Epsilon Energy (EPSN) AI Stock Analysis

• Market Cap: $100.85M
• Dividend Yield: 5.47%
• Average Volume (3M): 150.79K
• Price to Earnings (P/E): 17.2
• Beta (1Y): 0.45
• Revenue Growth: 46.76%
• EPS Growth: 11.48%
• Country: US
• Employees: 10
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.09
• Shares Outstanding: 22,067,213
• 10 Day Avg. Volume: 146,524
• 30 Day Avg. Volume: 150,788
• PEG Ratio: -0.99
• Price to Book (P/B): 1.41
• Price to Sales (P/S): 4.32
• P/FCF Ratio: -6.90
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 2.17
• Enterprise Value/Gross Profit: 4.57
• Enterprise Value/Ebitda: 4.31
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.34
• Revenue Forecast (FY): $50.87M

• Rating: 73 Outperform
• Price Target: $5.50 ▲(15.55% Upside)

Epsilon Energy's overall stock score reflects strong financial performance and strategic growth initiatives, particularly the recent acquisition and improved credit facility. While technical indicators suggest some caution, the company's valuation and positive earnings call sentiment support a favorable outlook.

Positive Factors

Strategic Acquisition

The acquisition of Peak Exploration adds significant oil-weighted production and inventory, enhancing Epsilon's growth potential and market position.

Financial Stability

The new credit facility enhances liquidity and financial stability, allowing Epsilon to pursue growth opportunities and manage debt effectively.

Revenue Growth

Strong revenue growth indicates robust business performance and effective market strategies, supporting long-term financial health.

Negative Factors

Profitability Pressure

Decreasing margins suggest challenges in maintaining profitability, which could impact future earnings and financial performance.

Marcellus Investment Uncertainty

Uncertainty in Marcellus investment plans could limit growth opportunities and affect long-term strategic positioning in this key region.

Sub-$2 Net Gas Pricing

Low gas pricing in Marcellus impacts revenue and profitability, posing a risk to financial performance if sustained.

Epsilon Energy Business Overview & Revenue Model

Company Description

Epsilon Energy Ltd. (EPSN) is an independent energy company engaged in the exploration, development, and production of natural gas and oil. The company primarily operates in the United States, focusing on unconventional natural gas resources, particularly in the Marcellus Shale region. Epsilon Energy is dedicated to advancing its portfolio through efficient operations, strategic acquisitions, and investments in sustainable energy solutions.

How the Company Makes Money

Epsilon Energy generates revenue primarily through the sale of natural gas and oil produced from its wells. The company has a diversified revenue model that includes the direct sale of hydrocarbons to various customers, including utilities and industrial users. Key revenue streams consist of production from its owned and operated properties in the Marcellus Shale, as well as any additional revenue from joint ventures or partnerships with other energy companies that allow for shared resources and infrastructure. The pricing of natural gas and oil can fluctuate significantly based on market conditions, which impacts revenue. Additionally, Epsilon Energy may benefit from hedging strategies that protect against price volatility, further stabilizing its income. The company also explores opportunities for strategic partnerships that could enhance its operational efficiencies and market access, thereby contributing to its overall earnings.

Epsilon Energy Financial Statement Overview

Summary

Epsilon Energy demonstrates solid financial performance with strong revenue growth and profitability. The company maintains a conservative balance sheet with low leverage, enhancing financial stability. However, there is room for improvement in profitability and cash flow efficiency.

Income Statement

Epsilon Energy shows a solid performance with a consistent increase in revenue, evidenced by a 3.85% growth in the TTM period. The gross profit margin of 46.09% and net profit margin of 11.75% indicate strong profitability. However, the margins have decreased compared to previous years, suggesting some pressure on profitability. The EBIT and EBITDA margins are healthy at 22.40% and 50.64%, respectively, reflecting efficient operations.

Balance Sheet

The company maintains a very low debt-to-equity ratio of 0.42%, indicating minimal leverage and financial risk. The return on equity (ROE) is modest at 5.24%, which is lower than previous years, suggesting a need for improved profitability. The equity ratio is strong, reflecting a solid capital structure with a high proportion of equity financing.

