Step Energy Services Ltd T.STEP

Fair Value

[Whynottoday2]

......won't be long now! 

Oldie (7 days) but a goodie;

https://oilprice.com/Energy/Energy-General/Oilfield-Services-Are-Set-For-Years-Of-Profits.html

[viper2000]

what do you think fair value for step is?

[EstevanOutsider]

Based on $150M debt (they paid $30M in Q1) and $165M EBITDA, the stock is trading at 2.6x ev/ebitda while Trican is trading at 7.5x. So far value would be at least $12 and it will be even higher next year if EBITDA is $180-200M.  

[viper2000]

good to hear this stock is definitely flying under most peoples radar do you think it can hit 12 this year?

[EstevanOutsider]

i think we'll see a couple more price target hikes and step could push $8-10 this year. q2 and q3 are both going to probably be ebitda beats and also more importantly, margin growth. the blueberry first nation issue is expected to be resolved and i was told today there is elvated activity for frackers aroudn fort saint john area that hasn't been there latelly. all in all great news.

[viper2000]

thanks for the insight what other oil stocks do you own?

[Whynottoday2]

$8, $10, $12..... all north of Morningstar's Take of $6.05. Hmmmm! Would have to say there is an 80-1 Rich Strike chance of a M&A and $12+ plays out!!

[EstevanOutsider]

RBC report from Friday has STEP's upside target at $10 based on $159M 2023 EBITDA and a 4.5x ev/ebitda multiple which is lower than even junk Calfrac. I predict that STEP's 2023 EBITDA will be higher than $180M with improved margins. I also think RBC will be revising their 2022 EBITDA forecasts for Q2, Q3 & Q4, all of which could be company records. STEP should be above $12. It's

[Whynottoday2]

RBC Cap Mar - "US frac market consolidation could reduce industry fragmentation and encourage industry pricing discipline".........buckle up! 

[Whynottoday2]

  Morningstar Fair Value now $6.52 US DUC completions have fallen from 48% in October 2020 to 7% in April 2022, nuts!  ....will be amazed if STEP makes it passed September.