Enerflex (TSX:EFX) has emerged as one of the top-performing TSX stocks. The energy services company’s stock has nearly doubled, rising 97.3% over the past year. Over the past three years, it has delivered a solid compound annual growth rate (CAGR) of 36.7%, translating into a total capital gain of more than 155%.
Behind Enerflex’s rising share price are strong customer demand, a growing backlog, improving fundamentals, and a strengthening balance sheet.
Enerflex is focused on developing and servicing sustainable energy infrastructure. Its offerings include processing, compression, cryogenic, and treated water solutions, all of which play key roles in energy production and management.
Enerflex’s Energy Infrastructure (EI) segment is key to its growth, adding stability to its operations by generating recurring revenue through long-term contracts. By owning, operating, and managing critical energy assets for its clients, the company ensures predictable cash flow and long-term visibility. Complementing this is the Engineered Systems (ES) division, which delivers customized modular solutions for natural gas handling and produced water treatment.
The After-market Services (AMS) division further strengthens Enerflex’s position, offering installation, commissioning, maintenance, and global parts support. Together, these segments create a diversified and resilient business model that reduces exposure to cyclical swings.
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The momentum in Enerflex’s business will sustain
The momentum in Enerflex’s business will likely sustain in the coming years, supported by solid fundamentals across its core segments. In the U.S., the company’s contract compression business continues to thrive on rising natural gas production in the Permian Basin. Utilization remains robust at 94% of the operating capacity. Enerflex is on track to expand its North American fleet to about 485,000 horsepower by the end of 2025, with further growth planned for 2026.
Enerflex is deepening relationships with midstream partners, many of which stem from its acquisition of Exterran, helping to secure additional orders for large compression equipment. Its Engineered Systems division is on solid financial footing, with a substantial backlog of $1.1 billion as of September 30, offering visibility into future revenue. Bookings of $339 million in the latest quarter reflect steady project replenishment, while a healthy pipeline of bids supports continued growth into the second half of 2026.
The company’s aftermarket services have benefited from higher maintenance and activity levels, trends expected to persist into 2026. Meanwhile, Enerflex’s Energy Infrastructure business also remains solid and adds stability, backed by $1.4 billion in contracted revenue and long-term international contracts averaging five years in duration.
Enerflex is well-positioned to capture the upside from expanding natural gas and produced water volumes. As Enerflex continues to reduce debt, improve profitability, and generate stronger free cash flow, it is likely to deliver above-average returns. Overall, with strong operations, a growing backlog, and disciplined financial management, Enerflex looks set to deliver healthy returns and sustained share price momentum in the years ahead.
Enerflex offers solid upside potential
Enerflex’s diversified business model, growing recurring business, strategic focus on sustainable energy infrastructure, and robust backlog position it well to deliver solid growth. Additionally, its stronger balance sheet puts EFX in a solid position to take advantage of the rising demand for natural gas and water treatment solutions.
Over the past three years, the stock has grown at a CAGR of 36.7%. Even if that pace slows to a more modest 20% CAGR, this TSX stock could still reach $32.64 in three years, reflecting an upside potential of about 73%.
