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APA (APA)
NASDAQ:APA
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APA
(NASDAQ:APA)68Neutral
Positive Factors
Cost Savings
APA announced a large cost-saving initiative that targets $350 million in annual savings by YE27 through reductions of overhead, LOE, and capital.
Financial Performance
The company had a strong quarter with total production of 488 Mboe/d, which was 2% above model and consensus estimates.
Negative Factors
Oil Volume Guidance
Operational woes continue as APA starts 2025 off with a weaker than expected oil production outlook.
APA (APA) vs. S&P 500 (SPY)
Market Cap
$6.76B
Dividend Yield5.38%
Average Volume (3M)8.73M
Price to Earnings (P/E)8.2
Beta (1Y)0.70
Revenue Growth17.61%
EPS Growth-75.78%
CountryUS
Employees2,271
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.25
Shares Outstanding364,064,330
10 Day Avg. Volume13,133,440
30 Day Avg. Volume8,726,306
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)N/A
Price to Sales (P/S)0.96
Price to Cash Flow (P/CF)1.60
P/FCF Ratio1.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$27.35Price Target Upside47.52% Upside
Rating ConsensusHold
Number of Analyst Covering20
APA Business Overview & Revenue Model
Company DescriptionAPA Corporation (APA) is a publicly traded energy company engaged in the exploration, development, and production of oil and natural gas. The company operates across various basins in the United States, as well as internationally, with significant operations in Egypt and offshore Suriname. APA focuses on leveraging its extensive portfolio of assets to deliver sustainable energy solutions while maximizing shareholder value.
How the Company Makes MoneyAPA Corporation generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids. The company's financial performance is heavily influenced by the global prices of these commodities, which are subject to market fluctuations. APA's key revenue streams include production from its diverse geographic asset base, including significant operations in the Permian Basin in the U.S., as well as in Egypt and Suriname. Additionally, the company enters into joint ventures and partnerships to optimize its exploration and production activities, which can enhance its revenue potential. Strategic capital investment in high-potential projects and efficient cost management also play crucial roles in APA's ability to generate earnings.
APA Financial Statement Overview
Summary
APA demonstrates solid profitability and cash flow generation, supporting its operations and potential future investments. While the balance sheet is stable, with a reasonable leverage level, revenue contraction poses a challenge. The company should focus on reversing the revenue decline to ensure sustained financial health.Income Statement
The company shows a strong gross profit margin of 57.73% and a net profit margin of 8.26% in the TTM, indicating good profitability. EBIT and EBITDA margins are also solid at 38.32% and 32.67% respectively. However, there is a decline in revenue compared to the previous year by 12.49%, which may pose a concern for future growth.76
Positive
Balance Sheet
The balance sheet displays a healthy equity ratio of 54.13%, suggesting a strong equity position. The debt-to-equity ratio is 0.57, indicating moderate leverage. Return on equity is 7.66%, which is decent, but there are potential risks associated with historical volatility in equity levels.68
Positive
Cash Flow
The cash flow statement reveals a robust free cash flow growth rate of 90.01% in the TTM, reflecting efficient cash management. The operating cash flow to net income ratio of 4.50 shows strong cash generation relative to profits. The free cash flow to net income ratio is 1.82, indicating substantial cash available after capital expenditures.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 9.74B | 8.28B | 11.07B | 7.99B | 4.43B | Gross Profit |
| 9.74B | 5.92B | 6.25B | 3.54B | 905.00M | EBIT |
| 0.00 | 5.21B | 4.00B | 1.56B | -1.60B | EBITDA |
| 4.17B | 4.75B | 7.61B | 3.88B | -2.31B | Net Income Common Stockholders |
| 804.00M | 2.85B | 3.60B | 1.14B | -4.90B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 625.00M | 87.00M | 245.00M | 302.00M | 262.00M | Total Assets |
| 19.39B | 15.24B | 13.15B | 13.30B | 12.75B | Total Debt |
| 6.16B | 5.30B | 5.45B | 7.51B | 8.77B | Net Debt |
| 5.54B | 5.22B | 5.21B | 7.21B | 8.51B | Total Liabilities |
| 13.03B | 11.55B | 11.80B | 14.02B | 13.39B | Stockholders Equity |
| 5.28B | 2.65B | 423.00M | -1.59B | -1.64B |
| Cash Flow | Free Cash Flow | |||
| 769.00M | 772.00M | 2.54B | 2.38B | 86.00M | Operating Cash Flow |
| 3.62B | 3.13B | 4.94B | 3.50B | 1.39B | Investing Cash Flow |
| -924.00M | -2.14B | -1.51B | -833.00M | -1.47B | Financing Cash Flow |
| -2.16B | -1.15B | -3.49B | -2.62B | 93.00M |
APA Technical Analysis
Negative
18.54
Price Trends
22.51
Negative
22.74
Negative
25.21
Negative
Market Momentum
-0.94
Positive
26.00
Positive
9.78
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APA, the sentiment is Negative. The current price of 18.54 is below the 20-day moving average (MA) of 21.89, below the 50-day MA of 22.51, and below the 200-day MA of 25.21, indicating a bearish trend. The MACD of -0.94 indicates Positive momentum. The RSI at 26.00 is Positive, neither overbought nor oversold. The STOCH value of 9.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for APA.
