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Civitas Resources, Inc. (CIVI)
:CIVI
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Civitas Resources
(NYSE:CIVI)
Select Model
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Rating:74Outperform
Price Target:
$38.00
â–²(17.83% Upside)
Civitas Resources scores well due to its strong valuation and strategic initiatives highlighted in the earnings call, including aggressive capital returns and operational efficiencies. Financial performance is solid, though recent declines in revenue and free cash flow growth present challenges. Technical indicators suggest neutral momentum, with potential for upward movement.
Positive Factors
Operational Efficiency
Civitas Resources' improvements in drilling and completion efficiencies across basins lead to reduced well costs, enhancing long-term profitability and competitiveness in the oil and gas sector.
Capital Return Program
The aggressive capital return strategy, including significant share buybacks, underscores Civitas Resources' commitment to enhancing shareholder value and reflects confidence in its financial health.
Asset Divestitures
By divesting non-core assets, Civitas Resources can streamline operations and focus on core areas, improving operational efficiency and potentially unlocking value for shareholders.
Negative Factors
Leadership Changes
The transition in leadership with an interim CEO could create uncertainty in strategic direction and execution, potentially impacting long-term stability and investor confidence.
Revenue Growth Challenges
Negative revenue growth suggests potential difficulties in maintaining top-line expansion, which could affect Civitas Resources' ability to sustain long-term profitability and market position.
Rising Debt Levels
Increasing debt levels may strain Civitas Resources' financial flexibility, potentially impacting cash flow and limiting future investment opportunities, posing risks to long-term growth.
Civitas Resources (CIVI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.99B
Dividend Yield6.2%
Average Volume (3M)2.92M
Price to Earnings (P/E)4.2
Beta (1Y)1.43
Revenue Growth0.24%
EPS Growth-9.19%
CountryUS
Employees655
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.99
Shares Outstanding92,660,010
10 Day Avg. Volume2,946,645
30 Day Avg. Volume2,915,842
Financial Highlights & Ratios
PEG Ratio-0.81
Price to Book (P/B)0.68
Price to Sales (P/S)0.87
P/FCF Ratio5.08
Enterprise Value/Market Cap2.63
Enterprise Value/Revenue1.64
Enterprise Value/Gross Profit3.22
Enterprise Value/Ebitda2.28
Forecast
1Y Price Target
$41.55Price Target Upside28.84% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Civitas Resources Business Overview & Revenue Model
Company DescriptionCivitas Resources, Inc., an exploration and production company, focuses on the acquisition, development, and production of oil and natural gas in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg Basin of Colorado. As of December 31,2021, it had proved reserves 397.7 MMBoe comprising 143.6 MMbbls of crude oil, 106.0 MMbbls of natural gas liquids, and 888.5 Bcf of natural gas. The company was formerly known as Bonanza Creek Energy, Inc. Civitas Resources, Inc. was founded in 1999 and is based in Denver, Colorado.
How the Company Makes MoneyCivitas Resources generates revenue primarily through the exploration, drilling, and production of oil and natural gas. The company monetizes its output by selling crude oil, natural gas, and natural gas liquids to various markets, including refineries and distribution networks. Key revenue streams include the sale of produced hydrocarbons, which can be influenced by fluctuations in commodity prices. Additionally, Civitas may engage in hedging activities to stabilize cash flows against market volatility. Strategic partnerships with midstream companies ensure efficient transportation and processing of its products, further enhancing profitability. The company's focus on operational efficiency, cost management, and the integration of technology in its operations play a significant role in its revenue generation.
Civitas Resources Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant operational achievements and financial strategies that aim to improve shareholder value, including aggressive capital returns and efficiency gains. However, challenges such as leadership changes and concerns regarding market performance are noted.Q2-2025 Updates
Positive Updates
Enhanced Capital Return Program
Civitas Resources announced a reinstated and aggressive capital returns plan with a buyback authorization exceeding 25% of its market cap.
Operational Efficiency Gains
Drilling and completion efficiencies realized in each basin resulted in reduced well costs, with reductions of 7% in Delaware, 5% in Midland, and 3% in DJ.
Strong Second Quarter Results
Oil volumes grew 6% quarter-over-quarter, cash operating expenses fell by more than 10%, and the company generated nearly $750 million in adjusted EBITDA and over $120 million in adjusted free cash flow.
Asset Divestitures
Civitas significantly exceeded its target for non-core asset sales with agreements to divest $435 million in non-core DJ Basin assets, achieving a 4x multiple on 2026 cash flow.
Increased Hedging for Risk Reduction
The company increased its hedges to approximately 60% on oil for the remainder of the year, which is about double the usual levels.
Negative Updates
CEO Transition
The departure of the former CEO, Chris Doyle, and the appointment of an interim CEO, indicating potential leadership instability.
Challenges in Market Performance
Concerns about the current share price and the company's focus on improving its report card as seen in the stock value, reflecting market challenges.
