The energy services and technology company Pason Systems (TSX:PSI) is in Calgary. This business offers data management solutions for drilling rigs in Canada, the US, and other countries. Today, I want to talk about Pason Systems’ intriguing trajectory in 2022 and assess if it will be profitable to buy. Let’s plunge in.
How has Pason Systems performed in 2022?
At the close of business on November 25, shares of Pason Systems had increased 36% in 2022. The stock has increased 10% month over month. It’s interesting to note that the price of this energy company is still below the 52-week high it hit during its two increases in the spring. On the back of skyrocketing oil and gas prices, energy stocks were burning hot in the first half of 2022. That pace slowed in the second part of the year due to rising interest rates, additional supply, and growing concerns about an impending recession.
This stock has regained its spark after cratering in late September. Its shares may have more room to run in the months ahead.
Why I am excited about this stock for the long term
The future of the oil and gas data management sector should thrill Canadian investors. In the years to come, Canada’s economy will continue to be significantly fueled by the oil and gas industry. Over time, this industry’s growth will support technical advancement and increase earnings.
Early in 2022, Allied Market Research published a report on this sector. In 2020, the oil and gas data management market was anticipated to be worth $15.8 billion. By 2030, the market is predicted to grow to $92.3 billion. That translates to a 19% compound annual growth rate (CAGR).
Should investors be happy about Pason Systems’ recent earnings?
On November 2, the business disclosed its third-quarter (Q3) fiscal 2022 results. From Q3 2021 to Q3 2022, total revenue increased by 60% to $92.5 million. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It tries to provide a fuller view of a business’s profitability. The adjusted EBITDA for Pason Systems increased by 107% to $46.2 million. Additionally, it recorded a cash flow from operations of $35.9 million, or $0.43 per diluted share — an increase from $19.9 million, or $0.24 per diluted share, the year before.
Pason Systems reported a total revenue increase of 67% to $240 million in the first nine months of the current fiscal year. Adjusted EBITDA, meanwhile, increased by 129% to $110 million. The oil and gas business has improved, there is more demand for this company’s goods and technologies, and it has “solid competitive positioning and operating leverage.” Overall, Pason Systems had a profitable quarter.
Is this stock a buy today?
The current price-to-earnings ratio for Pason Systems stock is 16. It trades in more desirable value territory compared to its competitors in the same sector. The quarterly dividend for this energy stock increased from $0.08 to $0.12 per share. That equals a yield of 2.9%. In late November, I plan to purchase this intriguing TSX stock.