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HighPeak Energy (HPK)
NASDAQ:HPK
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HighPeak Energy
(NASDAQ:HPK)
70Outperform
Positive Factors
Refinancing and Capex Reduction
HighPeak's refinancing and capex reduction are considered upside risks but are already priced in.
Negative Factors
Oil Price Sensitivity
HighPeak is the second-most sensitive name to changes in oil prices.
Valuation Concerns
The stock is near fair value at $65 WTI, which is seen as a headwind to valuation.
HighPeak Energy (HPK) vs. S&P 500 (SPY)
Market Cap
$1.12B
Dividend Yield1.95%
Average Volume (3M)351.18K
Price to Earnings (P/E)13.4
Beta (1Y)1.08
Revenue Growth-3.77%
EPS Growth-57.93%
CountryUS
Employees47
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.67
Shares Outstanding126,067,440
10 Day Avg. Volume350,563
30 Day Avg. Volume351,175
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.47
Price to Cash Flow (P/CF)2.80
P/FCF Ratio2.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.17Price Target Upside85.41% Upside
Rating ConsensusHold
Number of Analyst Covering3
HighPeak Energy Business Overview & Revenue Model
Company DescriptionHighPeak Energy, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids reserves in the Midland Basin in West Texas. As of December 31, 2021, the company had approximately 64,213 MBoe of proved reserves. HighPeak Energy, Inc. was incorporated in 2019 and is headquartered in Fort Worth, Texas.
How the Company Makes MoneyHighPeak Energy generates revenue through the production and sale of oil, natural gas, and natural gas liquids extracted from its properties in the Permian Basin. The company's revenue model is primarily based on the quantity of hydrocarbons produced and the market prices at which these commodities are sold. HighPeak Energy invests in drilling and completion activities to increase production levels and optimize its asset portfolio. The company also engages in hedging activities to manage commodity price risks, which can impact its overall revenue. Additionally, strategic partnerships and joint ventures may contribute to operational efficiencies and expanded opportunities for growth.
HighPeak Energy Financial Statement Overview
Summary
HighPeak Energy shows strong revenue growth and improved cash flow, with a notable reduction in leverage. However, declining net profit margins and return on equity indicate increased operational costs, which slightly offset financial strengths.Income Statement
HighPeak Energy has demonstrated strong revenue growth over the years, with a significant increase from $8.1 million in 2019 to over $1 billion in 2023. The company has consistently improved its gross profit margin, achieving 94.4% in 2023. However, the net profit margin has declined recently, dropping from 19.4% in 2022 to 8.9% in 2023, indicating increased costs or expenses.75
Positive
Balance Sheet
The company maintains a healthy equity base, with a debt-to-equity ratio improving drastically from 1.4 in 2020 to 0.08 in 2023, indicating reduced leverage. However, the equity ratio remains stable at around 52%, suggesting a balanced capital structure. The return on equity has decreased to 5.9% in 2023, reflecting lower profitability on shareholder investments compared to previous years.68
Positive
Cash Flow
HighPeak Energy has shown robust operating cash flows, with $690 million generated in 2023, translating to a strong operating cash flow to net income ratio of 7.3. The free cash flow has also turned positive, indicating effective cash management and improved liquidity. The company has effectively transitioned from negative free cash flow in earlier years to positive cash flows, enhancing its financial flexibility.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.07B | 1.11B | 755.69M | 220.12M | 24.62M | Gross Profit |
| 1.01B | 483.04M | 469.90M | 119.12M | -5.79M | EBIT |
| 337.41M | 426.46M | 422.56M | 101.85M | -29.18M | EBITDA |
| 792.11M | 854.62M | 540.94M | 140.31M | -12.78M | Net Income Common Stockholders |
| 95.07M | 215.87M | 236.85M | 55.56M | -101.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 86.65M | 194.51M | 30.50M | 34.87M | 19.55M | Total Assets |
| 3.06B | 3.08B | 2.28B | 818.96M | 537.93M | Total Debt |
| 120.00M | 1.15B | 704.35M | 97.93M | 586.00K | Net Debt |
| 33.35M | 956.31M | 673.85M | 63.06M | -18.97M | Total Liabilities |
| 1.46B | 1.53B | 1.11B | 265.90M | 63.70M | Stockholders Equity |
| 1.60B | 1.55B | 1.17B | 553.06M | 474.23M |
| Cash Flow | Free Cash Flow | |||
| 69.21M | -369.55M | -807.33M | -143.98M | -123.38M | Operating Cash Flow |
| 690.39M | 756.39M | 504.01M | 147.01M | 1.31M | Investing Cash Flow |
| -620.84M | -1.13B | -1.18B | -250.37M | -139.82M | Financing Cash Flow |
| -177.41M | 533.56M | 674.03M | 118.67M | 135.35M |
HighPeak Energy Technical Analysis
Negative
9.80
Price Trends
12.51
Negative
13.51
Negative
14.12
Negative
Market Momentum
-0.07
Negative
53.68
Neutral
56.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HPK, the sentiment is Negative. The current price of 9.8 is below the 20-day moving average (MA) of 11.59, below the 50-day MA of 12.51, and below the 200-day MA of 14.12, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 53.68 is Neutral, neither overbought nor oversold. The STOCH value of 56.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HPK.
