STEP ENERGY SERVICES LTD (STEP.CA) Stock Fundamental Analysis
TSX:STEP - Toronto Stock Exchange - CA85859H1055 - Common Stock - Currency: CAD
We assign a fundamental rating of 4 out of 10 to STEP. STEP was compared to 27 industry peers in the Energy Equipment & Services industry. The financial health of STEP is average, but there are quite some concerns on its profitability. STEP has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year STEP was profitable.
STEP had a positive operating cash flow in the past year.
In multiple years STEP reported negative net income over the last 5 years.
In the past 5 years STEP always reported a positive cash flow from operatings.
1.2 Ratios
STEP's Return On Assets of -2.17% is on the low side compared to the rest of the industry. STEP is outperformed by 88.89% of its industry peers.
STEP has a Return On Equity of -3.93%. This is amonst the worse of the industry: STEP underperforms 85.19% of its industry peers.
STEP has a worse Return On Invested Capital (6.08%) than 66.67% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for STEP is in line with the industry average of 10.68%.
The 3 year average ROIC (11.56%) for STEP is well above the current ROIC(6.08%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.17% | ||
| ROE | -3.93% | ||
| ROIC | 6.08% |
ROA(3y)7.5%
ROA(5y)-1.64%
ROE(3y)15.21%
ROE(5y)-5.71%
ROIC(3y)11.56%
ROIC(5y)N/A
1.3 Margins
STEP has a worse Operating Margin (4.68%) than 70.37% of its industry peers.
STEP's Gross Margin of 9.38% is on the low side compared to the rest of the industry. STEP is outperformed by 81.48% of its industry peers.
STEP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.68% | ||
| PM (TTM) | N/A | ||
| GM | 9.38% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y75.97%
GM growth 5Y63.02%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), STEP is creating some value.
Compared to 1 year ago, STEP has less shares outstanding
Compared to 5 years ago, STEP has more shares outstanding
Compared to 1 year ago, STEP has an improved debt to assets ratio.
2.2 Solvency
STEP has an Altman-Z score of 2.10. This is not the best score and indicates that STEP is in the grey zone with still only limited risk for bankruptcy at the moment.
STEP's Altman-Z score of 2.10 is fine compared to the rest of the industry. STEP outperforms 62.96% of its industry peers.
The Debt to FCF ratio of STEP is 2.80, which is a good value as it means it would take STEP, 2.80 years of fcf income to pay off all of its debts.
STEP has a Debt to FCF ratio of 2.80. This is in the better half of the industry: STEP outperforms 70.37% of its industry peers.
STEP has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.26, STEP is in the better half of the industry, outperforming 62.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.8 | ||
| Altman-Z | 2.1 |
ROIC/WACC0.68
WACC8.92%
2.3 Liquidity
STEP has a Current Ratio of 1.55. This is a normal value and indicates that STEP is financially healthy and should not expect problems in meeting its short term obligations.
STEP's Current ratio of 1.55 is in line compared to the rest of the industry. STEP outperforms 48.15% of its industry peers.
A Quick Ratio of 1.32 indicates that STEP should not have too much problems paying its short term obligations.
STEP has a better Quick ratio (1.32) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
The earnings per share for STEP have decreased strongly by -83.51% in the last year.
STEP shows a decrease in Revenue. In the last year, the revenue decreased by -5.98%.
The Revenue has been growing slightly by 7.40% on average over the past years.
EPS 1Y (TTM)-83.51%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-40%
Revenue 1Y (TTM)-5.98%
Revenue growth 3Y21.21%
Revenue growth 5Y7.4%
Sales Q2Q%-3.87%
3.2 Future
Based on estimates for the next years, STEP will show a very strong growth in Earnings Per Share. The EPS will grow by 26.83% on average per year.
STEP is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -3.79% yearly.
EPS Next Y52.55%
EPS Next 2Y37.07%
EPS Next 3Y26.83%
EPS Next 5YN/A
Revenue Next Year-7.74%
Revenue Next 2Y-3.51%
Revenue Next 3Y-2.9%
Revenue Next 5Y-3.79%
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 28.13, STEP can be considered very expensive at the moment.
Based on the Price/Earnings ratio, STEP is valued a bit more expensive than 70.37% of the companies in the same industry.
STEP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.46.
With a Price/Forward Earnings ratio of 6.30, the valuation of STEP can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of STEP indicates a somewhat cheap valuation: STEP is cheaper than 74.07% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.44. STEP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.13 | ||
| Fwd PE | 6.3 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STEP indicates a rather cheap valuation: STEP is cheaper than 88.89% of the companies listed in the same industry.
