Original-Research: Zefiro Methane Corp. (von GBC AG): BUY

Classification of GBC AG to Zefiro Methane Corp.

Company Name:	Zefiro Methane Corp.
ISIN:	CA98926D1069
Reason for the research:	Research Report (Initial Coverage)
Recommendation:	BUY
Target price:	1.50 USD
Target price on sight of:	31.12.2027
Last rating change:
Analyst:	Cosmin Filker, Matthias Greiffenberger

Operational turnaround in a structurally growing market
Zefiro Methane Corp. is a publicly-traded environmental services provider focused on the U.S. market and specializing in the identification, measurement, and reduction of methane emissions from decommissioned, abandoned, and orphaned oil and gas wells. Operational activities are now largely consolidated within Plants & Goodwin, whilst the wireline and downhole services acquired as part of the AWS acquisition have been integrated into P&G from an operational perspective. In addition, the company develops and markets emission credits derived from verifiably avoided methane emissions. In this way, Zefiro combines a project-based service business with the prospect of additional, high-margin revenue from the voluntary carbon credit market.
The company addresses a legacy issue in the North American oil and gas industry. In the U.S., there are millions of inactive, abandoned, or improperly sealed wells from which methane and other gases can continue to escape. This poses risks to soil, groundwater, and the use of affected properties. Since there is no longer a responsible or solvent operator to be held accountable for remediation for orphan wells, decommissioning must be financed through government programs. The density of problematic wells is particularly high in the Appalachian Basin. In this region, Zefiro already has operational teams, equipment, permits, and long-standing relationships with customers and regulatory agencies. Additional demand is generated by private energy producers as well as infrastructure and data center projects, the implementation of which can be delayed by unremediated legacy wells.
Zefiro’s historical business performance was initially strongly influenced by the establishment of the current corporate structure, which includes, in particular, the acquisitions of P&G and AWS. In each of the past two fiscal years, revenue has been slightly above USD 32 million, but the operating result has been negative in both years. Since the management change in June 2025, however, a clear turnaround in operating performance has become apparent. The new management has focused on cash-flow-generating core services and reduced non-strategic costs. In the first nine months of fiscal year 2025/26, revenue rose by 35.8% to USD 33.19 million, while EBITDA improved significantly to USD 3.10 million (previous year: -USD 5.52 million). The adjusted EBITDA reported by Zefiro stood at USD 4.25 million. At the same time, positive operating cash flow of USD 4.12 million was generated, and financial debt was significantly reduced.
Our forecasts are based both on projects already secured and on the expected utilization of their expanded equipment and rig capacity. According to the company, the acquisition of five rigs and supplementary equipment from Viking Well Service has also expanded annual revenue capacity by approximately USD 10 million. For fiscal year 2025/26, we expect revenue of 45.18 million USD and EBITDA of 3.73 million USD. For fiscal year 2026/27, we forecast revenue to rise to 57.92 million USD and EBITDA to reach 10.02 million USD. In 2027/28, we expect revenue of USD 66.85 million and EBITDA of USD 12.22 million. Additional earnings momentum could result from the resumption of the carbon credit business starting in the second half of fiscal year 2026/27.
As part of our DCF valuation model, in which we have also taken into account the most recent capital increases (net proceeds: USD 5.20 million), we have arrived at a target price of USD 1.50 per share. We therefore assign a BUY rating.

You can download the research here: 20260721_Zefiro_IC_engl
Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Disclosure of potential conflicts of interest pursuant to Section 85 of the German Securities Trading Act (WpHG) and Article 20 of the Market Abuse Regulation (MAR) The following potential conflict of interest exists in relation to the company analysed above: (5a,11); A list of potential conflicts of interest can be found at: https://www.gbc-ag.de/de/Offenlegung
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Completion: 20/07/2026 (08:25 am)
First distribution: 21/07/2026 (09:00 am)