APA (APA) AI Stock Analysis

• Market Cap: $7.33B
• Dividend Yield: 4.88%
• Average Volume (3M): 6.91M
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.88
• Revenue Growth: 12.13%
• EPS Growth: -67.53%
• Country: US
• Employees: 2,305
• Sector: Energy
• Sector Strength: 45
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.87
• Shares Outstanding: 357,786,470
• 10 Day Avg. Volume: 9,063,580
• 30 Day Avg. Volume: 6,907,981
• 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: 1.66
• Enterprise Value/Revenue: 1.21
• Enterprise Value/Gross Profit: 5.70
• Enterprise Value/Ebitda: 3.74
• 1Y Price Target: $22.83
• Price Target Upside: 11.47% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 22

• Rating: 71 Outperform
• Price Target: $22.50 ▲(9.86% Upside)

APA's overall stock score reflects its solid financial performance and attractive valuation. The company's strong cash flow generation and effective debt management enhance its financial stability. The positive sentiment from the earnings call, highlighting cost-saving initiatives and expansion efforts, further supports the score. However, technical analysis is limited, and challenges in oil production and inventory uncertainties present risks.

Positive Factors

Cost Reduction

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 and Capital Efficiency

Production from Suriname, coupled with improving capital efficiency, are expected to double 2029 FCF from 2025.

Negative Factors

Capital Guidance

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.

Commodity Prices and Operating Expenses

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

Market Valuation

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 Corporation, through its subsidiaries, explores for, develops, and produces oil and gas properties. It has operations in the United States, Egypt, and the United Kingdom, as well as has exploration activities offshore Suriname. The company also operates gathering, processing, and transmission assets in West Texas, as well as holds ownership in four Permian-to-Gulf Coast pipelines. APA Corporation was founded in 1954 and is based in Houston, Texas.

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 has demonstrated a strong financial recovery with significant improvements in revenue and profitability. The balance sheet shows manageable leverage, but the low equity ratio poses some risk. Cash flow generation is strong, although historical volatility suggests the need for cautious cash management moving forward.

Income Statement

The company has shown a strong recovery with a positive revenue growth rate from the previous year, indicating a robust upward trend. Gross profit margins are healthy, and the net profit margin has improved, reflecting enhanced profitability. However, past volatility in EBIT and EBITDA margins suggests some operational challenges.

Balance Sheet

The company's debt-to-equity ratio is moderate, indicating a manageable level of leverage. Return on equity (ROE) is positive, signaling effective utilization of shareholder funds. However, the equity ratio indicates a relatively low equity base compared to total assets, suggesting potential financial risk if liabilities increase.

Cash Flow

The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to net income. Free cash flow has grown significantly, demonstrating effective cash management. However, historical fluctuations in free cash flow highlight potential volatility in cash flow stability.

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	2.13B	4.30B	4.23B	6.25B	3.54B	905.00M
EBITDA	3.25B	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	6.87B	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: 20.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 20.48 is above the 20-day moving average (MA) of 19.37, above the 50-day MA of 19.17, and above the 200-day MA of 19.69, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 61.45 is Neutral, neither overbought nor oversold. The STOCH value of 92.18 is Negative, 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	83 Outperform	$5.95B	7.00	17.07%	2.53%	16.20%	-12.42%
CHRD	73 Outperform	$5.89B	26.32	3.13%	4.96%	19.55%	-81.10%
RRC	72 Outperform	$8.16B	17.24	11.99%	0.99%	19.95%	0.94%
APA	71 Outperform	$7.33B	6.88	19.09%	4.88%	12.13%	-67.53%
MUR	69 Neutral	$3.31B	12.05	5.42%	5.44%	-18.08%	-49.36%
Sector *	65 Neutral	$14.84B	8.62	2.77%	5.45%	4.51%	-62.52%
CRK	42 Neutral	$4.67B	―	-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.