Disclosure: Enterprise Group, Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price and Volume (1-year)
* Enterprise Group has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in C$ except commodity prices which are in US$.
We are benchmarking E against a broad spectrum of oil and gas equipment and service providers, with MCAPs from $50M to $2.5B
Enterprise vs Larger Players
E recorded 5% revenue growth in 2025, outperforming the 3% sector average
Source: FRC / S&P Capital IQ
We are projecting 11% revenue growth for E in 2026 vs a 7% sector average
E’s gross margins are in line with the sector average
With a lower debt-to-capital ratio, we believe E has a healthier balance sheet
Source: FRC / S&P Capital IQ
Despite its attractive metrics, the stock has lagged peers, declining 40% YoY, compared with a 47% gain for the sector, making it the worst performer on our list of Oil and Gas Equipment and Service companies, with no clear justification, highlighting potential upside
Financials
Following a 3% YoY decline in 2025 (9M), a strong Q4 lifted full-year revenue to 5% YoY growth, exceeding our estimate by 2%
Gross margins fell 4 pp YoY to 41%, slightly below our forecast of 42%
*Sector: Oil & Gas Machinery Rental and Leasing
G&A expenses rose 25% YoY, coming in 2% above our estimate
EPS declined 39% YoY to $0.05/share, vs our forecast of $0.06, primarily due to lower gross margins
CAPEX surged 110% YoY to $33M, largely driven by the FlexEnergy acquisition in Q2
Debt-to-capital remained flat YoY, and below the sector average of 35%, indicating a healthy balance sheet
Source: FRC / Company
Oil & Gas Price Outlook
Source: FRC/ Sproule / GLJ
Consensus near- and long-term price forecasts remain well above 10-year averages ($64/bbl for oil and $1.82/mmbtu for gas), supporting a positive outlook for the oilfield services sector
Note that these consensus forecasts are as of January 2026, and do not reflect recent market developments; we expect actual 2026 prices to be significantly higher
Source: FRC/Various
E's revenue generally tracks changes in oil and gas prices, and sector CAPEX spending
Historically, a 1.0% change in oil and gas prices, and CAPEX spending, has led to a 1.2% change in E's revenue
FRC Projections and Valuation
Following the recent oil price surge and anticipated higher activity in 2026, we are revising our revenue forecast upward, while lowering EPS, due to weaker gross margins
Source: FRC
As a result, our DCF valuation declined from $2.89 to $2.73/share
Source: FRC / S&P Capital IQ
Sector multiples are up 8% since our previous report in November 2025
Source: FRC
Our fair value decreased from $2.38 to $2.10/share, driven by our lower EBITDA forecasts, partially offset by higher sector multiples
We are reiterating our BUY rating, and adjusting our fair value estimate from $2.3 8 to $2. 10 /share (the average of our DCF and comparables valuations). Strong Q4 performance reversed early 2025 weakness, delivering full-year revenue growth, while maintaining a healthy balance sheet. Although near-term geopolitical tensions could cause stock price volatility, we anticipate record revenue and EBITDA in 2026. Overall, the stock remains underappreciated by the market.
Risks
We believe the company is exposed to the following key risks (not exhaustive):
Maintaining our risk rating of 3 (Average)
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