Pason Systems (TSX:PSI) is a Calgary-based energy services and technology company that provides data management systems for drilling rigs in Canada, the United States, and around the world. Shares of this energy and tech stock have dropped 23% in 2023 as of close on April 26. The stock is down 24% year over year. Today, I want to discuss whether this stock is worth snatching up ahead of its first quarter fiscal 2023 earnings report.
This company released its fourth quarter and full year fiscal 2022 earnings on March 2, 2023. In Q4 2022, the company posted total revenue growth of 50% to $94.4 million. Meanwhile, adjusted EBITDA climbed 102% to $48.9 million. It reported funds flow from operations (FFO) of $45.9 million or $0.56 per diluted share – up from $19.3 million or $0.23 per diluted share in the fourth quarter of fiscal 2021.
For the full year, Pason Systems achieved total revenue growth of 62% to $334 million. Moreover, adjusted EBITDA increased 120% to $159 million. Free cash flow jumped 28% to $70.4 million.
Looking ahead, management expects the company to see softer growth in the first quarter of fiscal 2023. However, the company expects activity to receive a bump in the second half of the fiscal year.
Shares of Pason Systems currently possess a very favourable price-to-earnings ratio of 8.9. This stock offers a quarterly dividend of $0.12 per share. That represents a very solid 4.1% yield. Pason Systems may need to overcome softer conditions in the first half of fiscal 2023, but business still looks strong going forward. I’m looking to snatch up this undervalued stock in the middle of the spring season.
