STEP Energy Services (STEP) AI Stock Analysis

• Market Cap: C$398.62M
• Dividend Yield: N/A
• Average Volume (3M): 40.59K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.18
• Revenue Growth: -6.25%
• EPS Growth: -129.86%
• Country: CA
• Employees: 1,251
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): N/A
• Shares Outstanding: 72,873,690
• 10 Day Avg. Volume: 20,203
• 30 Day Avg. Volume: 40,585
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$5.17
• Price Target Upside: -5.48% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 63 Neutral
• Price Target: C$6.00 ▲(9.69% Upside)

The overall stock score reflects a mixed outlook for STEP Energy Services. The company's financial performance is challenged by declining revenues and profitability, but it shows resilience in cash management and leverage improvement. Technical analysis indicates strong bullish momentum, which is a positive factor. Valuation remains a concern due to negative earnings and lack of dividends. The earnings call provides a cautiously optimistic outlook, focusing on operational efficiency and market positioning.

Positive Factors

Debt Reduction

The significant reduction in net debt enhances financial stability and flexibility, allowing STEP Energy Services to allocate resources more effectively towards strategic initiatives and growth opportunities.

Technological Innovation

The development of NGx positions STEP Energy Services as a leader in sustainable fracturing solutions, potentially increasing market share and client retention by offering environmentally friendly options.

Market Positioning

A strong market position in the Montney region provides STEP Energy Services with a competitive advantage, enabling the company to capitalize on growth opportunities in the Canadian fracturing market.

Negative Factors

Revenue Decline

The decline in revenue reflects challenges in maintaining sales momentum, which could impact the company's ability to invest in growth and innovation if the trend continues.

Margin Pressure

Decreasing margins indicate cost pressures and pricing challenges, which can erode profitability and limit the company's ability to fund strategic initiatives.

Termination of U.S. Operations

The cessation of U.S. operations reduces geographic diversification and revenue streams, potentially increasing reliance on the Canadian market and exposing the company to regional risks.

STEP Energy Services Business Overview & Revenue Model

Company Description

STEP Energy Services Ltd., an oilfield service company, provides integrated coiled tubing, fracturing, and wireline solutions to service the oil and gas industry in Canada and the United States. It also provides chemical laboratory solutions; fluid pumping services for coiled tubing operations and standalone projects; and nitrogen pumping solutions for coiled tubing and hydraulic fracturing operations, as well as cased hole wireline and open hole wireline services. STEP Energy Services Ltd. was incorporated in 2011 and is headquartered in Calgary, Canada.

How the Company Makes Money

STEP Energy Services makes money through the provision of specialized oilfield services, including coiled tubing, fluid and nitrogen pumping, and hydraulic fracturing. The company primarily generates revenue by offering these services to exploration and production companies within the oil and gas industry. Revenue streams are driven by contracts and agreements with oil and gas producers that require these technical services to enhance their operational capabilities. Additionally, STEP may engage in partnerships or strategic alliances that enable it to expand its service offerings or enter new markets, thereby contributing to its earnings. The company's financial performance is influenced by factors such as oil and gas prices, demand for its services, and its ability to maintain and grow its client base.

STEP Energy Services Financial Statement Overview

Summary

STEP Energy Services faces challenges with declining revenues and profitability, as reflected in the negative net profit margin and revenue growth rate. However, the company has managed to improve its leverage position and maintain positive cash flow growth, indicating resilience in cash management. The balance sheet shows a strong equity base, but the negative return on equity highlights the need for improved profitability.

Income Statement

STEP Energy Services has experienced a significant decline in revenue growth, with a TTM revenue decrease of 35.8%. The gross profit margin has also decreased to 9.36% from 11.54% in the previous year. The net profit margin has turned negative at -1.64%, indicating a loss. Despite these challenges, the company maintains a positive EBITDA margin of 10.98%, suggesting some operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.29, reflecting a reduction in leverage compared to previous years. However, the return on equity is negative at -3.92%, indicating challenges in generating returns for shareholders. The equity ratio stands at 63.69%, showing a solid equity base relative to total assets.

