A Fresh Valuation Look at Total Energy Services (TSX:TOT) After Q3 Results, Backlog Records, and Expansion Plans

Total Energy Services (TSX:TOT) just reported its third-quarter results, sparking investor attention as revenues improved while net income declined. Management highlighted a record fabrication backlog along with new capital investments for ongoing upgrades.

See our latest analysis for Total Energy Services.

Total Energy Services has caught the eye this year, with its latest results and expansion plans driving renewed investor interest. Despite navigating margin pressures and mixed North American activity, the company’s momentum is clear. A recent 1-month share price return of 7.3% and year-to-date gain of 20.7% highlight growing optimism. Long-term investors have seen an impressive 26.1% total shareholder return over the past year, and a remarkable five-year total return of 487% underscores the company’s broad recovery and growth trajectory.

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With shares trading well below analyst targets despite notable operational gains and an impressive long-term track record, investors now face a key decision: is Total Energy Services undervalued at current levels, or is future growth already priced in?

Most Popular Narrative: 21.5% Undervalued

With Total Energy Services’ widely followed narrative placing fair value at $18 per share, the current close of $14.13 leaves plenty of room for upside if the key assumptions hold true. The sharp difference between market price and projected value is fueling debate about the catalysts driving future growth.

The company is experiencing strong and growing demand for large-horsepower compression equipment, driven by the expansion of North American LNG export capacity and increased use of natural gas for power generation. This growth, supported by a record CPS segment backlog now exceeding $300 million and further capacity additions, points toward continued revenue growth and gross margin expansion as the energy infrastructure build-out continues.

Read the complete narrative.

Curious about the earnings roadmap behind this bold valuation? This narrative relies on a combination of rising margin projections, aggressive expansion, and falling share count to justify the price gap. Which specific numbers carry the biggest weight? Dive in to see which financial forecasts could flip the story on its head.

Result: Fair Value of $18 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistently weak activity in U.S. markets or aggressive competitor pricing could undermine the expected growth and compress margins more than analysts anticipate.

Find out about the key risks to this Total Energy Services narrative.

Build Your Own Total Energy Services Narrative

If you see things differently or want to follow your own analysis, it’s easy to dig into the numbers and assemble your own thesis in just a few minutes. Do it your way

A great starting point for your Total Energy Services research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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