Wajax Corporation (WJX) AI Stock Analysis

• Market Cap: C$500.59M
• Dividend Yield: 5.91%
• Average Volume (3M): 36.58K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 1.11
• Revenue Growth: 2.19%
• EPS Growth: -48.80%
• Country: CA
• Employees: 2,900
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.75
• Shares Outstanding: 21,745,686
• 10 Day Avg. Volume: 24,631
• 30 Day Avg. Volume: 36,576
• 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$24.50
• Price Target Upside: 3.46% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 73 Outperform
• Price Target: ―

Wajax Corporation's overall stock score of 73 reflects a mixed landscape. The company shows strong financial performance with solid profitability and stable leverage, though revenue and net income fluctuations pose challenges. The technical analysis suggests bearish signals with the stock trading below key moving averages. Valuation metrics are attractive, with a low P/E ratio and high dividend yield. The earnings call highlighted positive revenue growth and cost management, but declining gross profit margins and earnings raise concerns. Overall, while there are strengths, challenges remain, warranting a balanced outlook.

Positive Factors

Revenue Growth

The increase in revenue, especially from mining equipment sales, indicates strong demand and market position in the mining sector, supporting long-term growth.

Cost Management

Effective cost management through reduced selling and administrative expenses enhances profitability and operational efficiency, benefiting long-term financial health.

Inventory Management

Significant inventory reduction reflects improved operational efficiency and cash flow management, positioning the company well for future demand fluctuations.

Negative Factors

Gross Profit Margin Decline

The decline in gross profit margin due to market pressures and sales mix changes could impact long-term profitability and competitive positioning.

Decline in ERS Sales

A significant drop in ERS sales suggests challenges in maintaining market share and demand, potentially affecting future revenue streams.

Adjusted EBITDA and Net Earnings Decline

The decline in adjusted EBITDA and net earnings indicates financial strain, which could hinder investment in growth initiatives and shareholder returns.

Wajax Corporation Business Overview & Revenue Model

Company Description

Wajax Corporation is a leading Canadian distributor and service provider that operates in three core sectors: Equipment, Power Systems, and Industrial Components. The company offers a wide range of products and services, including heavy equipment for construction and forestry, industrial components for various industries, and power systems for energy needs. Wajax serves diverse sectors such as mining, oil and gas, construction, and manufacturing, providing both sales and after-market support.

How the Company Makes Money

Wajax Corporation generates revenue primarily through the sale and leasing of equipment and machinery, along with providing related services such as maintenance and repair. The company's key revenue streams include the distribution of new and used equipment, sale of industrial components, and provision of power systems. Wajax also earns income from service contracts, parts sales, and technical support services. Strategic partnerships with leading equipment manufacturers and a strong network of suppliers are significant contributors to its earnings, enabling Wajax to offer a comprehensive portfolio of products and solutions to its customers across Canada.

Wajax Corporation Financial Statement Overview

Summary

Wajax Corporation displays a solid financial standing with strong profitability and stable leverage. The income statement shows a strong gross profit margin but indicates some pressure on profitability due to a decline in net income. The balance sheet reveals a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. Although revenue growth is positive, the decline from 2023 to 2024 raises concerns. The cash flow statement demonstrates recovering operating cash flow, though growth is inconsistent. Overall, vigilance over rising debt levels and strategic financial adjustments are crucial.

Income Statement

Wajax Corporation's income statement shows a strong gross profit margin, which remains stable over recent years. However, the net profit margin has decreased recently due to a decline in net income, indicating some pressure on profitability. Revenue growth has been positive, but the decline from 2023 to 2024 raises concerns. The absence of EBIT in 2024 is notable, but the EBITDA margin remains healthy, reflecting solid operating performance.

Balance Sheet

The company's balance sheet reveals a moderate debt-to-equity ratio, reflecting a balanced approach to leveraging. Return on equity is commendable, demonstrating efficient use of equity financing. However, the slight increase in total debt over the years suggests rising financial obligations. The equity ratio indicates a stable capital structure, though vigilance over rising liabilities is warranted.

Cash Flow

Wajax Corporation's cash flow statement demonstrates a recovering operating cash flow following a negative period in 2023. Free cash flow is positive, indicating strong cash generation capabilities, though growth remains inconsistent. The operating cash flow to net income ratio highlights a positive conversion, yet fluctuations in financing cash flow suggest variable financial strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.15B	2.10B	2.15B	1.96B	1.64B	1.42B
Gross Profit	397.57M	413.78M	444.19M	390.31M	331.85M	261.96M
EBITDA	145.27M	156.13M	194.71M	169.69M	147.92M	117.13M
Net Income	36.04M	42.79M	80.99M	72.41M	53.25M	31.65M
Balance Sheet
Total Assets	1.43B	1.55B	1.47B	1.25B	1.08B	981.39M
Cash, Cash Equivalents and Short-Term Investments	0.00	7.35M	0.00	-158.45M	9.99M	6.63M
Total Debt	479.30M	548.20M	500.87M	303.04M	321.58M	379.25M
Total Liabilities	903.13M	1.04B	977.08M	800.11M	690.93M	655.74M
Stockholders Equity	521.98M	512.28M	496.24M	449.77M	389.91M	325.65M
Cash Flow
Free Cash Flow	129.85M	60.81M	-98.85M	59.12M	182.81M	108.12M
Operating Cash Flow	140.18M	69.95M	-89.00M	69.13M	190.15M	118.81M
Investing Cash Flow	-3.00M	156.00K	-24.63M	-14.35M	-62.58M	-17.64M
Financing Cash Flow	-140.85M	-61.36M	117.47M	-70.00M	-124.20M	-97.72M

Wajax Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WJX, the sentiment is Positive. The current price of 23.68 is above the 20-day moving average (MA) of 23.44, above the 50-day MA of 23.06, and above the 200-day MA of 20.62, indicating a bullish trend. The MACD of 0.13 indicates Positive momentum. The RSI at 57.88 is Neutral, neither overbought nor oversold. The STOCH value of 46.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WJX.

Wajax Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIH	76 Outperform	12.42B	25.15	16.16%	1.34%	6.99%	-5.58%
MTL	74 Outperform	1.21B	12.18	9.88%	6.04%	5.52%	-18.01%
WJX	73 Outperform	C$500.59M	13.98	6.93%	5.91%	2.19%	-48.80%
RBA	73 Outperform	30.41B	57.44	7.24%	1.01%	7.80%	17.65%
CNR	66 Neutral	80.31B	17.78	21.19%	2.73%	0.63%	-14.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Wajax Corporation Corporate Events

Wajax Corporation Reports 2024 Financial Results Amid Market Challenges

Wajax Corporation reported a challenging 2024 with a 2.6% decline in annual revenue and a decrease in gross profit margin due to weakened market conditions and increased competitive pressures. Despite these challenges, the company managed to generate strong cash flows in the fourth quarter through effective working capital management and cost-saving initiatives, while also reducing its leverage ratio and inventory levels. The company plans to continue focusing on strategic priorities to improve margins and operational efficiency in 2025.

Wajax Corporation to Release 2024 Financial Results on March 4

Wajax Corporation announced that it will release its fourth quarter and annual results for 2024 on March 4, 2025, before 9:30 a.m. ET, a revision from the previously scheduled post-market release on March 3, 2025. This announcement is significant as it aligns with the company’s strategy to provide timely financial information to its stakeholders, potentially impacting investor relations and market perception.