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1. Company Snapshot

1.a. Company Description

CES Energy Solutions Corp., together with its subsidiaries, designs, implements, and manufactures advanced consumable fluids and specialty chemicals.It provides solutions for drill-bit, point of completion and stimulation, wellhead and pump-jack, and pipeline and midstream markets.The company's solutions include corrosion inhibitors, demulsifiers, H2S scavengers, paraffin control products, surfactants, scale inhibitors, biocides, and other specialty products.


It also designs and implements drilling fluid systems and completion solutions for oil and gas producers; designs and manufactures production and specialty chemicals for use in the oil and natural gas production markets, the stimulation and fracturing markets, and the pipeline and midstream markets; and operates trucks and trailers to transport products in the oil and gas industry.In addition, the company provides environmental consulting, water management services, and drilling fluids waste disposal services primarily to oil and gas producers; and laboratory services.It serves oil and natural gas industry, including multinational producers, intermediate oil and natural gas operators, independent juniors, and joint ventures, as well as pipeline and mid-stream markets in western Canada and the United States.


The company was formerly known as Canadian Energy Services & Technology Corp.and changed its name to CES Energy Solutions Corp.in June 2017.


CES Energy Solutions Corp.was incorporated in 1986 and is headquartered in Calgary, Canada.

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1.b. Last Insights on CEU

CES Energy Solutions Corp.'s recent performance was driven by strong Q2 2025 results, with record revenue and EPS beating expectations. The company's robust financials, coupled with a quarterly dividend of $0.0425 per share, have garnered attention. Management's appetite for growth through tuck-in acquisition opportunities in related business lines or new markets is expected to boost returns. A recent upgrade to outperform at National Bank of Canada further supports the company's prospects. The CEO's focus on leveraging their platform and expanding into new areas signals potential for future growth.

1.c. Company Highlights

2. CES Energy Solutions' Q2 2025 Earnings: A Strong Performance

CES Energy Solutions reported a robust Q2 2025, with revenue reaching $574 million, a 3.5% increase from Q2 2024. The company's quarterly EBITDA was $88.3 million, representing a 15.4% margin. Earnings per share (EPS) came in at $0.2311, beating analyst estimates of $0.2225. The company's financial performance was driven by record revenues in both the U.S. and Canada, with U.S. revenue reaching $405.6 million and Canadian revenue reaching $168.4 million.

Publication Date: Aug -26

📋 Highlights
  • Revenue Growth:: Q2 2025 revenue reached $574M, a 3.5% increase YoY with U.S. revenue at $405.6M and Canada at $168.4M.
  • EBITDA Margin:: Quarterly EBITDA of $88.3M achieved a 15.4% margin, with total debt to EBITDA at 1.25x within the 1x–1.5x target range.
  • Share Repurchases:: Completed 19.2M share buybacks under NCIB, now renewed for up to 18.9M shares ahead of July 2026 expiry.
  • Market Share:: 28.2% North American land rig share (198 rigs), with U.S. land rigs at 25% (#1 market share) and PureChem division growth.
  • Capital Efficiency:: Cash conversion cycle improved to 112 days, with each 1% improvement translating to ~$23M in balance sheet value.

Debt and Capital Allocation

The company's debt to trailing 12 months EBITDA ratio stood at 1.25x, within its targeted range of 1x to 1.5x. CES Energy Solutions has demonstrated a commitment to returning capital to shareholders, having completed its NCIB program and repurchased 19.2 million shares. The company has renewed the program to repurchase up to 18.9 million shares, indicating its confidence in its financial position and future prospects.

Operational Highlights

The company's Canadian Drilling Fluids division continues to lead the WCSB in market share, while the PureChem division has maintained its growth trajectory. In the U.S., the AES division holds a #1 market share of U.S. land rigs at 25%. The Jacam Catalyst division is also growing, with investments in CapEx and personnel to support high activity levels. As the company noted, "We're comfortable with our current debt level and leverage, enabling strong returns of capital to shareholders through sustainable dividends and share buybacks, as well as strategic acquisitions."

Valuation and Outlook

With a P/E Ratio of 9.94, P/B Ratio of 2.32, and EV/EBITDA of 6.2, CES Energy Solutions appears to be reasonably valued. The company's ROIC of 17.14% and ROE of 23.21% indicate strong profitability. Analysts estimate revenue growth of 3.2% for next year, suggesting a stable outlook. Overall, CES Energy Solutions' strong financial performance, solid operational highlights, and reasonable valuation suggest a positive outlook for the company.