Cash Flow

Epsilon Energy demonstrates robust cash flow generation with a significant free cash flow growth rate of 55.99% in the TTM period. The operating cash flow to net income ratio of 3.34 indicates strong cash conversion. However, the free cash flow to net income ratio is lower at 0.26, suggesting that a smaller portion of net income is being converted into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	45.71M	31.52M	30.73M	69.96M	42.40M	24.43M
Gross Profit	21.74M	11.81M	14.18M	54.11M	27.15M	6.39M
EBITDA	23.04M	13.79M	17.91M	54.00M	22.80M	11.12M
Net Income	5.88M	1.93M	6.95M	35.35M	11.63M	875.17K
Balance Sheet
Total Assets	126.29M	120.45M	124.04M	123.86M	99.46M	86.68M
Cash, Cash Equivalents and Short-Term Investments	12.77M	6.52M	32.18M	45.24M	26.50M	13.27M
Total Debt	387.06K	476.91K	563.38K	35.30K	0.00	0.00
Total Liabilities	26.07M	23.73M	23.43M	19.62M	20.20M	17.66M
Stockholders Equity	100.22M	96.73M	100.61M	104.25M	79.26M	69.02M
Cash Flow
Free Cash Flow	10.36M	-19.73M	-457.78K	29.94M	15.12M	8.29M
Operating Cash Flow	25.61M	16.83M	18.19M	38.01M	20.01M	14.82M
Investing Cash Flow	-15.68M	-16.66M	-38.38M	-7.87M	-4.44M	-6.52M
Financing Cash Flow	-5.37M	-7.32M	-11.73M	-11.35M	-2.34M	-9.08M

Epsilon Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EPSN, the sentiment is Negative. The current price of 4.76 is below the 20-day moving average (MA) of 4.79, above the 50-day MA of 4.75, and below the 200-day MA of 5.98, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 41.19 is Neutral, neither overbought nor oversold. The STOCH value of 19.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EPSN.

Epsilon Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EPSN	73 Outperform	$100.85M	17.23	5.92%	5.47%	46.76%	11.48%
IMPP	72 Outperform	$171.00M	3.58	8.80%	―	-9.98%	-19.48%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
EPM	54 Neutral	$122.46M	-569.35	-0.19%	13.60%	-2.23%	-104.00%
AMPY	53 Neutral	$192.26M	-6.87	-6.90%	―	-9.46%	-144.89%
GTE	50 Neutral	$135.89M	-1.56	-21.91%	―	-1.58%	-271.90%
EP	41 Neutral	$105.26M	-5.88	-31.43%	―	-15.13%	17.34%

Epsilon Energy Corporate Events

Epsilon Energy Finalizes Acquisition with Share Issuance

On November 20, 2025, Epsilon Energy Ltd. announced the issuance of 2,234,847 common shares as part of the acquisition of Peak BLM Lease LLC, which was finalized on November 14, 2025. This issuance was made following the determination that the Resolution Date, as defined in the purchase agreement, had occurred, and no further consideration is due under the agreement.

Epsilon Energy Completes Acquisition of Peak Exploration

Epsilon Energy Ltd. announced the completion of its acquisition of Peak Exploration and Production LLC and Peak BLM Lease LLC, following shareholder approval at a special meeting on November 12, 2025. The acquisition involved issuing 5,681,489 common shares, with additional shares or cash contingent on regulatory approvals. The company’s credit facility was increased to $80 million, and loans were used to repay Peak Companies’ existing debt. Sixteen former Peak employees joined Epsilon, and Bryan H. Lawrence and Jack Vaughn were appointed to the board, marking a significant step in Epsilon’s growth strategy.

Epsilon Energy Secures New Credit Facility

On October 10, 2025, Epsilon Energy Ltd. closed a new and revised senior secured reserve-based revolving credit facility with Frost Bank and Texas Capital Bank, replacing its previous facility. The new credit facility, which has a four-year term and an initial borrowing base of $47.5 million, supports Epsilon’s existing US upstream assets and will be increased upon the acquisition of the Peak companies later in Q4 2025. This financial move is expected to enhance Epsilon’s liquidity and balance sheet, enabling the company to comfortably close its announced acquisitions while maintaining financial stability.