tiprankstipranks
Obsidian Energy (TSE:OBE)
TSX:OBE

Obsidian Energy (OBE) AI Stock Analysis

Compare
103 Followers

Top Page

TS

Obsidian Energy

(TSX:OBE)

55Neutral
Obsidian Energy's overall stock score is primarily impacted by its challenging financial performance, with particular concerns around profitability and cash flow. While the technical analysis suggests some stability, the negative P/E ratio and lack of dividend yield weigh heavily on the stock's valuation, resulting in a cautious outlook.
Positive Factors
Operational 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
Valuation Concerns
Obsidian's discounted valuation is partially explained by how far off the radar-screen it is with other energy operators.

Obsidian Energy (OBE) vs. S&P 500 (SPY)

Obsidian Energy Business Overview & Revenue Model

Company DescriptionObsidian Energy (OBE) is a Canadian oil and natural gas production company headquartered in Calgary, Alberta. The company operates primarily in the Western Canadian Sedimentary Basin, focusing on the development and production of oil and natural gas resources. Obsidian Energy's core assets are located in the Cardium, Peace River, and Alberta Viking areas, where it engages in the exploration, extraction, and sale of hydrocarbons.
How the Company Makes MoneyObsidian 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
55
Neutral
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
65
Positive
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
50
Neutral
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
837.70M653.30M920.00M497.50M286.50M
Gross Profit
62.30M409.40M695.70M497.40M-750.10M
EBIT
0.00374.20M732.00M649.90M-766.40M
EBITDA
430.60M401.20M794.30M577.10M-600.30M
Net Income Common Stockholders
-202.60M108.00M810.10M181.80M-802.80M
Balance SheetCash, Cash Equivalents and Short-Term Investments
0.00500.00K800.00K7.30M8.10M
Total Assets
2.11B2.25B2.20B1.43B964.10M
Total Debt
342.50M228.00M231.30M399.70M462.20M
Net Debt
342.50M227.50M230.50M392.40M454.10M
Total Liabilities
708.80M606.60M624.60M665.70M641.00M
Stockholders Equity
1.41B1.64B1.58B763.50M323.10M
Cash FlowFree Cash Flow
-64.60M59.60M137.40M57.70M22.20M
Operating Cash Flow
361.90M352.70M456.80M198.70M79.40M
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
Positive
Last Price7.83
Price Trends
50DMA
7.84
Negative
100DMA
7.86
Negative
200DMA
8.55
Negative
Market Momentum
MACD
-0.09
Negative
RSI
53.63
Neutral
STOCH
72.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:OBE, the sentiment is Positive. The current price of 7.83 is above the 20-day moving average (MA) of 7.63, below the 50-day MA of 7.84, and below the 200-day MA of 8.55, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 53.63 is Neutral, neither overbought nor oversold. The STOCH value of 72.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:OBE.

Obsidian 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
TSWCP
76
Outperform
$5.07B6.3214.51%8.88%3.34%-6.99%
TSMEG
72
Outperform
$6.21B12.7911.22%0.87%-8.92%-5.46%
TSARX
70
Outperform
$15.56B13.9614.67%2.78%-9.83%-27.76%
TSBTE
68
Neutral
$2.39B10.495.99%3.08%22.71%
TSCVE
67
Neutral
$35.34B11.5410.88%3.68%3.97%-22.22%
57
Neutral
$8.50B5.53-5.10%7.32%-0.14%-68.56%
TSOBE
55
Neutral
$576.95M5.64-12.89%11.92%-304.98%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:OBE
Obsidian Energy
7.83
-2.90
-27.03%
TSE:BTE
Baytex Energy
3.09
-1.36
-30.56%
TSE:MEG
MEG Energy
24.19
-5.91
-19.63%
TSE:CVE
Cenovus Energy
19.38
-5.32
-21.53%
TSE:ARX
ARC Resources
26.38
3.39
14.76%
TSE:WCP
Whitecap Resources
8.63
-0.70
-7.49%
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.