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Source Energy Services Ltd
(TSX:SHLE)
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Rating:49Neutral
Price Target:
C$10.00
▼(-13.42% Downside)
Action:Reiterated
Date:11/01/26
The score is held back primarily by weakening TTM financial performance (return to net losses, margin compression, and negative free cash flow) and a weak technical trend (below key moving averages with negative MACD). The earnings call adds some support via constructive 2H commentary and strong U.S. operational momentum, but valuation remains unattractive due to negative earnings and no stated dividend yield.
Positive Factors
U.S. Growth and Contracting
U.S. mine-gate sales rising more than 60x and fully contracted Sahara units indicate a meaningful geographic growth channel. This diversification can offset Canadian cyclicality, improve asset utilization, and provide a more durable revenue base as U.S. activity continues.
Negative Factors
Canadian Volume and EBITDA Decline
The sharp Canadian volume decline and $16.7 million adjusted EBITDA reduction show that weaker completion activity is translating directly into lower operating profitability. Persistent softness would reduce fixed-cost absorption and make recovery dependent on a sustained improvement in regional activity.
Read all positive and negative factors
Positive Factors
Negative Factors
U.S. Growth and Contracting
U.S. mine-gate sales rising more than 60x and fully contracted Sahara units indicate a meaningful geographic growth channel. This diversification can offset Canadian cyclicality, improve asset utilization, and provide a more durable revenue base as U.S. activity continues.
Read all positive factors
Source Energy Services Ltd (SHLE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$133.39M
Dividend YieldN/A
Average Volume (3M)8.26K
Price to Earnings (P/E)―
Beta (1Y)1.43
Revenue Growth-20.49%
EPS Growth-133.03%
CountryCA
Employees556
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)-0.98
Shares Outstanding13,077,755
10 Day Avg. Volume2,014
30 Day Avg. Volume8,260
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.97
Price to Sales (P/S)0.29
P/FCF Ratio6.59
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-0.75
Revenue Forecast (FY)C$612.75M
Source Energy Services Ltd Business Overview & Revenue Model
Company Description
Source Energy Services Ltd. is a major supplier of Northern White frac sand, a specialized material essential for hydraulic fracturing in the upstream oil and gas sector. The company's operations span Western Canada and the United States, where it...
Source Energy Services Ltd Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Neutral
The quarter shows a balanced mix of clear operational and market challenges in Canada (notably a 24% decline in volumes and a $16.7M drop in adjusted EBITDA) alongside offsetting strengths: a dramatic increase in U.S. mine gate sales (60x), strong U.S. terminal utilization, successful execution of large wet-sand jobs, and maintained liquidity and capital guidance. Management expects improvement in H2 and has actionable growth levers (wet-sand demand, Montney exposure, chemical transloading). Given material negative year-over-year financial impacts but meaningful positive operational offsets and constructive forward commentary, the call conveys a cautiously balanced outlook.Positive Updates
Significant U.S. Mine Gate Sales Growth
Reported a more than 60x increase in U.S. mine gate sales in Q2 2026, providing meaningful offset to weaker Canadian activity and contributing to overall sand revenue strength.
Negative Updates
Sales Volume Decline
Total sales volume declined to 831,000 tonnes in Q2 2026, a 24% decrease versus Q2 2025, driven by weaker natural gas-based completion activity in Western Canada.
Read all updates
Q2-2026 Updates
Positive
Negative
Significant U.S. Mine Gate Sales Growth
Reported a more than 60x increase in U.S. mine gate sales in Q2 2026, providing meaningful offset to weaker Canadian activity and contributing to overall sand revenue strength.
