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Civitas Resources, Inc. (CIVI)
:CIVI
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Civitas Resources
(NYSE:CIVI)
75Outperform
Positive Factors
Leadership
The appointment of Billy Helms to the Board introduces a well-respected industry veteran, which is seen as a positive move for the company's leadership.
Valuation
Civitas Resources shares are valued at $72, trading at a notable discount to peers, which could present an attractive investment opportunity.
Negative Factors
Debt and Leverage
Increased leverage and lower oil prices have made delevering and repurchasing stock challenging.
Financial Performance
Civitas reported disappointing 1Q25/2025 guidance with oil production guidance below both estimates and consensus.
Civitas Resources (CIVI) vs. S&P 500 (SPY)
Market Cap
$3.24B
Dividend Yield5.75%
Average Volume (3M)2.32M
Price to Earnings (P/E)4.1
Beta (1Y)1.04
Revenue Growth49.65%
EPS Growth-5.53%
CountryUS
Employees655
SectorEnergy
Sector Strength86
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)8.47
Shares Outstanding93,017,260
10 Day Avg. Volume2,534,620
30 Day Avg. Volume2,319,284
Financial Highlights & Ratios
PEG Ratio0.41
Price to Book (P/B)N/A
Price to Sales (P/S)0.62
Price to Cash Flow (P/CF)0.90
P/FCF Ratio0.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$59.55Price Target Upside63.42% 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 sale of crude oil, natural gas, and natural gas liquids (NGLs) extracted from its operations in the DJ Basin. The company's revenue model is centered around the exploration and production activities, where it drills and completes wells to extract hydrocarbons. Civitas Resources benefits from strategic partnerships and joint ventures that enhance its operational efficiency and access to technology and expertise. The company's earnings are influenced by factors such as commodity prices, production volumes, and operational costs. Additionally, Civitas Resources may engage in hedging activities to manage commodity price risks and stabilize cash flows.
Civitas Resources Financial Statement Overview
Summary
Civitas Resources demonstrates strong financial health with robust revenue growth and significant improvements in cash flow. The balance sheet shows low leverage and financial stability. Despite a remarkable gross profit margin, challenges are noted in EBIT margins, suggesting some operational difficulties.Income Statement
Civitas Resources has shown robust revenue growth, with a significant increase from $930.61 million in 2021 to $5.21 billion in 2024, marking a strong upward trajectory. The gross profit margin is exceptionally high at 99.40% for 2024, indicating efficient cost management. Net profit margin improved to 16.11% in 2024 from 8.40% in 2021, demonstrating enhanced profitability. However, the EBIT margin dropped significantly to 0.08% in 2024, reflecting potential operational challenges.85
Very Positive
Balance Sheet
The company maintains a strong equity base with a 44.35% equity ratio in 2024, highlighting financial stability. The debt-to-equity ratio has improved, moving to 0.00 in 2024 from 0.86 in 2020, indicating a reduction in leverage and a stronger balance sheet. Return on equity has decreased slightly to 12.65% in 2024 from 13.63% in 2022, impacted by lower net income relative to equity growth.78
Positive
Cash Flow
Civitas Resources has demonstrated significant growth in free cash flow, increasing from $121.85 million in 2021 to $2.87 billion in 2024, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is robust at 3.42 in 2024, indicating efficient conversion of earnings to cash. Free cash flow to net income ratio is high at 3.42, emphasizing strong cash flow relative to profitability.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.20B | 3.48B | 3.79B | 930.61M | 218.09M | Gross Profit |
| 2.14B | 1.39B | 2.18B | 504.25M | 69.22M | EBIT |
| 4.40M | 1.22B | 2.05B | 421.48M | 37.80M | EBITDA |
| 3.54B | 2.34B | 2.52B | 589.30M | 173.61M | Net Income Common Stockholders |
| 838.72M | 784.29M | 1.25B | 178.92M | 103.53M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 75.83M | 1.12B | 768.03M | 254.45M | 24.74M | Total Assets |
| 14.94B | 14.10B | 7.97B | 6.74B | 1.18B | Total Debt |
| 4.49B | 4.96B | 418.08M | 531.98M | 30.02M | Net Debt |
| 4.42B | 3.84B | -349.95M | 277.53M | 5.28M | Total Liabilities |
| 8.32B | 7.92B | 2.60B | 2.09B | 137.56M | Stockholders Equity |
| 6.63B | 6.18B | 5.37B | 4.65B | 1.05B |
| Cash Flow | Free Cash Flow | |||
| 893.36M | 729.63M | 1.13B | 121.85M | 95.00M | Operating Cash Flow |
| 2.87B | 2.24B | 2.48B | 274.60M | 158.80M | Investing Cash Flow |
| -2.67B | -5.24B | -1.31B | 73.55M | -63.80M | Financing Cash Flow |
| -1.24B | 3.36B | -657.37M | -118.44M | -81.25M |
Civitas Resources Technical Analysis
Neutral
36.44
Price Trends
44.13
Negative
45.93
Negative
52.07
Negative
Market Momentum
-2.47
Negative
45.12
Neutral
79.56
Neutral
