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Gran Tierra Energy Inc. (GTE)
:GTE
Risk Overview Q4, 2024
Risk Distribution
29% Legal & Regulatory
26% Finance & Corporate
16% Production
16% Macro & Political
10% Tech & Innovation
3% Ability to Sell
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Gran Tierra Energy Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q4, 2024
Main Risk Category
Legal & Regulatory
With 9 Risks
Legal & Regulatory
With 9 Risks
Number of Disclosed Risks
31
+9
From last reportS&P 500 Average: 31
31
+9
From last reportS&P 500 Average: 31
Recent Changes
10Risks added
0Risks removed
3Risks changed
Since Dec 2024
10Risks added
0Risks removed
3Risks changed
Since Dec 2024
Number of Risk Changed
3
+3
From last reportS&P 500 Average: 3
3
+3
From last reportS&P 500 Average: 3
See the risk highlights of Gran Tierra Energy in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 31
Legal & Regulatory
Total Risks: 9/31 (29%)Above Sector Average
Regulation4 | 12.9%
Regulation - Risk 1
Legal and Regulatory Risks We are dependent on obtaining and maintaining permits and licenses from various governmental authoritiesRegulation - Risk 2
We may be exposed to liabilities under anti-bribery laws and a finding that we violated these laws could have a material adverse effect on our businessWe are subject to anti-bribery laws in the United States, Canada, Ecuador and Colombia and will be subject to similar laws in other jurisdictions where we may operate in the future. We may face, directly or indirectly, corrupt demands by officials, tribal or insurgent organizations, international organizations, or private entities. As a result, we face the risk of unauthorized payments or offers of payments by employees, contractors, agents, and partners of ours or our subsidiaries or affiliates, given that these parties are not always subject to our control or direction. It is our policy to prohibit these practices. However, our existing safeguards and any future improvements to those measures may prove to be less than effective or may not be followed, and our employees, contractors, agents, and partners may engage in illegal conduct for which we might be held responsible. A violation of any of these laws, even if prohibited by our policies, may result in criminal or civil sanctions or other penalties (including profit disgorgement) as well as reputational damage and could have a material adverse effect on our business and financial condition.
Regulation - Risk 3
Restrictions on development activities to protect wildlifeAdded
Crude oil and natural gas operations in our operating areas in Canada can be adversely affected by seasonal or permanent restrictions on development activities designed to protect identified wildlife. There is a risk that our activities will be seen to adversely affect protected species, leading to an inability to access planned facility sites or, if already built, some kind of restriction on operations.
Seasonal restrictions may limit our ability to operate in protected areas and can intensify competition for drilling rigs, oilfield equipment, services, supplies and qualified personnel, which may lead to periodic shortages when drilling is allowed. These constraints and the resulting shortages or high costs could delay our operations and materially increase operating and capital costs. Permanent restrictions imposed to protect endangered species could prohibit drilling in certain areas or require the implementation of expensive mitigation measures. The designation of previously unprotected species in areas where we operate as threatened or endangered could cause us to incur increased costs arising from species protection measures or could result in limitations on our exploration and production activities that could have an adverse impact on our ability to develop and produce our reserves.
Additionally, some of our producing areas in Canada are or will be located in areas that may become inaccessible due to environmental protection requirements. This includes, but is not limited to, protected caribou habitat on a seasonal basis.
Regulation - Risk 4
If the United States imposes sanctions on Colombia, Ecuador or Canada in the future, our business may be adversely affectedChanged
Colombia is among several nations whose eligibility to receive foreign aid from the United States is dependent on its progress in stemming the production and transit of illegal drugs, which is subject to an annual review by the President of the United States. Although Colombia is currently eligible for such aid, it may not remain eligible in the future. A finding by the President that Colombia has failed demonstrably to meet its obligations under international counter-narcotic agreements may result in the imposition of economic and trade sanctions on Colombia which could result in adverse economic consequences in Colombia including potentially threatening our ability to obtain necessary financing to develop our Colombian properties, and could further heighten the political and economic risks associated with our operations there. The United States may in the future impose similar eligibility restrictions on foreign aid provided to Ecuador. The president of the United States declared that Canada, among other countries, is responsible for illegal immigration and drug transit to United States and is in the process of implementing 10% tariffs on energy resources from Canada. Implementation of tariffs could have adverse impact on our profitability from Canadian operations.
