Obsidian Energy (OBE) AI Stock Analysis

• Market Cap: $495.16M
• Dividend Yield: N/A
• Average Volume (3M): 375.95K
• Price to Earnings (P/E): 5.6
• Beta (1Y): 1.47
• Revenue Growth: 11.92%
• EPS Growth: -304.98%
• Country: CA
• Employees: 203
• Sector: Energy
• Sector Strength: 45
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): -2.75
• Shares Outstanding: 73,684,800
• 10 Day Avg. Volume: 475,255
• 30 Day Avg. Volume: 375,950
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.81
• Price to Cash Flow (P/CF): 1.30
• P/FCF Ratio: 3.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$12.05
• Price Target Upside: 100.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Obsidian Energy's stock score reflects challenges in financial performance, especially in profitability and cash flow. While the company maintains a solid equity base and prudent leverage, these are overshadowed by significant risks from negative earnings and weak technical indicators. Valuation metrics further highlight concerns with unattractive earnings perspectives. Overall, the stock appears to face a bearish outlook given the current data.

Positive Factors

Asset Sale

Selling ~27% of corporate production in the Cardium creates an entity positioned toward top quartile assets in the heavy oil window of Alberta.

Drilling Success

New development drilling at Harmon Valley South achieved IP30 rates ahead of expectation at 450-500 boe/d per well, signifying potential to extend the field and add future development locations.

Production Growth

The company highlighted 16% production growth, lower costs, and an active heavy oil development.

Negative Factors

Market Perception

Obsidian's discounted valuation is partially explained by how far off the radar-screen it is with other energy operators.

Shareholder Returns

With a much improved balance sheet and recent strength in crude oil prices, Obsidian is expected to prioritize outsized heavy oil production growth over enhanced shareholder returns in the medium term.

Obsidian Energy Business Overview & Revenue Model

Company Description

Obsidian Energy Ltd. primarily focuses on the exploration, production, and development of oil and natural gas properties in the Western Canada Sedimentary Basin. The company was formerly known as Penn West Petroleum Ltd. and changed its name to Obsidian Energy Ltd. in June 2017. Obsidian Energy Ltd. is headquartered in Calgary, Canada.

How the Company Makes Money

Obsidian Energy generates revenue through the exploration, extraction, and sale of crude oil and natural gas. The company produces these commodities from its assets in the Western Canadian Sedimentary Basin and sells them to various markets, including domestic and international buyers. Key revenue streams include the sale of produced oil and natural gas, which is influenced by global commodity prices, production volumes, and operational efficiencies. Obsidian Energy may also enter into joint ventures or partnerships to optimize resource development and enhance cash flow. The company's earnings are significantly affected by fluctuations in oil and gas prices, operational costs, and regulatory factors impacting the energy sector.

Obsidian Energy Financial Statement Overview

Summary

Obsidian Energy faces a challenging financial environment. While revenue growth and a solid equity base are positive aspects, profitability issues, particularly in terms of net income and free cash flow, pose significant risks. The company's ability to manage leverage remains a strength, but attention to cash flow management is critical for future stability.

Income Statement

Obsidian Energy's income statement shows mixed performance. Gross profit margin improved in 2024 to 7.43% from 62.65% in 2023, but net income declined significantly resulting in a negative net profit margin of -24.17% in 2024. Revenue growth is positive with a 28.24% increase from 2023 to 2024. However, the company experienced a decline in EBIT and net income, impacting profitability.

Balance Sheet

The balance sheet indicates a stable equity position with a debt-to-equity ratio of 0.24 in 2024, which is relatively low, suggesting prudent leverage. However, stockholders' equity decreased from 2023 to 2024. The equity ratio remains strong at 66.47%, signaling a robust capital structure, despite fluctuations in total assets.

Cash Flow

Cash flow analysis reveals challenges in free cash flow, which turned negative in 2024 due to increased capital expenditures. Operating cash flow remained stable but the free cash flow to net income ratio is unfavorable due to the negative net income. The operating cash flow to net income ratio is not meaningful due to negative net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
837.70M	653.30M	920.00M	497.50M	286.50M
	Gross Profit
62.30M	409.40M	695.70M	497.40M	-750.10M
	EBIT
0.00	374.20M	732.00M	649.90M	-766.40M
	EBITDA
430.60M	401.20M	794.30M	577.10M	-600.30M
	Net Income Common Stockholders
-202.60M	108.00M	810.10M	181.80M	-802.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	500.00K	800.00K	7.30M	8.10M
	Total Assets
2.11B	2.25B	2.20B	1.43B	964.10M
	Total Debt
342.50M	228.00M	231.30M	399.70M	462.20M
	Net Debt
342.50M	227.50M	230.50M	392.40M	454.10M
	Total Liabilities
708.80M	606.60M	624.60M	665.70M	641.00M
	Stockholders Equity
1.41B	1.64B	1.58B	763.50M	323.10M
Cash Flow		Free Cash Flow
-64.60M	59.60M	137.40M	57.70M	22.20M
	Operating Cash Flow
361.90M	352.70M	456.80M	198.70M	79.40M
	Investing Cash Flow
-430.50M	-293.60M	-290.80M	-156.60M	-66.20M
	Financing Cash Flow
67.60M	-59.40M	-172.50M	-42.90M	-8.10M

Obsidian Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:OBE, the sentiment is Negative. The current price of 6.02 is below the 20-day moving average (MA) of 7.74, below the 50-day MA of 7.66, and below the 200-day MA of 8.34, indicating a bearish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 59.39 is Neutral, neither overbought nor oversold. The STOCH value of 65.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:OBE.

Obsidian Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	57 Neutral	$7.44B	4.21	-3.75%	6.64%	-0.07%	-64.77%
OBE	49 Neutral	$495.16M	5.64	-12.89%	―	11.92%	-304.98%