APA (APA) AI Stock Analysis

• Market Cap: $6.96B
• Dividend Yield: 5.37%
• Average Volume (3M): 7.05M
• Price to Earnings (P/E): 7.0
• Beta (1Y): 0.91
• Revenue Growth: 26.76%
• EPS Growth: -69.10%
• Country: US
• Employees: 2,305
• Sector: Energy
• Sector Strength: 42
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 1.06
• Shares Outstanding: 360,845,120
• 10 Day Avg. Volume: 6,052,883
• 30 Day Avg. Volume: 7,054,290
• PEG Ratio: -0.03
• Price to Book (P/B): -3.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 62.37
• Enterprise Value/Market Cap: 2.34
• Enterprise Value/Revenue: 0.42
• Enterprise Value/Gross Profit: 3.90
• Enterprise Value/Ebitda: 0.86
• 1Y Price Target: $20.74
• Price Target Upside: 7.57% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 21

• Rating: 75 Outperform
• Price Target: $19.50 ▲(1.14%Upside)

APA's strong financial performance and attractive valuation are the primary drivers of the overall score. The earnings call also contributed positively with strategic initiatives for cost savings and debt reduction. Technical analysis suggests neutral momentum, providing a balanced outlook.

Positive Factors

Debt Reduction

The sale of northern Del assets for $608 million aids in accelerating debt reduction, contributing to rapid de-leveraging.

Exploration Success

APA announced successful results of a flow test at its Sockeye-2 exploratory well on the North Slope of Alaska, indicating high reservoir quality.

Financial Performance

Reported adjusted EBITDA of $1.485B exceeded expectations, highlighting effective management of capex and costs.

Negative Factors

Cost Reduction Efforts

APA's much-anticipated update on cost reduction efforts was underwhelming with 2025 guidance implying a ~7% YoY reduction in cash opex/Boe, below the ~10-15% target APA provided in November.

Oil Volume Guidance

The 2025 US oil volume guidance of 125-127 mbbl/d was incrementally lower vs. the ~125-130 mbbl/d range it had been messaging and ~3% below consensus.

Production Decline

Permian oil production is expected to decline due to weather-related impacts and third-party downtime.

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 Corporation generates revenue primarily through the exploration, development, and production of oil and natural gas. The company's key revenue streams include the sale of crude oil, natural gas, and natural gas liquids to various customers, including refineries, utilities, and other energy companies. APA's earnings are significantly influenced by global oil and gas prices, as well as its ability to efficiently manage production costs and optimize output. Strategic partnerships, particularly in international markets like Egypt, also play a crucial role in its revenue generation, providing access to key resources and enhancing operational capabilities.

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, though historical volatility suggests the need for cautious cash management.

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
7.27B	9.74B	8.28B	11.07B	7.99B	4.43B
	Gross Profit
2.97B	4.30B	4.23B	6.25B	3.54B	905.00M
	EBIT
1.76B	3.20B	3.36B	5.08B	2.69B	173.00M
	EBITDA
3.88B	4.22B	4.75B	7.61B	3.88B	-2.31B
	Net Income Common Stockholders
-152.00M	804.00M	2.85B	3.67B	973.00M	-4.86B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
247.00M	625.00M	87.00M	245.00M	302.00M	262.00M
	Total Assets
18.11B	19.39B	15.24B	13.15B	13.30B	12.75B
	Total Debt
8.73B	6.16B	5.30B	5.62B	7.61B	8.89B
	Net Debt
8.49B	5.54B	5.22B	5.38B	7.31B	8.63B
	Total Liabilities
13.64B	13.03B	11.55B	11.80B	13.31B	12.78B
	Stockholders Equity
3.25B	5.28B	2.65B	423.00M	-1.59B	-1.64B
Cash Flow		Free Cash Flow
-130.00M	769.00M	772.00M	2.54B	2.39B	114.00M
	Operating Cash Flow
3.76B	3.62B	3.13B	4.94B	3.50B	1.39B
	Investing Cash Flow
-3.99B	-924.00M	-2.14B	-1.51B	-833.00M	-1.47B
	Financing Cash Flow
-518.00M	-2.16B	-1.15B	-3.49B	-2.62B	93.00M

APA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 19.28 is above the 20-day moving average (MA) of 17.73, above the 50-day MA of 16.79, and below the 200-day MA of 21.15, indicating a neutral trend. The MACD of 0.55 indicates Negative momentum. The RSI at 68.15 is Neutral, neither overbought nor oversold. The STOCH value of 85.87 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	82 Outperform	$6.00B	6.44	19.20%	2.30%	21.73%	1.48%
CHRD	78 Outperform	$5.75B	6.67	12.64%	5.23%	31.71%	-32.13%
APA	75 Outperform	$6.96B	6.97	25.34%	5.37%	26.76%	-69.10%
NFG	70 Outperform	$7.41B	186.81	1.30%	2.51%	7.14%	-90.91%
SUN	68 Neutral	$8.14B	9.58	26.11%	6.74%	-3.59%	22.77%
Sector *	58 Neutral	$7.35B	3.36	-4.49%	5.60%	0.82%	-49.15%
CRK	52 Neutral	$7.04B	―	-14.17%	0.66%	-1.73%	-608.98%

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.