Evolution Petroleum (EPM) AI Stock Analysis

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Evolution Petroleum

(NYSE MKT:EPM)

Rating:56Neutral

Price Target:

$4.50

▲(0.45%Upside)

Evolution Petroleum's overall score reflects significant challenges in financial performance, especially in profitability and cash flow. While the balance sheet remains strong, technical indicators suggest cautious sentiment. Valuation is concerning due to recent net losses, though a high dividend yield provides some support. Positive steps from recent acquisitions and a commitment to dividends are encouraging, but they are offset by operational setbacks and financial losses.

Evolution Petroleum (EPM) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$147.87M

Dividend Yield11.14%

Average Volume (3M)158.43K

Price to Earnings (P/E)89.3

Beta (1Y)0.72

Revenue Growth3.79%

EPS Growth-131.01%

CountryUS

Employees11

SectorEnergy

Sector Strength45

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)-0.07

Shares Outstanding34,307,640

10 Day Avg. Volume179,194

30 Day Avg. Volume158,426

Financial Highlights & Ratios

PEG Ratio1.33

Price to Book (P/B)2.01

Price to Sales (P/S)0.00

P/FCF Ratio5.05

Enterprise Value/Market Cap0.96

Enterprise Value/Revenue0.41

Enterprise Value/Gross Profit8.59

Enterprise Value/Ebitda1.27

Forecast

1Y Price Target

$5.10

Price Target Upside13.84% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Evolution Petroleum Business Overview & Revenue Model

Company DescriptionEvolution Petroleum Corporation (EPM) is a Houston-based independent energy company focused on the acquisition, development, and production of oil and natural gas reserves within the United States. The company primarily operates in the upstream sector of the oil and gas industry, specializing in enhancing the recovery of hydrocarbons through improved recovery techniques for mature oil and natural gas fields. EPM's core assets include interests in properties located in key basins across the country, with an emphasis on maximizing the value and longevity of existing reserves.

How the Company Makes MoneyEvolution Petroleum Corporation generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids (NGLs) extracted from its operated and non-operated properties. The company employs enhanced oil recovery (EOR) techniques to maximize production from mature fields, thereby increasing the recoverable reserves and extending the life of existing wells. Key revenue streams include the sale of produced hydrocarbons in the open market, as well as through long-term contracts with refiners, marketers, and distributors. EPM's earnings are influenced by market prices for oil and gas, production volumes, and operational efficiencies. Partnerships and joint ventures with other exploration and production companies also play a significant role in leveraging expertise and resources to optimize field development and production strategies.

Evolution Petroleum Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q3-2025)

% Change Since: 0.22%|

Next Earnings Date:Sep 16, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant achievements such as the successful Tex-Mex acquisition and strong natural gas revenue growth, which were offset by challenges including a decline in total revenue and production, as well as a net loss for the quarter. The company's commitment to dividends and financial flexibility provides a positive outlook, but operational setbacks and financial losses temper the overall sentiment.

Q3-2025 Updates

Positive Updates

Tex-Mex Acquisition and Chaveroo Wells Performance

Subsequent to the quarter end, Evolution Petroleum closed the Tex-Mex acquisition and brought online four new wells in the Chaveroo development block, contributing more than 850 net barrels of oil equivalent per day. This is expected to benefit fiscal fourth quarter production and cash flow.

Strong Natural Gas Revenue Growth

Natural gas revenue rose 33% year-over-year to $7.8 million, and NGL revenue increased by 14% to $3 million, partially offsetting a 19% decline in oil revenue. This demonstrates the resilience of the company's diversified portfolio.

Dividend Declaration

The Board declared a cash dividend of $0.12 per share, marking the 47th consecutive quarter of issuing a dividend and the 12th consecutive quarter at this rate, reflecting the company's commitment to returning capital to shareholders.

Increased Liquidity and Credit Facility Expansion

Evolution Petroleum has total liquidity of $20.1 million, with borrowings of $35.5 million. The company also received approval to increase its credit facility commitments to $65 million, providing greater financial flexibility.

Negative Updates

Decline in Overall Revenue and Production

Total revenues decreased by 2% year-over-year to $22.6 million, driven by an 8% decrease in production volumes due to downtime at Barnett and maintenance at Delhi.

Net Loss Reported

The company reported a net loss of $2.2 million, or $0.07 per share, compared to net income of $0.3 million or $0.01 per share in the same period last year.

Operational Challenges at Delhi and Barnett

Production was affected by planned maintenance at Delhi and weather-related downtime in Barnett, leading to a 7.5% decline in total production year-over-year.

Company Guidance

During the Evolution Petroleum Fiscal Third Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance. Evolution Petroleum reported a total revenue of $22.6 million, a 2% year-over-year decrease, driven primarily by an 8% decrease in production volumes, which was partially offset by a 7% increase in average realized commodity prices. The company highlighted the completion of the Tex-Mex acquisition, which contributes approximately 440 net barrels of oil equivalent per day. Additionally, four new wells in the Chaveroo development block are now online, contributing more than 850 net barrels of oil equivalent per day. The company maintains a strong hedging strategy, with about 40% of oil volumes hedged at prices above $70 through the fiscal year-end. Adjusted EBITDA was reported at $7.4 million, a decrease from the previous year, but 30% higher than the previous quarter due to improved commodity prices. The company also declared a quarterly cash dividend of $0.12 per share, marking its 47th consecutive quarterly dividend and emphasizing a commitment to returning capital to shareholders. Looking ahead, Evolution Petroleum plans to focus on preserving financial flexibility, sustaining dividends, and pursuing growth opportunities, particularly in gas-weighted areas, while delaying certain oil-weighted developments due to market conditions.