Taxation & Government Incentives2 | 6.5%
Taxation & Government Incentives - Risk 1
Carbon taxes and environmental compliance costsAdded
Taxation & Government Incentives - Risk 2
Reduction, elimination or expiration of government subsidiesAdded
The profitability of our business depends on government-imposed financial instruments such as carbon taxes and carbon tax credits. Any of these financial instruments may be changed by the relevant government and such changes may adversely affect the profitability of some or all of our business. There is a risk that accounting for GHG releases and the rate of carbon taxation and the level it reaches will be changed from time to time, creating an economic environment of uncertainty. This risk is further complicated by the dependency of Canadian hydrocarbon energy producers on exports to the United Stated and the uncertainty as to how the United Stated will regulate GHG emissions related to domestic and Canadian production.
Environmental / Social3 | 9.7%
Environmental / Social - Risk 1
Regulations related to emissions and the impact of any changes in climate could adversely impact our business, including demand for our products, our financial condition and results of operationsEnvironmental / Social - Risk 2
Environmental regulation and risks may adversely affect our businessEnvironmental regulation is stringent and the costs and expenses of regulatory compliance are increasing. All phases of the oil and natural gas business present environmental risks and hazards and are subject to environmental regulation pursuant to an extensive suite of international conventions and national and regional laws and regulations. Environmental laws and regulations in the countries in which we operate provide for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances used or produced in association with oil and gas operations. These regulations also require that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures. Failure to comply with these laws and regulations may result in the suspension or termination of operations and subject us to administrative, civil and criminal fines and penalties. Our operations create the risk of significant environmental liabilities to the government of the jurisdictions in which we operate or third parties for any unlawful discharge of oil, gas or other pollutants into the air, soil or water or for certain other environmental impacts. There is uncertainty around the impact of environmental laws and regulations, including those presently in force and those expected to be proposed in the future. We cannot predict how future environmental laws will be interpreted, administered or enforced, but more stringent laws or regulations or more vigorous enforcement policies could in the future require material expenditures by us for the installation and operation of compliant systems; therefore it is impossible at this time to predict the nature and impact of those requirements on our company however they may have a material adverse impact on our business.
Given the nature of our business, there are inherent risks of oil spills at drilling or operations sites due to operational failure, accidents, sabotage, pipeline failure or tampering or escape of oil due to the transportation of the oil by truck. All of these may lead to significant potential environmental liabilities, such as damages, litigation costs, clean-up costs or penalties, some of which may be material and for which our insurance coverage maybe inadequate or unavailable.
Environmental / Social - Risk 3
Public and investor sentiment towards climate change, fossil fuels and other Environmental, Social and Governance ("ESG") matters could adversely affect our cost of capital and the price of our common stockCertain members of the investment community (including investment fund managers, sovereign wealth, pension and endowment funds, and individual investors) have promoted the divestment of fossil fuel equities and pressured lenders to cease or limit funding to companies engaged in the extraction of fossil fuel reserves, including divestment actions by several prominent New York State and New York public employee pension funds. There has also been pressure on lenders and other financial services companies to limit or curtail financing of companies in the oil and gas industry. Such environmental initiatives aimed at targeting climate changes could ultimately interfere with our access to capital and ability to finance our operations.
Some members of the investment community have increased their focus on ESG practices and disclosures by public companies, including practices and disclosures related to climate change and sustainability, diversity, equity and inclusion initiatives, and heightened governance standards, while others have criticized companies for such practices and modified their investments as a result of the same initiatives. Furthermore, concerns over climate change have resulted in, and are expected to continue to result in, the adoption of regulatory requirements for climate-related disclosures. As a result, we may continue to face increasing pressure regarding our ESG disclosures and practices, and mandatory reporting obligations could increase our compliance burden and costs. We publish a Sustainability Report, which outlines our progress and ongoing efforts to advance our ESG initiatives. Our disclosures on these matters rely on management's expectations as of the date the statements are first made, as well as standards for measuring progress that are still in development, and may change or fail to be realized. These expectations and standards may continue to evolve.
A failure to meet our publicly disclosed goals or evolving stakeholder expectations of ESG practices and reporting may increase the risk of litigation with respect to such goals or expectations, potentially harm our reputation and impact employee retention, customer relationships, and access to capital.
