APA (APA) AI Stock Analysis

• Market Cap: $8.39B
• Dividend Yield: 4.4%
• Average Volume (3M): 7.09M
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.86
• Revenue Growth: 12.13%
• EPS Growth: -67.53%
• Country: US
• Employees: 2,305
• Sector: Energy
• Sector Strength: 59
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.87
• Shares Outstanding: 357,786,470
• 10 Day Avg. Volume: 6,263,933
• 30 Day Avg. Volume: 7,094,096
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.45
• Enterprise Value/Revenue: 1.21
• Enterprise Value/Gross Profit: 3.09
• Enterprise Value/Ebitda: 2.53
• 1Y Price Target: $23.40
• Price Target Upside: 2.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 21

• Rating: 78 Outperform
• Price Target: $23.50 ▲(3.30% Upside)

APA's strong financial performance, attractive valuation, and positive technical indicators contribute to a robust overall score. The earnings call further supports a positive outlook with strategic initiatives and operational efficiencies. However, challenges in revenue growth and regional production variances are areas to monitor.

Positive Factors

Cost Efficiency

APA's $350m cost reduction initiative is ahead of schedule by a full year, with impacts realized by FY26.

Debt Reduction

Net debt was reduced by 15% after New Mexico asset sales and a new $3bn Net Debt target was initiated.

Production Performance

APA had a strong print, beating production in all 3 geographies.

Negative Factors

Commodity Price Impact

Lower commodity price realizations and higher opex prompted a reduction in Q2 estimates.

Guidance Adjustment

FY25 production guidance was lowered by 1% and capital guidance was raised by 3% at the midpoint due to the impact of prior Permian asset sales.

Valuation Concerns

The company looks expensive on FCF multiples compared to its peer group of large cap E&Ps.

APA Business Overview & Revenue Model

Company Description

APA (APA Group) is one of the largest owners, operators, and developers of energy infrastructure in Australia. The company specializes in natural gas transportation, storage, and distribution, serving a diverse range of industries. APA operates a vast network of pipelines, along with gas-fired power stations, and has significant investments in renewable energy projects. Its core products include gas transmission services, energy storage solutions, and various energy management services tailored to meet the needs of commercial and industrial customers.

How the Company Makes Money

APA generates revenue primarily through the transportation of natural gas via its extensive pipeline network, charging fees for the transmission services provided to its customers. Key revenue streams include long-term contracts with utility companies and industrial users, which provide a stable income base. Additionally, APA earns income from its gas storage facilities, where customers pay for storage capacity and related services. The company also benefits from partnerships with energy retailers and other stakeholders in the energy market, enhancing its earnings through collaborative projects and joint ventures in renewable energy initiatives.

APA Financial Statement Overview

Summary

APA demonstrates a solid financial position with strong cash flow generation and improved leverage management. Despite challenges in revenue growth, profitability metrics remain healthy, and debt levels are effectively managed.

Income Statement

APA's income statement shows a mixed performance. The TTM data reveals a decline in revenue growth rate by 3.5%, indicating challenges in maintaining sales momentum. However, the company maintains a healthy net profit margin of 10.7% and an EBIT margin of 11.9%, showcasing operational efficiency. The gross profit margin has decreased compared to previous years, suggesting potential cost pressures.

Balance Sheet

The balance sheet indicates a strong equity position with a debt-to-equity ratio of 0.38 in the TTM period, reflecting improved leverage management. Return on equity stands at 15.99%, demonstrating effective use of equity to generate profits. The equity ratio of 62% suggests a stable financial structure, although historical data shows significant fluctuations in equity levels.

Cash Flow

Cash flow analysis reveals a robust free cash flow growth of 31.7% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 1.80 suggests efficient conversion of earnings into cash. The free cash flow to net income ratio of 0.35 highlights a solid cash flow position relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.06B	9.74B	8.28B	11.07B	7.99B	4.43B
Gross Profit	3.93B	4.30B	4.23B	6.25B	3.54B	905.00M
EBITDA	4.81B	4.17B	4.75B	7.61B	3.88B	-2.31B
Net Income	1.08B	804.00M	2.85B	3.67B	973.00M	-4.86B
Balance Sheet
Total Assets	18.08B	19.39B	15.24B	13.15B	13.30B	12.75B
Cash, Cash Equivalents and Short-Term Investments	107.00M	625.00M	87.00M	245.00M	302.00M	262.00M
Total Debt	4.29B	6.42B	5.30B	5.62B	7.61B	8.89B
Total Liabilities	11.18B	13.03B	11.55B	11.80B	13.31B	13.39B
Stockholders Equity	11.21B	5.28B	2.65B	423.00M	-1.59B	-1.64B
Cash Flow
Free Cash Flow	1.63B	769.00M	772.00M	2.54B	2.39B	114.00M
Operating Cash Flow	4.65B	3.62B	3.13B	4.94B	3.50B	1.39B
Investing Cash Flow	-1.65B	-924.00M	-2.14B	-1.51B	-833.00M	-1.47B
Financing Cash Flow	-3.05B	-2.16B	-1.15B	-3.49B	-2.62B	93.00M

APA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APA, the sentiment is Positive. The current price of 22.75 is above the 20-day moving average (MA) of 21.56, above the 50-day MA of 20.01, and above the 200-day MA of 19.69, indicating a bullish trend. The MACD of 1.01 indicates Negative momentum. The RSI at 61.30 is Neutral, neither overbought nor oversold. The STOCH value of 69.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APA.

APA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTDR	80 Outperform	$6.23B	7.33	17.07%	2.46%	16.20%	-12.42%
APA	78 Outperform	$8.39B	7.86	19.09%	4.40%	12.13%	-67.53%
CHRD	75 Outperform	$6.15B	27.52	3.13%	5.16%	19.55%	-81.10%
RRC	72 Outperform	$8.32B	17.59	11.99%	0.98%	19.95%	0.94%
MUR	71 Outperform	$3.67B	13.33	5.42%	5.11%	-18.08%	-49.36%
Sector *	65 Neutral	$15.01B	7.39	3.19%	5.33%	4.10%	-61.80%
CRK	44 Neutral	$4.69B	―	-3.18%	0.66%	17.60%	-385.47%

APA Corporate Events

APA Corporation Updates Executive Compensation Plan

APA Corporation’s Board of Directors has approved updated agreements for performance shares and stock options under its 2016 Omnibus Compensation Plan. These changes aim to refine executive compensation, with vesting of performance shares now linked to Relative Total Shareholder Return and Cash Return on Invested Capital, enhancing alignment with shareholder interests.