Company Guidance
During the Civitas Resources second quarter 2025 earnings call, the company outlined several key metrics and strategic initiatives. They emphasized their commitment to maximizing free cash flow, with a target to achieve $4.5 billion in net debt by year's end, supported by a 60% hedge on oil for the remainder of the year. The company also highlighted a $750 million share repurchase authorization, representing about 28% of their market cap, and plans to allocate 50% of free cash flow after the base dividend to share buybacks. Operationally, Civitas reported oil volume growth of 6% quarter-over-quarter, with cash operating expenses down by more than 10% on a unit basis. They achieved nearly $750 million in adjusted EBITDA and over $120 million in adjusted free cash flow for the quarter. Additionally, they have executed asset divestitures worth $435 million, exceeding their target, and are on track with $100 million in cost optimization initiatives. The call also introduced Wouter van Kempen as the interim CEO following Chris Doyle's departure, emphasizing a focus on execution, performance, and cost leadership.Civitas Resources Financial Statement Overview
Summary
Civitas Resources demonstrates strong profitability and a stable financial position, with efficient operations reflected in solid margins. However, recent declines in revenue growth and free cash flow growth highlight potential challenges. The company should focus on managing rising debt levels and improving cash flow generation to sustain long-term growth.Income Statement
Civitas Resources shows strong profitability with a consistent gross profit margin around 40-45% and a net profit margin of approximately 15-22% over the years. However, recent revenue growth has been negative, indicating potential challenges in maintaining top-line growth. Despite this, the company maintains solid EBIT and EBITDA margins, reflecting efficient operations.75
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio, although it has increased recently. Return on equity is healthy, indicating effective use of equity to generate profits. The equity ratio suggests a strong equity base relative to total assets, but the rising debt levels could pose future risks.70
Positive
Cash Flow
Cash flow analysis shows a mixed picture. While operating cash flow remains robust, free cash flow growth has been negative recently, which could impact future investments. The operating cash flow to net income ratio is strong, indicating good cash conversion, but the free cash flow to net income ratio suggests room for improvement in cash generation relative to profits.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.81B | 5.20B | 3.48B | 3.79B | 930.61M | 218.09M |
| Gross Profit | 2.45B | 2.14B | 1.39B | 2.18B | 504.25M | 69.22M |
| EBITDA | 3.45B | 3.60B | 2.34B | 2.52B | 589.30M | 173.61M |
| Net Income | 756.91M | 838.72M | 784.29M | 1.25B | 178.92M | 103.53M |
Balance Sheet | ||||||
| Total Assets | 15.40B | 14.94B | 14.10B | 7.97B | 6.74B | 1.18B |
| Cash, Cash Equivalents and Short-Term Investments | 69.00M | 75.83M | 1.12B | 768.03M | 254.45M | 24.74M |
| Total Debt | 5.39B | 4.49B | 4.96B | 418.08M | 531.98M | 30.02M |
| Total Liabilities | 8.61B | 8.32B | 7.92B | 2.60B | 2.09B | 137.56M |
| Stockholders Equity | 6.79B | 6.63B | 6.18B | 5.37B | 4.65B | 1.05B |
Cash Flow | ||||||
| Free Cash Flow | 1.35B | 893.36M | 729.63M | 1.13B | 121.85M | 95.00M |
| Operating Cash Flow | 2.71B | 2.87B | 2.24B | 2.48B | 274.60M | 158.80M |
| Investing Cash Flow | -2.60B | -2.67B | -5.24B | -1.31B | 73.55M | -63.80M |
| Financing Cash Flow | -129.87M | -1.24B | 3.36B | -657.37M | -118.44M | -81.25M |
Civitas Resources Technical Analysis
Neutral
32.25
Price Trends
31.69
Positive
30.11
Positive
35.20
Negative
Market Momentum
0.24
Positive
47.15
Neutral
16.05
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIVI, the sentiment is Neutral. The current price of 32.25 is below the 20-day moving average (MA) of 33.72, above the 50-day MA of 31.69, and below the 200-day MA of 35.20, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 47.15 is Neutral, neither overbought nor oversold. The STOCH value of 16.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CIVI.
Civitas Resources Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | 4.84B | 7.65 | 19.52% | 2.68% | 58.35% | 210.80% | |
74 Outperform | $2.99B | 4.25 | 11.31% | 6.20% | 0.24% | -9.19% | |
72 Outperform | 2.52B | 4.25 | 25.23% | 6.73% | 2.98% | 7.94% | |
72 Outperform | 3.15B | 3.88 | 0.00% | 2.92% | 28.20% | 1.63% | |
71 Outperform | 3.84B | 14.43 | 5.48% | 4.74% | -18.08% | -49.36% | |
71 Outperform | 2.23B | -49.38 | 0.81% | 5.48% | 32.84% | -755.17% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
Performance Comparison
CIVI
Civitas Resources
32.25
-19.47
-37.65%
MUR
Murphy Oil
26.92
-7.36
-21.47%
NOG
Northern Oil And Gas
25.87
-9.42
-26.69%
SM
SM Energy
27.43
-12.99
-32.14%
CRC
California Resources Corp
57.82
6.77
13.26%
CRGY
Crescent Energy Company Class A
8.76
-2.17
-19.85%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.