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 36.44 is above the 20-day moving average (MA) of 34.90, below the 50-day MA of 44.13, and below the 200-day MA of 52.07, indicating a neutral trend. The MACD of -2.47 indicates Negative momentum. The RSI at 45.12 is Neutral, neither overbought nor oversold. The STOCH value of 79.56 is Neutral, 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 (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $6.45B | 7.22 | 19.67% | 1.87% | 23.47% | 0.80% | |
75 Outperform | $3.24B | 4.11 | 13.09% | 5.75% | 49.65% | -5.53% | |
75 Outperform | $4.87B | 12.96 | 20.06% | 2.15% | 7.25% | -4.99% | |
71 Outperform | $3.51B | 4.60 | 19.62% | 2.48% | 13.33% | -2.72% | |
64 Neutral | $46.60B | 10.20 | 12.20% | 5.23% | 31.55% | -9.00% | |
58 Neutral | $8.70B | 5.51 | -5.93% | 7.52% | -0.18% | -74.84% |
* Energy Sector Average
Performance Comparison
CIVI
Civitas Resources
36.44
-32.06
-46.80%
MTDR
Matador Resources
52.97
-14.43
-21.41%
SM
SM Energy
31.81
-17.00
-34.83%
FANG
Diamondback
161.01
-29.04
-15.28%
MGY
Magnolia Oil & Gas
25.14
0.50
2.03%
Civitas Resources Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -24.93% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Civitas Resources reported strong operational efficiencies and strategic expansions in 2024, generating substantial free cash flow and shareholder returns. However, the company faces challenges with workforce reductions, production declines, and a focus on debt reduction over aggressive shareholder returns, indicating a cautious approach amid market volatility.Highlights
Strong Free Cash Flow Generation
Civitas generated approximately $1.3 billion in free cash flow for 2024 and returned over 70% to shareholders through dividends and stock repurchases.
Operational Efficiencies in Midland Basin
Midland Basin well costs decreased by 15%, daily drilling footage increased by nearly 20%, and daily completion throughput increased by 50%.
Significant Inventory Extension
Civitas added nearly two years of future development in the Permian business unit and extended lateral lengths and working interest across the portfolio by 5%.
Successful Ground Game Activities
Strengthened both Midland and Delaware positions through over 50 trades, swaps, and new leasing with little to no cash outlay.
Record-Setting Wells in DJ Basin
Turned in-line the industry's first four-mile laterals in Colorado, achieving the state's highest 180-day cumulative oil production.
Strategic Bolt-on Acquisition
Acquired 19,000 acres in the Midland Basin with 130 locations, offset by a $300 million asset sales target primarily from the DJ Basin.
Lowlights
Reduction in Workforce
Announced a 10% reduction in workforce to streamline organizational structure and maintain a low-cost position.
Drop in Oil Production
First quarter production in 2025 expected to be the low point due to natural declines and low till counts exiting 2024, exacerbated by severe winter weather and unplanned third-party processing downtime.
Focus on Debt Reduction
Prioritizing debt reduction with a target of $4.5 billion for 2025, representing an $800 million reduction from 2024, indicating a shift away from aggressive shareholder returns.
Volatility and Cost Management Challenges
Encountered significant volatility in oil prices and higher LOE in the Permian due to winterization projects and increased workover activity.
Company Guidance
In the Civitas Resources Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for 2025 with a focus on maximizing free cash flow, targeting approximately $1.1 billion at a $70 WTI price. Key strategic initiatives include maintaining a leading cost structure, reducing debt by $800 million to reach a net debt target of $4.5 billion by year-end, and returning capital to shareholders, primarily through a $2 per share base dividend. Production is expected to average 150,000 to 155,000 barrels of oil per day, with capital investments of $1.8 billion to $1.9 billion, split evenly between the Permian and DJ Basins. The company also plans to execute a $300 million asset sales program, primarily from the DJ Basin, to offset a recent Midland Basin acquisition and extend its development runway in the Permian. The company aims to streamline its operations by reducing its workforce by 10% and enhancing operational efficiencies, while also focusing on ESG initiatives to further reduce emissions.Civitas Resources Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Civitas Resources Expands Board and Adjusts Leadership
Neutral
Feb 24, 2025
On February 24, 2025, Civitas Resources expanded its board of directors from nine to ten members and appointed Lloyd W. ‘Billy’ Helms, Jr. as the new director. Mr. Helms, with over 40 years of experience in the oil and gas industry, will serve on the Sustainability and Audit Committees and is recognized for his operational and technical expertise. Concurrently, the company terminated the employment of its Chief Operating Officer, T. Hodge Walker, and Chief Transformation Officer, Jeffrey S. Kelly, without cause. M. Christopher Doyle, the current President and CEO, assumed the additional role of principal operating officer. These changes reflect Civitas Resources’ strategic adjustments in its leadership to enhance operational efficiency and governance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.