HighPeak Energy 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 | $1.49B | 4.54 | 10.41% | 2.66% | -14.50% | -46.36% | |
74 Outperform | $1.27B | 8.50 | 32.48% | 3.35% | -16.56% | -24.95% | |
70 Outperform | $1.12B | 13.37 | 5.44% | 1.95% | -3.77% | -57.93% | |
67 Neutral | $1.24B | 2.96 | 15.12% | ― | -7.79% | 57.21% | |
64 Neutral | $1.37B | 16.92 | -3.11% | ― | 35.37% | -131.25% | |
61 Neutral | $1.31B | 38.52 | 5.16% | 2.88% | 6.88% | -35.30% | |
57 Neutral | $7.68B | 4.29 | -3.52% | 6.80% | -0.14% | -64.60% |
* Energy Sector Average
Performance Comparison
HPK
HighPeak Energy
8.47
-6.63
-43.91%
NRP
Natural Resource PRN
96.50
9.96
11.51%
BTU
Peabody Energy Comm
12.26
-10.90
-47.06%
SEI
Solaris Energy Infrastructure
19.46
10.95
128.67%
TALO
Talos Energy
7.60
-6.59
-46.44%
SDRL
Seadrill Limited
21.16
-31.42
-59.76%
HighPeak Energy Earnings Call Summary
Earnings Call Date: Mar 10, 2025 | % Change Since: -17.02% | Next Earnings Date: May 19, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by HighPeak Energy with significant achievements in production growth, reserve increases, and cost efficiency. However, the high interest expense on the term loan and slightly higher fourth quarter CapEx were notable challenges. The company is optimistic about its future outlook with plans to improve its capital structure and maintain operational efficiency.Highlights
Increased Production and Efficiency
HighPeak Energy achieved a 10% increase in production year over year, exceeding initial expectations of flat production volumes. This was achieved alongside a capital spend that was 40% less than in 2023.
Proved Reserves Growth
Proved reserves increased by almost 30% by year-end 2023, with a 36% increase in proved developed reserves, despite using lower SEC guideline prices for 2024.
Reduction in Lease Operating Expenses
There was a 17% decrease in lease operating expenses on a BOE basis, attributed to efficient infrastructure and operations.
Debt Reduction and Shareholder Initiatives
HighPeak reduced absolute debt by $120 million, paid $22 million in dividends, and repurchased approximately 2.4 million shares, totaling $177 million in shareholder-friendly initiatives.
Operational Improvements and Cost Reductions
The company realized efficiency gains in drilling and completion, leading to more work being done with the same number of rigs, and expects a further 20% reduction in capital budget for 2025.
Lowlights
High Interest Expense
The term loan carried a very high average interest rate of 13% in 2024, leading to $150 million in annual cash interest expense.
Higher Than Expected Fourth Quarter CapEx
Fourth quarter CapEx was higher than originally anticipated due to efficiency gains that allowed pulling forward some drilling and stimulation activities, and initiation of key 2025 projects.
Company Guidance
During HighPeak Energy's fourth-quarter 2024 earnings call, CEO Jack Hightower highlighted the company's significant achievements and laid out guidance for 2025. In 2024, HighPeak managed to increase production by 10% year-over-year while reducing capital expenditures by 40% compared to 2023. The company also reduced lease operating expenses by 17% on a BOE basis and decreased absolute debt by $120 million, with plans to pay down an additional $30 million by the end of March 2025. For 2025, HighPeak aims to maintain capital discipline with a 20% lower capital budget while keeping production volumes flat. The company expects to further improve corporate efficiency and increase levered free cash flow by optimizing its capital structure, potentially lowering interest expenses significantly. HighPeak plans to continue shareholder-friendly initiatives such as maintaining dividends and opportunistically buying back shares. The company's 2025 plan includes a focus on co-developing high-return zones and connecting newly acquired acreage to its infrastructure, anticipating a 29% increase in proved reserves from 2023.HighPeak Energy Corporate Events
Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
HighPeak Energy Reports Strong 2024 Financial Results
Positive
Mar 10, 2025
HighPeak Energy reported its financial and operational results for the fourth quarter and full year of 2024, showing a 10% increase in sales volumes and a 29% rise in proved reserves compared to 2023. The company reduced its long-term debt by $120 million, paid dividends, and repurchased shares, while also achieving a 17% decrease in lease operating expenses. Looking ahead to 2025, HighPeak plans to maintain a two-rig drilling program, reduce capital expenditures by 20%, and focus on optimizing its capital structure to enhance levered free cash flow. The company aims to continue its strategy of debt reduction, consistent dividends, and opportunistic share buybacks to reinforce shareholder value.
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.