APA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $115.33B | 11.61 | 16.16% | 3.44% | -2.57% | -14.01% | |
77 Outperform | $22.23B | 7.51 | 21.77% | 4.23% | 3.00% | -21.63% | |
75 Outperform | $43.90B | 15.85 | 27.41% | 1.32% | 20.51% | 99.86% | |
74 Outperform | $67.64B | 10.85 | 22.29% | 3.03% | 0.88% | -13.66% | |
68 Neutral | $6.76B | 8.15 | 20.26% | 5.38% | 17.61% | -75.78% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% |
* Energy Sector Average
Performance Comparison
APA
APA
18.54
-10.92
-37.07%
COP
Conocophillips
88.88
-20.68
-18.88%
DVN
Devon Energy
33.87
-10.46
-23.60%
EOG
EOG Resources
121.85
7.25
6.33%
HES
Hess
141.34
-1.06
-0.74%
APA Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -15.77% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted APA Corporation's strategic achievements, including investment grade ratings, successful asset refinement, and significant free cash flow generation. The company is focusing on cost reduction and efficient capital allocation. However, challenges remain with liabilities from Fieldwood properties and receivables in Egypt.Highlights
Investment Grade Achievement
APA Corporation achieved a BBB- rating from S&P, making it investment grade with all three rating agencies.
Successful Strategic Refinement
APA continued to refine its position in the Permian with the acquisition of Cowen and the sale of non-core assets, solidifying the Permian as the cornerstone of its asset base.
Significant Free Cash Flow
The company generated $420 million of free cash flow during the fourth quarter, the highest of any quarter in 2024.
Gas Trading Success
APA realized an annual net gain of nearly half a billion dollars from gas trading activities in 2024, with expectations of $600 million for 2025.
Permian Basin Performance
APA's production volumes exceeded guidance in all operating regions, with significant well cost reductions in the Permian Basin.
Cost Reduction Initiatives
APA initiated cost-saving measures expected to generate at least $350 million in annualized savings by year-end 2027.
Lowlights
Fieldwood Properties Liability
A $190 million increase in the net liability for the Fieldwood properties was noted, reflecting high cash costs for asset management.
Egypt Receivables Challenge
Receivables in Egypt remain an issue, with no significant progress in reducing past due balances over the last two years.
Alpine High Depreciation Impact
Fourth quarter DD&A expense was higher than guidance due to accelerated depreciation at Alpine High following negative Waha gas prices.
Company Guidance
In the fourth quarter of 2024, APA Corporation reported a consolidated net income of $354 million, or $0.96 per diluted share. Excluding non-core items, adjusted net income was $290 million, or $0.79 per share. During the quarter, APA generated $420 million in free cash flow, contributing to the year's total of $841 million, of which 71% was returned to shareholders through $353 million in dividends and $246 million in share repurchases. The company also announced significant operational achievements, including a BBB- credit rating from S&P and strategic portfolio changes, with adjusted production from the Permian Basin driving over 75% of current output. Looking forward, APA plans a capital budget of $2.5 to $2.6 billion in 2025, anticipating higher total adjusted production. A focus on cost reduction initiatives is expected to yield annualized savings of at least $350 million by 2027, enhancing future free cash flow growth alongside strategic investments in Suriname and Egypt.APA Corporate Events
Executive/Board Changes
APA Corporation Updates Executive Compensation Plan
Neutral
Jan 10, 2025
APA Corporation’s Board of Directors has approved updated agreements for performance shares and stock options under its 2016 Omnibus Compensation Plan. These changes aim to refine executive compensation, with vesting of performance shares now linked to Relative Total Shareholder Return and Cash Return on Invested Capital, enhancing alignment with shareholder interests.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.