Epsilon Energy (EPSN) AI Stock Analysis

• Market Cap: $142.62M
• Dividend Yield: 3.68%
• Average Volume (3M): 57.97K
• Price to Earnings (P/E): 73.7
• Beta (1Y): 0.55
• Revenue Growth: 2.58%
• EPS Growth: -71.42%
• Country: US
• Employees: 10
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.09
• Shares Outstanding: 22,008,766
• 10 Day Avg. Volume: 49,357
• 30 Day Avg. Volume: 57,972
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.78
• Price to Cash Flow (P/CF): 7.50
• P/FCF Ratio: 7.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $8.40
• Price Target Upside: 29.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Epsilon Energy's overall stock score reflects a balance of strong financial stability and positive technical indicators, tempered by high valuation and recent profitability challenges. The positive outlook from the earnings call and the new share repurchase program further support its potential for growth. However, the company faces challenges in the natural gas market and managing investments effectively.

Epsilon Energy Business Overview & Revenue Model

Company Description

Epsilon Energy (EPSN) is an independent oil and natural gas company engaged in the acquisition, development, and production of oil and natural gas reserves. The company is primarily focused on leveraging its technical expertise to optimize the value of its assets in the United States, with operations concentrated in the Marcellus Shale in Pennsylvania and the Anadarko Basin in Oklahoma. Epsilon Energy is committed to efficient and responsible resource development, aiming to deliver sustainable growth and value to its stakeholders.

How the Company Makes Money

Epsilon Energy makes money through the exploration, development, and production of oil and natural gas. The company's primary revenue streams come from the sale of these commodities to energy markets and third-party purchasers. Epsilon Energy's operations in the Marcellus Shale and Anadarko Basin provide access to significant reserves, allowing the company to capitalize on fluctuating energy prices. Additionally, Epsilon may engage in strategic partnerships or joint ventures to enhance its operational efficiency and expand its asset base. Factors such as commodity price volatility, production levels, and cost management significantly influence the company's earnings.

Epsilon Energy Financial Statement Overview

Summary

Epsilon Energy shows financial stability with a strong balance sheet and solid cash generation. However, recent declines in profitability and negative free cash flow highlight challenges in maintaining growth and managing investments.

Income Statement

Epsilon Energy's revenue experienced fluctuations, with a significant decline from 2022 to 2023. The gross profit margin remains strong, but net profit margin has decreased in the latest year indicating increased costs or reduced efficiency. The EBIT and EBITDA margins have also seen a decline, reflecting pressure on operational efficiency. Overall, the income statement shows potential for profitability but highlights recent challenges in maintaining consistent growth.

Balance Sheet

The balance sheet reflects a strong equity position with low leverage, as evidenced by a low debt-to-equity ratio. The company has maintained a robust equity ratio, indicating financial stability. However, the declining return on equity suggests challenges in generating profits from shareholder investments. Overall, the balance sheet is stable with low risk, but the company faces profitability challenges.

Cash Flow

Operating cash flow has been consistently positive, but free cash flow has turned negative in recent years due to high capital expenditures. The operating cash flow to net income ratio remains favorable, indicating efficient cash generation relative to earnings. However, the negative free cash flow to net income ratio indicates challenges in covering investment needs without impacting cash reserves. Overall, the cash flow statement shows sustainable operations but highlights strain on cash due to investment activities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
31.52M	30.73M	69.96M	42.40M	24.43M
	Gross Profit
11.81M	14.18M	54.11M	27.15M	6.39M
	EBIT
3.42M	5.42M	46.97M	20.61M	821.45K
	EBITDA
13.70M	17.91M	53.43M	22.80M	11.12M
	Net Income Common Stockholders
1.93M	6.95M	35.35M	11.63M	875.17K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.52M	32.18M	45.24M	26.50M	13.27M
	Total Assets
120.45M	124.04M	123.86M	99.46M	86.68M
	Total Debt
476.91K	563.38K	35.30K	0.00	0.00
	Net Debt
-6.04M	-12.84M	-45.20M	-26.50M	-13.27M
	Total Liabilities
23.73M	23.43M	19.62M	20.20M	17.66M
	Stockholders Equity
96.73M	100.61M	104.25M	79.26M	69.02M
Cash Flow		Free Cash Flow
-19.39M	-457.78K	29.94M	15.12M	8.29M
	Operating Cash Flow
16.83M	18.19M	38.01M	20.01M	14.82M
	Investing Cash Flow
-16.66M	-38.38M	-7.87M	-4.44M	-6.52M
	Financing Cash Flow
-7.32M	-11.73M	-11.35M	-2.34M	-9.08M

Epsilon Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.48
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EPSN, the sentiment is Positive. The current price of 6.48 is below the 20-day moving average (MA) of 6.70, below the 50-day MA of 6.60, and above the 200-day MA of 5.87, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 47.27 is Neutral, neither overbought nor oversold. The STOCH value of 58.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EPSN.

Epsilon Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EPSN	70 Neutral	$142.62M	73.72	1.95%	3.68%	2.58%	-71.42%
PHX	69 Neutral	$149.41M	61.76	1.89%	3.81%	―	―
Sector *	55 Neutral	$6.97B	3.35	-6.10%	6.00%	-0.44%	-51.04%
EPM	54 Neutral	$147.98M	88.89	1.95%	11.11%	-10.60%	-90.09%
GTE	52 Neutral	$169.75M	23.57	0.79%	―	-2.37%	―
REI	51 Neutral	$185.49M	2.67	8.20%	―	1.46%	-38.55%
WTI	43 Neutral	$174.21M	―	203.83%	3.39%	-1.39%	-655.53%

Epsilon Energy Corporate Events

Epsilon Energy Launches New Share Repurchase Program

Epsilon Energy Ltd., a North American natural gas and oil production company, announced a new share repurchase program and the redetermination of its borrowing base on February 13, 2025. The company terminated its previous issuer bid and approved a new one-year repurchase initiative to buy back up to 2,200,876 common shares, accounting for 10% of its outstanding shares, for up to $13 million. This program aims to enhance shareholder value by leveraging available cash without incurring debt. Additionally, Epsilon’s borrowing base was redetermined at $45 million by Frost Bank, effective February 10, 2025, stabilizing the company’s financial position until the next reassessment.