Read all positive updates
Company Guidance
Source provided full‑year CapEx guidance of $30–40 million (likely toward the mid‑to‑upper end) and said the capital program is front‑end loaded with a much smaller spend in 2H focused on overburden removal and customer‑funded projects; quarter‑end available liquidity was $27 million. Management expects Canadian volumes to pick up in 2H‑2026 with continued demand for wet and dry domestic northern white (but tempered overall Canadian volumes due to some cancellations and M&A uncertainty), while the strong U.S. mine‑gate sales that rose more than 60x year‑over‑year in Q2 are expected to continue and the company is quoting volumes into 2027. Operational metrics noted in guidance include Sahara utilization at 45% in Canada and 100% contracted in the U.S., a recent 71,000‑tonne wet sand job completed in 23 days, an anticipated Peace River ramp in Q3, and the view that 2027 industry volumes should be above 2025 and 2026 — with basin demand potentially rising from roughly 8–9 million today toward 15–16 million over the next five years.Source Energy Services Ltd Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
52
Neutral
Cash Flow
48
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 587.19M | 700.30M | 673.95M | 569.75M | 415.91M | 319.86M |
| Gross Profit | 63.56M | 93.86M | 127.34M | 109.41M | 58.15M | 39.33M |
| EBITDA | 81.93M | 114.22M | 102.69M | 223.89M | 55.51M | 36.89M |
| Net Income | -12.98M | 33.08M | 9.51M | 167.34M | -2.93M | -56.11M |
Balance Sheet | ||||||
| Total Assets | 592.68M | 617.13M | 598.22M | 482.83M | 326.90M | 266.03M |
| Cash, Cash Equivalents and Short-Term Investments | 2.04M | 19.90M | 32.72M | 0.00 | -68.42M | -38.44M |
| Total Debt | 291.53M | 277.25M | 274.87M | 221.78M | 295.66M | 221.47M |
| Total Liabilities | 390.45M | 408.24M | 408.35M | 313.70M | 321.24M | 259.50M |
| Stockholders Equity | 202.23M | 208.90M | 189.87M | 169.13M | 5.66M | 6.53M |
Cash Flow | ||||||
| Free Cash Flow | -10.13M | 30.76M | 51.06M | 28.98M | 65.01M | 7.49M |
| Operating Cash Flow | 62.13M | 90.61M | 94.39M | 51.09M | 80.17M | 14.01M |
| Investing Cash Flow | -68.32M | -59.35M | -27.06M | -13.20M | -13.90M | -6.00M |
| Financing Cash Flow | -35.16M | -43.25M | -34.61M | -67.04M | -66.28M | -8.01M |
Source Energy Services Ltd Technical Analysis
Neutral
11.55
Price Trends
10.50
Negative
11.74
Negative
13.85
Negative
Market Momentum
-0.10
Negative
53.20
Neutral
84.96
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SHLE, the sentiment is Neutral. The current price of 11.55 is above the 20-day moving average (MA) of 9.71, above the 50-day MA of 10.50, and below the 200-day MA of 13.85, indicating a neutral trend. The MACD of -0.10 indicates Negative momentum. The RSI at 53.20 is Neutral, neither overbought nor oversold. The STOCH value of 84.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:SHLE.
Source Energy Services Ltd Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$1.47B | 16.65 | 14.51% | 1.14% | 21.71% | 40.07% | |
76 Outperform | C$1.42B | 13.71 | 15.61% | 3.15% | 14.96% | -10.01% | |
72 Outperform | C$4.42B | 22.54 | 23.68% | 0.99% | 10.96% | 13.96% | |
71 Outperform | C$789.37M | 12.72 | 8.75% | 9.98% | -14.91% | 442.58% | |
66 Neutral | C$4.04B | 43.80 | 6.01% | 0.51% | -4.14% | -47.81% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
49 Neutral | C$133.39M | -10.41 | -6.25% | ― | -20.49% | -133.03% |
* Energy Sector Average
TSE:SHLE
Source Energy Services Ltd
10.20
-2.41
-19.11%
TSE:CEU
CES Energy Solutions
20.96
11.63
124.65%
TSE:CFW
Calfrac Well Services
7.82
4.76
155.81%
TSE:EFX
Enerflex
33.05
14.91
82.22%
TSE:TOT
Total Energy Services
40.30
25.93
180.50%
TSE:TCW
Trican Well Service
6.99
1.90
37.19%
Source Energy Services Ltd Corporate Events
Financial Disclosures
Source Energy Services Sets Date for Q3 2026 Results and Investor Call
Neutral
Oct 5, 2026
Source Energy Services Ltd., a TSX‑listed energy services company, specializes in the integrated production and distribution of frac sand and other bulk completion materials for the oil and gas sector. Its operations span Wisconsin and Peace...
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.