Evolution Petroleum Financial Statement Overview

Summary

Evolution Petroleum faces challenges in profitability and cash flow, despite a stable balance sheet. The income statement shows declining revenue and profit margins, and cash flow issues are evident with negative free cash flow. However, the balance sheet remains strong with low leverage and a healthy equity ratio.

Income Statement

Neutral

Evolution Petroleum's income statement reveals fluctuating revenue with a notable decline in the TTM period, which is concerning. The gross profit margin has decreased from 42.5% in 2023 to 20.4% TTM, indicating pressure on profitability. The net profit margin also fell significantly from 27.4% in 2023 to 2.0% TTM, reflecting increased costs or lower revenue. Additionally, EBIT and EBITDA margins have decreased, emphasizing the need for efficiency improvements.

Balance Sheet

Positive

The balance sheet is relatively strong, showcasing a low debt-to-equity ratio of 0.0002 in the TTM period, indicating low leverage. Despite this, the return on equity has dropped from 38.2% in 2023 to 2.3% TTM, suggesting decreased profitability. The equity ratio is healthy at 47.6% TTM, reflecting a solid financial foundation.

Cash Flow

Negative

Cash flow analysis highlights challenges, with a negative free cash flow of -$17.2 million TTM, a deterioration from -$26.9 million in 2023. The operating cash flow to net income ratio is strong at 15.1 TTM, but the free cash flow to net income ratio is negative, signaling cash management issues. The company needs to address these cash flow concerns to improve financial health.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
85.96M	85.88M	128.51M	108.93M	32.70M	29.60M
	Gross Profit
16.56M	19.00M	54.70M	52.22M	11.16M	10.48M
	EBIT
5.24M	7.91M	45.11M	45.38M	4.23M	5.25M
	EBITDA
23.60M	27.02M	59.39M	49.67M	-16.15M	11.01M
	Net Income Common Stockholders
-704.00K	4.08M	35.22M	32.63M	-16.44M	5.94M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.19M	6.45M	11.03M	8.28M	5.28M	19.66M
	Total Assets
91.69M	162.88M	128.32M	148.05M	76.71M	92.14M
	Total Debt
0.00	39.66M	125.00K	21.25M	4.02M	84.98K
	Net Debt
-27.19M	33.21M	-10.91M	12.97M	-1.26M	-19.58M
	Total Liabilities
15.49M	81.75M	36.22M	72.53M	22.11M	18.01M
	Stockholders Equity
76.20M	81.13M	92.09M	75.51M	54.59M	74.12M
Cash Flow		Free Cash Flow
29.26M	-26.90M	44.28M	-2.41M	-14.04M	1.33M
	Operating Cash Flow
30.58M	22.73M	51.27M	52.46M	4.73M	12.40M
	Investing Cash Flow
-7.54M	-49.63M	-6.99M	-54.87M	-18.77M	-11.06M
	Financing Cash Flow
-20.50M	22.32M	-41.53M	5.42M	-349.43K	-13.22M

Evolution Petroleum Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price4.48

Price Trends

50DMA

4.52

Negative

100DMA

4.82

Negative

200DMA

4.97

Negative

Market Momentum

MACD

>-0.01

Negative

RSI

55.04

Neutral

STOCH

34.34

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EPM, the sentiment is Neutral. The current price of 4.48 is above the 20-day moving average (MA) of 4.31, below the 50-day MA of 4.52, and below the 200-day MA of 4.97, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 55.04 is Neutral, neither overbought nor oversold. The STOCH value of 34.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EPM.

Evolution Petroleum Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EPSN	76 Outperform	$157.64M	35.69	4.45%	3.49%	35.21%	-9.18%
PHX	69 Neutral	$163.45M	23.46	5.55%	3.48%	―	―
WTI	57 Neutral	$205.24M	―	203.83%	2.88%	-5.05%	-383.38%
Sector *	57 Neutral	$7.06B	3.04	-3.49%	5.80%	0.53%	-50.39%
EPM	56 Neutral	$147.87M	89.30	-1.24%	11.14%	3.79%	-131.01%
GTE	53 Neutral	$167.11M	21.67	-4.07%	―	-2.39%	-425.29%
REI	50 Neutral	$163.15M	2.23	8.52%	―	-4.51%	-10.09%

* Energy Sector Average

Performance Comparison

EPM

Evolution Petroleum

4.48

-0.74

-14.18%

GTE

Gran Tierra Energy

4.76

-4.45

-48.32%

PHX

PHX Minerals

4.31

1.09

33.85%

WTI

W&T Offshore

1.45

-0.75

-34.09%

REI

Ring Energy

0.79

-1.12

-58.64%

EPSN

Epsilon Energy

6.98

1.78

34.23%

Evolution Petroleum Corporate Events

DividendsBusiness Operations and StrategyFinancial Disclosures

Evolution Petroleum Reports Q3 Loss, Declares Dividend

Neutral

May 13, 2025

On May 13, 2025, Evolution Petroleum announced its fiscal third-quarter results, revealing a net loss of $2.2 million, despite a 30% increase in adjusted EBITDA from the previous quarter. The company declared a $0.12 per share dividend for the fourth quarter of 2025, marking its 47th consecutive quarterly dividend, and highlighted the successful acquisition of non-operated oil and gas assets, which are expected to enhance future production.

The most recent analyst rating on (EPM) stock is a Buy with a $8.25 price target. To see the full list of analyst forecasts on Evolution Petroleum stock, see the EPM Stock Forecast page.

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.