3. NewsRoom

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CES Energy Solutions (TSX:CEU): Assessing Valuation After Recent Share Price Momentum

Nov -15

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CES ENERGY SOLUTIONS CORP. ANNOUNCES STRONG Q3 2025 RESULTS WITH RECORD ADJUSTED EBITDAC AND DECLARES CASH DIVIDEND

Nov -13

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CES ENERGY SOLUTIONS CORP. ANNOUNCES CLOSING OF $75 MILLION REOPENING OF SENIOR UNSECURED NOTES

Oct -23

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CES ENERGY SOLUTIONS CORP. ANNOUNCES OFFERING AND PRICING OF $75 MILLION REOPENING OF SENIOR UNSECURED NOTES

Oct -15

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CES ENERGY SOLUTIONS CORP. PROVIDES Q3 2025 CONFERENCE CALL DETAILS

Oct -09

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CES Energy Solutions (TSX:CEU) Valuation in Focus Following Fresh Acquisition Strategy Signals from Management

Aug -22

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CES Energy Solutions Second Quarter 2025 Earnings: EPS Beats Expectations

Aug -13

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CES Energy Solutions Corp. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Aug -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Consumable Fluids and Specialty Chemicals

Expected Growth: 4.0%

CES Energy Solutions Corp.'s Consumable Fluids and Specialty Chemicals segment growth is driven by increasing demand for drilling and completion fluids in the oil and gas industry, coupled with growing adoption of specialty chemicals in industrial and manufacturing processes. Additionally, the company's expanding product portfolio and strategic acquisitions are contributing to the 4.0% growth rate.

7. Detailed Products

Drilling Fluids

CES Energy Solutions Corp. offers a range of drilling fluids designed to optimize drilling performance, reduce costs, and minimize environmental impact.

Production Chemicals

CES Energy Solutions Corp. provides a suite of production chemicals to enhance oil and gas production, improve asset integrity, and reduce operating costs.

Cementing and Completion Fluids

CES Energy Solutions Corp. offers specialized cementing and completion fluids to ensure successful well completion and maximize hydrocarbon recovery.

Well Intervention Chemicals

CES Energy Solutions Corp. provides a range of well intervention chemicals to optimize well intervention operations, improve well productivity, and extend well lifespan.

Production Optimization Services

CES Energy Solutions Corp. offers production optimization services to enhance oil and gas production, reduce operating costs, and improve asset integrity.

8. CES Energy Solutions Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for CES Energy Solutions Corp. is medium due to the availability of alternative energy sources, but the company's focus on sustainable energy solutions reduces the impact of substitutes.

Bargaining Power Of Customers

The bargaining power of customers is low due to the company's strong relationships with its customers and the lack of buyer concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the company's dependence on a few key suppliers, but the company's strong relationships with its suppliers mitigate the risk.

Threat Of New Entrants

The threat of new entrants is high due to the growing demand for sustainable energy solutions and the relatively low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.88%
Debt Cost 11.99%
Equity Weight 61.12%
Equity Cost 15.98%
WACC 14.43%
Leverage 63.62%

11. Quality Control: CES Energy Solutions Corp. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Total Energy Services

A-Score: 7.2/10

Value: 8.8

Growth: 7.2

Quality: 5.7

Yield: 5.0

Momentum: 8.5

Volatility: 8.0

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Trican Well Service

A-Score: 7.0/10

Value: 7.1

Growth: 8.0

Quality: 7.0

Yield: 5.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

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Pason Systems

A-Score: 6.3/10

Value: 5.8

Growth: 5.9

Quality: 8.0

Yield: 7.0

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
CES Energy Solutions

A-Score: 6.2/10

Value: 6.3

Growth: 8.4

Quality: 5.7

Yield: 4.0

Momentum: 6.5

Volatility: 6.3

1-Year Total Return ->

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TerraVest

A-Score: 5.4/10

Value: 2.3

Growth: 9.3

Quality: 4.6

Yield: 1.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

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Solaris Oilfield

A-Score: 4.6/10

Value: 2.9

Growth: 6.2

Quality: 6.7

Yield: 5.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.95$

Current Price

12.95$

Potential

-0.00%

Expected Cash-Flows