Finance & Corporate
Total Risks: 8/31 (26%)Above Sector Average
Share Price & Shareholder Rights3 | 9.7%
Share Price & Shareholder Rights - Risk 1
Shares of our Common Stock are listed on the NYSE American, the Toronto Stock Exchange ("TSX") and the London Stock Exchange ("LSE") and investors seeking to take advantage of price differences between such markets may create unexpected volatility in market pricesShare Price & Shareholder Rights - Risk 2
The market price of our Common Stock may be volatileAdded
The market price for shares of our Common Stock has experienced and may continue to experience volatility. For example, during 2024, the market price for shares of our Common Stock ranged from a low of $4.72 per share to a high of $10.40 per share. The market price for shares of our Common Stock may be influenced by many factors, some of which are beyond our control, including those described above and the following:
- strategic actions or announcements by us of significant contracts, acquisitions, joint marketing relationships, joint ventures or capital commitments;- general economic and stock market conditions;- volatility in commodity prices;- risks related to our business and our industry, including those discussed above;- changes in conditions or trends in our industry, markets or customers;- geopolitical events or terrorist acts;- trading volume of our Common Stock;- future sales of shares of our Common Stock or other securities by us, members of our management team or our existing shareholders; and - investor perceptions of the investment opportunity associated with our industry or securities relative to other investment alternatives.
These market and industry factors may materially reduce the market price for shares of our Common Stock, regardless of our operating performance.
Share Price & Shareholder Rights - Risk 3
Crown land tenure obligations, interpretations and freehold offset royalty obligationsAdded
Our Canadian resources are held in leases, mostly owned by Alberta. There is a risk that the Government of Alberta imposes the strictest interpretation of land tenure regulations and terminates a high percentage of leases on expiry. The leases have defined terms and conditions upon which they are granted and renewed. The Government of Alberta has the power to unilaterally change the royalty charged or the conditions of renewal. We are at risk of loss of value due to revision in royalty or lease renewal provisions. We also risk losing leases if they are not drilled and brought on to production within the terms of the relevant lease. We may fail to bring leases on to production because limited capital may be allocated to other higher return priorities or because surface access to a point where wells can be drilled to access a lease may be impaired by surface conditions, such as swamps, steep valleys, or there may be protected species access restrictions.
Furthermore, on the freehold side, as we develop our land positions in Alberta, we may be required to pay offset royalties to owners of adjacent land without wells. In addition, drilling of wells adjacent to undrilled freehold leases can trigger an obligation to drill the undrilled lands or pay a royalty on those lands equivalent to what would be expected if a well was operating on those lands, or alternatively we may allow the freehold leases to expire. As such, royalty estimates may significantly change in the future.
Accounting & Financial Operations1 | 3.2%
Accounting & Financial Operations - Risk 1
Estimates of oil and natural gas reserves may be inaccurate and our actual revenues may be lower than estimatedDebt & Financing1 | 3.2%
Debt & Financing - Risk 1
Our business requires significant capital expenditures, and we may not have the resources necessary to fund these expendituresCorporate Activity and Growth3 | 9.7%
Corporate Activity and Growth - Risk 1
Certain acquisitions could adversely affect our financial resultsCorporate Activity and Growth - Risk 2
We are vulnerable to risks associated with geographically concentrated operationsThe vast majority of our production comes from four fields located in Colombia. For the year ended December 31, 2024, the Acordionero, Costayaco, Moqueta and Cohembi fields collectively generated 79% of our production and at December 31, 2024, these four fields accounted for 42% of our proved reserves. As a result of this concentration, we may be disproportionately exposed to the impact of, among other things, regional supply and demand factors including limitations on our ability to most profitably sell or market our oil and natural gas to a smaller pool of potential buyers, delays or interruptions of production from wells in these areas caused by governmental regulation, community protests, guerrilla activities, processing or transportation capacity constraints, continued authorization by the government to explore and drill in these areas, severe weather events and the availability of drilling rigs and related equipment, facilities, personnel or services. Due to the concentrated nature of our portfolio of properties, a number of our properties could experience any of the same conditions at the same time, resulting in a relatively greater impact on our results of operations than they might have on other companies that have a more diversified portfolio of properties.
We rely on local infrastructure and the availability of transportation for storage and shipment of our products. The infrastructure in Colombia and Ecuador, including storage and transportation facilities, is less developed than that in North America and may be insufficient for our needs at commercially acceptable terms in the localities in which we operate. Further, we operate in remote areas in both South America and Canada and may rely on helicopters, boats or other transportation methods. Some of these transport methods may result in increased levels of risk, including the risk of accidents involving serious injury or loss of life, and could lead to operational delays which could affect our ability to add to our reserve base or produce oil or natural gas and could have a significant impact on our reputation or cash flow. Additionally, some of this equipment is specialized and may be difficult to obtain in our areas of operations, which could hamper or delay operations, and could increase the cost of those operations.
