Enerflex was actually one of our Bull list recommendations that we removed last year due to the oil and gas bear market. We typically tell members when we remove a stock from the Bull list, we don't mean we think people should sell it. However with Enerflex, we went straight to a bearish outlook. We also owned it in a model portfolio and ended up selling it.
The company has, to no surprise, been hit significantly by COVID-19. They reported Q2 revenue of $287 million, which is almost a 50% decrease year over year. Net earnings also plummeted from $40.6 million to $7.4 million.
If you're looking to invest in the company, it may be a long road to recovery. One glaring issue I see is the company's backlog has been crippled (backlog being work the company has contracted to perform in the future). It's gone from nearly $1 billion one year ago to $291.1 million when they reported Q2 earnings on June 30th.
Analysts expect revenue to drop by 43% this year, and next year by 47%. This is probably one of the main reasons the company looks insanely cheap on a trailing basis. 80% discount to its 5 year historical price to sales and a 90% discount to its historical price to earnings.
However, its trading at a premium compared to historical forward price to earnings. I personally think Enerflex is going to struggle moving forward.