Cash Flow

STEP Energy Services has shown a positive free cash flow growth rate of 13.58% in the TTM period. The operating cash flow to net income ratio is strong at 0.63, indicating robust cash generation relative to net income. The free cash flow to net income ratio is 0.33, suggesting effective cash management despite net income losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	939.19M	954.97M	945.72M	989.02M	536.31M	368.94M
Gross Profit	84.50M	110.19M	116.14M	147.59M	17.76M	-33.41M
EBITDA	96.05M	129.35M	163.31M	221.38M	54.55M	-41.74M
Net Income	-20.06M	1.76M	50.42M	94.78M	-28.13M	-119.36M
Balance Sheet
Total Assets	613.52M	580.63M	606.52M	682.53M	483.85M	479.86M
Cash, Cash Equivalents and Short-Term Investments	3.23M	4.36M	1.78M	2.79M	3.70M	1.27M
Total Debt	69.37M	84.47M	113.63M	162.98M	205.33M	220.35M
Total Liabilities	222.82M	210.11M	250.97M	376.50M	306.41M	275.28M
Stockholders Equity	390.70M	370.53M	355.55M	306.03M	177.44M	204.58M
Cash Flow
Free Cash Flow	45.64M	51.72M	66.43M	39.62M	21.60M	28.98M
Operating Cash Flow	112.65M	146.06M	171.61M	122.60M	58.85M	46.80M
Investing Cash Flow	-67.62M	-92.57M	-108.98M	-66.44M	-30.71M	-16.55M
Financing Cash Flow	-44.64M	-50.98M	-63.90M	-57.77M	-25.67M	-36.50M

STEP Energy Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:STEP, the sentiment is Positive. The current price of 5.47 is above the 20-day moving average (MA) of 5.42, above the 50-day MA of 4.86, and above the 200-day MA of 4.37, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 74.90 is Negative, neither overbought nor oversold. The STOCH value of 73.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:STEP.

STEP Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOT	―	C$521.72M	8.11	11.66%	2.77%	14.74%	62.76%
SHLE	―	C$151.52M	3.85	20.27%	―	18.15%	-75.41%
TCW	―	$1.24B	10.71	18.06%	3.81%	9.24%	6.35%
Sector *	―	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
STEP	―	C$398.62M	-19.56	-5.02%	―	-6.25%	-129.86%
CFW	―	C$273.99M	27.79	1.53%	―	-4.63%	-92.13%
HWO	―	$10.41M	0.39	-2.30%	―	-82.87%	―

STEP Energy Services Corporate Events

STEP Energy Services to Go Private in $5.50 Per Share Deal with ARC Financial

STEP Energy Services Ltd. has entered into a definitive agreement with ARC Financial Corp. to take the company private in an all-cash transaction valued at $5.50 per share. This arrangement, unanimously approved by STEP’s board, represents a 29% premium over the company’s previous closing price and is expected to close in December 2025. The transaction highlights significant support from minority shareholders and does not require ARC to obtain financing, indicating a strategic move to maximize shareholder value.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$5.50 price target. To see the full list of analyst forecasts on STEP Energy Services stock, see the TSE:STEP Stock Forecast page.

STEP Energy Services Receives Acquisition Offer from ARC Financial

STEP Energy Services Ltd. has received a non-binding offer from ARC Financial Corp. to acquire the remaining common shares not already owned by ARC for $5.50 per share. A special committee of independent directors has been formed to review the offer, with financial and legal advisors engaged to assist in the process. The outcome of the offer remains uncertain, with no assurance of a binding agreement or transaction approval.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$4.50 price target. To see the full list of analyst forecasts on STEP Energy Services stock, see the TSE:STEP Stock Forecast page.

STEP Energy’s Earnings Call: Tech Gains Amid Financial Strains

STEP Energy’s recent earnings call painted a mixed picture for investors, highlighting both technological progress and financial hurdles. While the introduction of NGx technology and increased operational efficiency were celebrated, these advancements were tempered by declining revenue, EBITDA, and net income, alongside the cessation of U.S. fracturing operations and broader market uncertainties.

STEP Energy Services Reports Q2 2025 Financial Results

STEP Energy Services Ltd. reported its financial results for the second quarter of 2025, showing consolidated revenue of $228 million, slightly down from $231.4 million in the same period of 2024. The company’s net income decreased to $5.9 million from $10.5 million in the previous year, reflecting a challenging quarter marked by reduced activity levels compared to the first quarter, which is typically the busiest for the industry. Despite these challenges, STEP continues to maintain a strong operational presence with significant horsepower capacity and active coiled tubing units, positioning itself for future growth in the energy services sector.

The most recent analyst rating on (TSE:STEP) stock is a Hold with a C$5.00 price target. To see the full list of analyst forecasts on STEP Energy Services stock, see the TSE:STEP Stock Forecast page.