Further, adverse weather conditions, such as flooding and severe cold weather, may interrupt or curtail our operations, cause supply disruptions, and damage our equipment and facilities. During the winter months in Canada, heavy snow, ice, or rain may adversely affect our ability to operate. Also, during the spring thaw, which normally starts in late March and continues through June, some areas in Canada may impose transportation restrictions to prevent damage caused by the spring thaw.
Corporate Activity and Growth - Risk 3
Joint Venture partner alignmentAdded
We have operated and non operated interests in Colombia and Canada. In the areas where the Company operates as non-operating partner it may have limited control over the day-to-day management or operations of these assets. A third-party mismanagement of an asset may result in significant delays, materially increased costs or liabilities to the Company over which the Company is joint and severally liable. There is no guarantee that the third-party's environmental standards are aligned with those of the Company. The Company continually engages with its operating partners and closely monitors the operation of its assets, thorough reviews are conducted before entering into joint venture arrangements to ensure that our operational objectives are aligned with potential joint venture partner.
Production
Total Risks: 5/31 (16%)Above Sector Average
Manufacturing4 | 12.9%
Manufacturing - Risk 1
Exploration for oil and natural gas, and development of new formations, is riskyManufacturing - Risk 2
Unless we are able to replace our reserves and production, and develop and manage oil and natural gas reserves and production on an economically viable basis, our financial condition and results of operations will be adversely impactedOur future success depends on our ability to find, develop and acquire additional oil and natural gas reserves that are economically recoverable. Producing oil and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Our future oil and natural gas reserves and production, and therefore our cash flows and results of operations, are highly dependent on our success in efficiently developing and exploiting our current reserves and economically finding or acquiring additional recoverable reserves. The value of our securities and our ability to raise capital will be adversely impacted if we are not able to replace our reserves that are depleted by production. We may not be able to develop, exploit, find or acquire sufficient additional reserves to replace our current and future production.
Exploration, development and production costs (including operating and transportation costs), marketing costs (including distribution costs) and regulatory compliance costs (including taxes) will substantially impact the net revenues we derive from the oil and natural gas that we produce. These costs are subject to fluctuations and variations in the areas in which we operate, and we may not be able to predict or control these costs. If these costs exceed our expectations, this may adversely affect our results of operations.
Our future reserves will depend not only on our ability to develop and effectively manage then-existing properties, but also on our ability to identify, acquire and successfully integrate additional suitable producing properties or prospects, to identify and retain responsible service providers and contractors to efficiently drill and complete our wells and to find markets for the oil and natural gas we develop and to effectively distribute our production into our markets.
Manufacturing - Risk 3
Possible shortage of fresh water and surface and groundwater licensesAdded
Drilling and completion operations require a large amount of water. The surface water resources of some of the regions in Canada where we aspire to operate may be insufficient for the full commercial-scale development of the region at a pace matching the industry's ambitions. Thus, limitations on water access may present a ceiling on the allowed pace of development. This ceiling may take the form of a physical ceiling supported by scientific investigation, or it may be a limitation we choose to accept to abate public concerns despite contradicting scientific evidence of the carrying capacity of the surface water resources. Drought and low water levels could impact the year-round availability and associated costs of fresh water for our Canadian operations such as drilling fluid, completions fluid and power or hydrogen plant cooling water. Furthermore, there can be no assurance that our Canadian governmental licenses to withdraw water will not be rescinded or that additional conditions will not be added to these licenses. Further, there can be no assurance that we will not have to pay a fee for the use of water in the future or that any such fees will be reasonable. Finally, new projects or the expansion of existing projects may be dependent on securing licenses for additional water withdrawal, and there can be no assurance that these licenses will be granted on favorable terms, or at all, or that such additional water will in fact be available to divert under such licenses.
Manufacturing - Risk 4
Drilling activities may encounter sour gasAdded
A significant portion of the natural gas produced in Alberta originates as sour gas. With the inclusion of wellhead treatment facilities, our infrastructure may, from time to time, encounter concentrations of sour gas. If a well encounters a high concentration of sour gas it would have to be shut-in due to the lack of existing sour gas handling infrastructure. Sour gas leaks or other exposure to sour gas produced from our properties in Alberta may result in damage to equipment, liability to third parties, adverse effects to humans, animals or the environment, or the shutdown of operations. Special equipment and operating procedures are deployed by the industry in Canada for the production of sour gas in accordance with applicable regulatory requirements.
