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1. Company Snapshot

1.a. Company Description

Element Fleet Management Corp.operates as a fleet management company primarily in Canada, the United States, Mexico, Australia, and New Zealand.The company offers fleet management services comprising vehicle acquisition, financing, program management, and remarketing services to corporate, commercial, government, and public service vehicle fleets.


It serves construction, energy, oil and gas, food and beverage, healthcare, services, transportation, and utility industries.Element Fleet Management Corp.is headquartered in Toronto, Canada.

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1.b. Last Insights on EFN

Element Fleet Management Corp.'s recent performance was driven by a solid Q1 2025 earnings release, which showcased the company's financial and operational resilience. Net revenues grew 5% year-over-year, driven by growth across all categories, despite an unfavorable foreign currency translation impact. Adjusted operating expense growth moderated to 5%, indicating cost discipline. The company's business model has demonstrated strength in uncertain market conditions. Additionally, Element's recent partnership with Samsara to launch a comprehensive fleet and operations management offering across Canada and the United States is expected to enhance its offerings and drive growth.

1.c. Company Highlights

2. Element Fleet Management's Q3 2025 Earnings Shine with Double-Digit Growth

Element Fleet Management reported a robust Q3 2025 with net revenue reaching $306 million, a 10% year-over-year increase, driven by strong contributions across all revenue categories. Services revenue was $156 million, up 6% year-over-year, while net financing revenue grew 12% year-over-year to $130 million. The company's core NFR yield expanded to 4.85% in Q3, up 41 basis points year-over-year. Adjusted operating income, earnings per share, and free cash flow per share all saw double-digit growth year-over-year. The company's adjusted operating margin was 58%, and earnings per share was $0.33, up 14% year-over-year, slightly below estimates of $0.4695, with actual EPS coming in at $0.4596.

Publication Date: Nov -16

📋 Highlights
  • Net Revenue Growth:: $306 million, representing a 10% year-over-year increase.
  • Services Revenue:: $156 million, up 6% YoY, driven by client expansion and service adoption.
  • Net Financing Revenue:: $130 million, a 12% YoY rise, reflecting strong portfolio performance.
  • Client Acquisition:: 38 new clients and 278 new service enrollments in Q3 2025.
  • Shareholder Returns:: $61 million returned via dividends and share repurchases, alongside 14% EPS growth to $0.33.

Business Growth and Client Acquisition

The company added 38 new clients and 278 new service enrollments in the quarter, a testament to its growing presence in the market. Strategic advisory services identified $349 million in fleet cost savings opportunities, with 46% actioned, further solidifying Element's value proposition to its clients. The company's digital transformation is also progressing, with a new mobile app and digital ordering platform launched, aimed at enhancing customer experience and operational efficiency.

Digital Transformation and Industry Recognition

Element's Autofleet technology platform earned industry recognition and advanced partnerships, including a new partnership with InDrive, highlighting the company's innovative approach to fleet management. This recognition and the resulting partnerships are likely to drive future growth and expand Element's offerings in the market.

Valuation and Outlook

With a P/E Ratio of 24.64 and an ROE of 14.68%, Element's valuation reflects a premium for its growth prospects. Analysts estimate next year's revenue growth at 10.7%, suggesting that the company's momentum is expected to continue. Element generated an adjusted return on equity of 18.8% and returned $61 million to shareholders through dividends and share repurchases, indicating a strong commitment to shareholder value. The company's confidence in its momentum heading into Q4 is well-founded, given its track record of execution and the ongoing digital transformation.

3. NewsRoom

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Element Fleet Management (TSE:EFN) Has Affirmed Its Dividend Of $0.13

Dec -03

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Element to acquire Car IQ, creating the fleet industry's first scaled platform for intelligent, vehicle-initiated payments

Dec -02

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Element Fleet Management (TSX:EFN): Is the Stock Undervalued After Its Recent Pullback?

Nov -23

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Element Announces Proposed Private Offering of Senior Notes

Nov -19

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“The Great Mobility Shift: The Next Era of Automotive Transformation”: Element Fleet Management shares the latest insights on trends transforming fleet and mobility through 2035

Nov -18

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Element Announces Renewal of Normal Course Issuer Bid

Nov -18

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Element Fleet Management (TSE:EFN) Is Paying Out A Dividend Of $0.13

Nov -16

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ECN Capital to be taken private in deal led by Warburg Pincus

Nov -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.25%)

6. Segments

Rental

Expected Growth: 8.9%

The 8.9% growth in rental from Element Fleet Management Corp. is driven by increasing demand for fleet management services, expansion into new markets, and a growing trend towards outsourcing fleet management. Additionally, the company's focus on technology and data analytics has improved operational efficiency, leading to higher revenue growth.