STEP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. STEP is cheaper than 62.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.13 | ||
| EV/EBITDA | 3.22 |
4.3 Compensation for Growth
STEP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
STEP's earnings are expected to grow with 26.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.54
PEG (5Y)N/A
EPS Next 2Y37.07%
EPS Next 3Y26.83%
5. Dividend
5.1 Amount
STEP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:STEP (7/21/2025, 7:00:00 PM)
4.5
-0.11 (-2.39%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners16.68%
Inst Owner ChangeN/A
Ins Owners1.44%
Ins Owner ChangeN/A
Market Cap326.83M
Analysts76.92
Price Target5.06 (12.44%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.97%
Min EPS beat(2)-7.56%
Max EPS beat(2)17.5%
EPS beat(4)2
Avg EPS beat(4)-33.51%
Min EPS beat(4)-144.39%
Max EPS beat(4)17.5%
EPS beat(8)4
Avg EPS beat(8)-51.13%
EPS beat(12)7
Avg EPS beat(12)-20.89%
EPS beat(16)10
Avg EPS beat(16)-22.6%
Revenue beat(2)1
Avg Revenue beat(2)6.41%
Min Revenue beat(2)-4.42%
Max Revenue beat(2)17.23%
Revenue beat(4)2
Avg Revenue beat(4)2.78%
Min Revenue beat(4)-4.42%
Max Revenue beat(4)17.23%
Revenue beat(8)3
Avg Revenue beat(8)0.72%
Revenue beat(12)4
Avg Revenue beat(12)-0.41%
Revenue beat(16)7
Avg Revenue beat(16)0.57%
PT rev (1m)0.72%
PT rev (3m)-4.14%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.41%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.21%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-4.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.13 | ||
| Fwd PE | 6.3 | ||
| P/S | 0.35 | ||
| P/FCF | 8.13 | ||
| P/OCF | 2.72 | ||
| P/B | 0.83 | ||
| P/tB | 0.83 | ||
| EV/EBITDA | 3.22 |
EPS(TTM)0.16
EY3.56%
EPS(NY)0.71
Fwd EY15.87%
FCF(TTM)0.55
FCFY12.29%
OCF(TTM)1.65
OCFY36.76%
SpS12.98
BVpS5.41
TBVpS5.4
PEG (NY)0.54
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.17% | ||
| ROE | -3.93% | ||
| ROCE | 8.44% | ||
| ROIC | 6.08% | ||
| ROICexc | 6.1% | ||
| ROICexgc | 6.11% | ||
| OM | 4.68% | ||
| PM (TTM) | N/A | ||
| GM | 9.38% | ||
| FCFM | 4.26% |
ROA(3y)7.5%
ROA(5y)-1.64%
ROE(3y)15.21%
ROE(5y)-5.71%
ROIC(3y)11.56%
ROIC(5y)N/A
ROICexc(3y)11.63%
ROICexc(5y)N/A
ROICexgc(3y)11.64%
ROICexgc(5y)N/A
ROCE(3y)16.05%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y75.97%
GM growth 5Y63.02%
F-Score6
Asset Turnover1.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.8 | ||
| Debt/EBITDA | 0.75 | ||
| Cap/Depr | 84.71% | ||
| Cap/Sales | 8.48% | ||
| Interest Coverage | 4.73 | ||
| Cash Conversion | 86.74% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.32 | ||
| Altman-Z | 2.1 |
F-Score6
WACC8.92%
ROIC/WACC0.68
Cap/Depr(3y)106.24%
Cap/Depr(5y)77.9%
Cap/Sales(3y)9.8%
Cap/Sales(5y)8.23%
Profit Quality(3y)1036.34%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-83.51%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-40%
EPS Next Y52.55%
EPS Next 2Y37.07%
EPS Next 3Y26.83%
EPS Next 5YN/A
Revenue 1Y (TTM)-5.98%
Revenue growth 3Y21.21%
Revenue growth 5Y7.4%
Sales Q2Q%-3.87%
Revenue Next Year-7.74%
Revenue Next 2Y-3.51%
Revenue Next 3Y-2.9%
Revenue Next 5Y-3.79%
EBIT growth 1Y-58.45%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year104.61%
EBIT Next 3Y28.74%
EBIT Next 5Y14.58%
FCF growth 1Y-54.35%
FCF growth 3Y33.78%
FCF growth 5Y19.89%
OCF growth 1Y-35.15%
OCF growth 3Y35.4%
OCF growth 5Y15.87%