Obsidian Energy (OBE) AI Stock Analysis

• Market Cap: $576.95M
• Dividend Yield: N/A
• Average Volume (3M): 356.34K
• Price to Earnings (P/E): 5.6
• Beta (1Y): 1.31
• Revenue Growth: 11.92%
• EPS Growth: -304.98%
• Country: CA
• Employees: 198
• Sector: Energy
• Sector Strength: 82
• Industry: Fossil Fuels
• EPS (TTM): -2.75
• Shares Outstanding: 73,684,800
• 10 Day Avg. Volume: 397,314
• 30 Day Avg. Volume: 356,344
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.78
• Price to Cash Flow (P/CF): 1.30
• P/FCF Ratio: 2.90
• 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$13.38
• Price Target Upside: 70.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

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 Business Overview & Revenue Model

Company Description

Obsidian 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 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: Positive
• Last Price: 7.83
• 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 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WCP	76 Outperform	$5.07B	6.32	14.51%	8.88%	3.34%	-6.99%
MEG	72 Outperform	$6.21B	12.79	11.22%	0.87%	-8.92%	-5.46%
ARX	70 Outperform	$15.56B	13.96	14.67%	2.78%	-9.83%	-27.76%
BTE	68 Neutral	$2.39B	10.49	5.99%	3.08%	22.71%	―
CVE	67 Neutral	$35.34B	11.54	10.88%	3.68%	3.97%	-22.22%
Sector *	57 Neutral	$8.50B	5.53	-5.10%	7.32%	-0.14%	-68.56%
OBE	55 Neutral	$576.95M	5.64	-12.89%	―	11.92%	-304.98%