–7 year horizon, maintained the quarterly dividend at $0.13 per share, and expects 2026 capital expenditures of roughly $60–$70 million; they also noted a historical rule‑of‑thumb that the North American drilling segment can deliver ~75% incremental margins on an additional $50 million of revenue (while consolidated incremental adjusted‑EBITDA margin in Q2 was 95%). The company pointed to growth levers (scaling completions, higher adoption and price realization of drilling products, new technologies like the mud analyzer, international expansion, and adjacent data management) and supported its guidance with Q2 operating metrics—consolidated revenue $101.0M, adjusted EBITDA $35.7M (35.4% of revenue), North American revenue $67.1M and record revenue per industry day $1.08k (+5% y/y), completion revenue $15.9M with 31 average active jobs and $5.63k revenue per IWS day (+11% y/y), funds from operations $33.5M (+27% y/y), net capex $17.1M, free cash flow $3.5M, operating cash $20.5M, ending cash $68.3M, working capital $107M, no interest‑bearing debt, and $11.5M returned to shareholders in the quarter (dividends $10.1M, buybacks $1.4M).Pason Systems Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
90
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 412.90M | 419.27M | 414.13M | 369.31M | 335.00M | 206.69M |
| Gross Profit | 181.49M | 187.55M | 361.95M | 203.67M | 191.72M | 93.33M |
| EBITDA | 138.54M | 142.90M | 149.94M | 161.50M | 160.26M | 80.19M |
| Net Income | 47.60M | 53.15M | 121.50M | 97.54M | 107.62M | 33.84M |
Balance Sheet | ||||||
| Total Assets | 606.17M | 596.95M | 614.61M | 487.88M | 469.93M | 379.94M |
| Cash, Cash Equivalents and Short-Term Investments | 68.27M | 77.14M | 80.78M | 171.77M | 172.43M | 158.28M |
| Total Debt | 27.49M | 27.53M | 15.42M | 12.99M | 5.53M | 7.33M |
| Total Liabilities | 118.56M | 124.83M | 118.94M | 86.92M | 88.97M | 72.16M |
| Stockholders Equity | 498.73M | 482.24M | 504.41M | 408.06M | 386.48M | 311.48M |
Cash Flow | ||||||
| Free Cash Flow | 48.85M | 65.91M | 51.26M | 94.12M | 69.91M | 54.14M |
| Operating Cash Flow | 98.98M | 117.68M | 123.19M | 135.03M | 104.41M | 65.06M |
| Investing Cash Flow | -49.86M | -52.45M | -155.58M | -13.06M | -92.23M | -27.08M |
| Financing Cash Flow | -51.23M | -63.80M | -63.37M | -65.82M | -42.06M | -27.05M |
Pason Systems Technical Analysis
Positive
14.82
Price Trends
13.26
Positive
13.46
Positive
12.84
Positive
Market Momentum
0.46
Negative
60.49
Neutral
86.26
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PSI, the sentiment is Positive. The current price of 14.82 is above the 20-day moving average (MA) of 14.13, above the 50-day MA of 13.26, and above the 200-day MA of 12.84, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 60.49 is Neutral, neither overbought nor oversold. The STOCH value of 86.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PSI.
Pason Systems 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% | 1.35% | 21.71% | 40.07% | |
77 Outperform | C$1.14B | 24.10 | 9.71% | 3.53% | -2.41% | -34.17% | |
71 Outperform | C$707.61M | 11.40 | 8.75% | 9.98% | -14.91% | 442.58% | |
70 Outperform | C$1.34B | 14.88 | 12.81% | 3.42% | 20.43% | -20.30% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | C$3.75B | 41.16 | 5.26% | 0.55% | 9.33% | -59.43% |
* Energy Sector Average
TSE:PSI
Pason Systems
14.70
3.62
32.72%
TSE:CFW
Calfrac Well Services
7.01
3.76
115.49%
TSE:EFX
Enerflex
30.75
16.77
119.93%
TSE:TOT
Total Energy Services
32.88
20.19
159.18%
TSE:TCW
Trican Well Service
6.40
0.83
14.98%
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.