Costs1 | 3.2%
Costs - Risk 1
Prices and markets for oil and natural gas are unpredictable and tend to fluctuate significantly, which could cause temporary suspension of production and reduce our valueMacro & Political
Total Risks: 5/31 (16%)Above Sector Average
Economy & Political Environment1 | 3.2%
Economy & Political Environment - Risk 1
Our business is subject to local legal, social, security, political and economic factors that are beyond our control, which could impair or delay our ability to expand our operations or operate profitablyNatural and Human Disruptions3 | 9.7%
Natural and Human Disruptions - Risk 1
Security concerns in Colombia or Ecuador may disrupt our operationsNatural and Human Disruptions - Risk 2
Social disruptions or community disputes in Colombia and Ecuador may delay production and result in lost revenueChanged
To enjoy the support and trust of local populations and governments in Colombia and Ecuador, we must demonstrate a commitment to providing local employment, training and business opportunities; a high level of environmental performance; open and transparent communication; and a willingness to discuss and address community issues including community development investments that are carefully selected, not unduly costly and bring lasting social and economic benefits to the community and the area. Improper management of these relationships could lead to a delay or suspension of operations, loss of license or major impact to our reputation in these communities, which could adversely affect our business. We cannot ensure that such issues or disruptions will not be experienced in the future, and we cannot predict their potential impacts, which may include delays or loss of production, standby charges, stranded equipment, or damage to our facilities. We also cannot ensure that we will not experience protests or blockades erected by criminal groups or cultivators of illegal crops, in response to the Colombian government's eradication of such crops, if such crops are grown in proximity to roads required to access our operations. In addition, we must comply with legislative requirements for prior consultation with communities and ethnic groups who are affected by our proposed projects in Colombia and Ecuador. Notwithstanding our compliance with these requirements, we may be sued by such communities through a writ for protection of tutela in the Colombian courts for enhanced consultation, potentially leading to increased costs, operational delays and other impacts. In addition, several areas in Colombia have conducted Popular Consultations and essential referendums on extractive industries. The referendums were organized by opponents of the mining or oil and natural gas industries. It remains unclear to what extent such results can impact the exercise of mineral rights conferred by the national government. In 2024, the Colombian government commenced peace process conversations with illegal groups in the country, but it is not clear if these discussions will resolve the disruptions.
Natural and Human Disruptions - Risk 3
We may be adversely affected by global epidemics or public health crisesGlobal epidemics and public health crises and fear of such events may adversely impact our operations and the global economy, including the worldwide demand for oil and natural gas. The extent to which our business, results of operations and financial condition will be affected by such events depend on future developments, many of which are outside of our control, such as the duration, severity, and sustained geographic spread of the virus, and the impact and effectiveness of governmental actions to contain and treat outbreaks, including government policies and restrictions; vaccine hesitancy, vaccine mandates, and voluntary or mandatory quarantines; and the global response surrounding such uncertainties. To the extent any global epidemic or public health crisis may adversely affect our business, operations, financial condition and operating results, it may also have the effect of heightening the other risks described herein.
Capital Markets1 | 3.2%
Capital Markets - Risk 1
Foreign currency exchange rate volatility may affect our financial resultsTech & Innovation
Total Risks: 3/31 (10%)Above Sector Average
Trade Secrets2 | 6.5%
Trade Secrets - Risk 1
Indigenous rights and stakeholder opposition in CanadaAdded
Trade Secrets - Risk 2
Unforeseen title defectsAdded
Ownership of some of our properties could be subject to prior undetected claims or interests. We plan to conduct title reviews from time to time according to industry practice prior to the purchase of most of our crude oil and natural gas producing properties or the commencement of drilling wells. However, title reviews, if conducted, do not guarantee that an unforeseen defect in the chain of title will not arise to defeat a claim by us. If any such defect were to arise, our entitlement to the production and reserves associated with such properties could be jeopardized, and could have a material adverse effect on our financial condition, results of operations and our ability to timely execute our business plan. Indigenous peoples have claimed title and rights to portions of Western Canada. We are not aware of any claims that have been made in respect of our property and assets in Western Canada; however, if a claim arose and was successful, this could have an adverse effect on our operations.
Cyber Security1 | 3.2%
Cyber Security - Risk 1
The threat and impact of cybersecurity incidents may adversely impact our operations and could result in information theft, data corruption, operational disruption, and/or financial lossAbility to Sell
Total Risks: 1/31 (3%)Above Sector Average
Demand1 | 3.2%
Demand - Risk 1
A substantial portion of our revenue is generated outside of Canada and the United States, and if we determine to, or are required to, repatriate earnings from foreign jurisdictions, we could be subject to taxesChanged
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.