Section1: Company Overview and Fundamental Insights:

1.1 Company Overview:

Calfrac Well Services Ltd (TSX: CFW) provides specialized oilfield services, including hydraulic fracturing, coiled tubing, cementing, and other well completion services to the oil and natural gas industries in Canada, the United States, Russia, and Argentina. It generates maximum revenue from the United States. Kalkine’s Investor Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock. 

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~63.44% of the total shareholding. G2S2 Capital Inc and Mathison (Ronald P) holds a maximum stake in the company at ~­­­32.87% and ~11.17%, respectively.

1.4 Key Metrics:

In addition to reporting sound financial results for the third quarter of 2023, the company's margin profile showed sequential growth, which is a significant plus. Additionally, it reported a decrease in its debt-to-equity ratio in Q3 2023, which is a big plus that highlights its resilience and strength. The company also clocked decent liquidity ratios in Q3 2023 along elevated cash from operations as well.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of the company’s recent activities, such as an announcement regarding its improvement in working capital and an amendment to its credit facility.

2.2 Insights on Q3 2023 Financial Performance:

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed an upside of ~1.01% and ~9.40% over the last 1 month and 3 months respectively. Moreover, the stock is trading above the average 52-week high price of CAD 6.2 and 52-week low price of CAD 3.70 providing an opportunity to ride the trend. Calfrac Well Services Ltd (TSX: CFW) was last covered on 23^rd January 2024.

4.2 Fundamental Valuation

Valuation Methodology: EV to EBITDA Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 23, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement.  

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.