Interest Income

Expected Growth: 8.85%

Element Fleet Management Corp.'s 8.85% interest income growth is driven by increasing fleet size, rising interest rates, and improved credit quality. Additionally, the company's focus on diversified funding sources, efficient asset utilization, and strategic partnerships have contributed to the growth. Furthermore, the company's ability to optimize its portfolio mix and effectively manage risk has also supported the interest income growth.

Depreciation of Equipment under Operating Leases

Expected Growth: 5.15%

The 5.15% growth in Depreciation of Equipment under Operating Leases from Element Fleet Management Corp. is driven by increasing fleet size, higher utilization rates, and a shift towards longer-term leases. Additionally, the company's focus on expanding its services to new markets and industries, such as electric vehicles, is contributing to the growth.

Service

Expected Growth: 10.55%

Element Fleet Management Corp.'s 10.55% growth is driven by increasing demand for fleet management services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on technology innovation, cost savings, and sustainability initiatives have contributed to its growth. Furthermore, the rising need for fleet electrification and alternative fuel solutions has also boosted the company's growth prospects.

Gain on Sale of Equipment under Operating Leases

Expected Growth: 8.95%

The 8.95% growth in Gain on Sale of Equipment under Operating Leases from Element Fleet Management Corp. is driven by increasing demand for fleet management services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization and process efficiencies has improved remarketing capabilities, leading to higher gains on equipment sales.

Vehicle and End of Contract Fees

Expected Growth: 4.65%

Element Fleet Management Corp.'s 4.65% growth in Vehicle and End of Contract Fees is driven by increasing fleet sizes, higher mileage rates, and extended contract terms. Additionally, the company's focus on digitalization and process efficiencies has led to improved pricing power and reduced costs, contributing to the growth.

Syndication

Expected Growth: 8.95%

Element Fleet Management Corp.'s 8.95% growth in syndication is driven by increasing demand for fleet management services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization, cost savings, and risk management has improved operational efficiency, leading to higher revenue and profitability.

7. Detailed Products

Fleet Management Solutions

Element Fleet Management Corp. offers a comprehensive fleet management solution that helps businesses to manage their vehicle fleets efficiently. The solution includes services such as vehicle acquisition, financing, maintenance, and disposal.

Vehicle Financing

Element Fleet Management Corp. provides vehicle financing solutions to businesses, including leasing and loan options, to help them acquire the vehicles they need to operate.

Fuel Management

Element Fleet Management Corp. offers a fuel management solution that helps businesses to manage their fuel expenses, reduce fuel waste, and optimize their fuel usage.

Telematics and Analytics

Element Fleet Management Corp. provides telematics and analytics solutions that help businesses to track their vehicle fleets, monitor driver behavior, and gain insights into their operations.

Vehicle Maintenance and Repair

Element Fleet Management Corp. offers vehicle maintenance and repair services to help businesses to keep their vehicles in good condition, reduce downtime, and extend the life of their vehicles.

Vehicle Disposal

Element Fleet Management Corp. provides vehicle disposal services to help businesses to dispose of their vehicles in an environmentally responsible manner.

8. Element Fleet Management Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Element Fleet Management Corp. operates in a niche market, providing fleet management services to commercial fleets. While there are substitutes available, such as in-house fleet management or other third-party providers, the company's specialized services and expertise provide a competitive advantage, reducing the threat of substitutes.

Bargaining Power Of Customers

Element Fleet Management Corp.'s customers are typically large commercial fleets, which have limited bargaining power due to their dependence on the company's specialized services. This reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Element Fleet Management Corp. relies on a network of suppliers for vehicle procurement, maintenance, and other services. While the company has some bargaining power due to its scale, suppliers still have some negotiating power, particularly in the procurement of specialized vehicles.

Threat Of New Entrants

The fleet management industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise. This reduces the threat of new entrants.

Intensity Of Rivalry

The fleet management industry is highly competitive, with several established players competing for market share. Element Fleet Management Corp. faces intense rivalry from competitors, which can lead to pricing pressure and increased marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.47%
Debt Cost 6.98%
Equity Weight 26.53%
Equity Cost 8.10%
WACC 7.27%
Leverage 276.92%

11. Quality Control: Element Fleet Management Corp. passed 4 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

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Volatility: 10.0

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Yield: 6.0

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A-Score: 4.9/10

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Yield: 5.0

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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

36.46$

Current Price

36.46$

Potential

-0.00%

Expected Cash-Flows