Granite Ridge Resources (GRNT) AI Stock Analysis

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Granite Ridge Resources

(NYSE:GRNT)

49Neutral

Granite Ridge Resources' overall stock score reflects several challenges, including inconsistent profitability and high leverage, which weigh heavily on its financial performance. While strong cash flows and robust future production guidance offer some positive outlook, technical indicators and valuation concerns, such as high P/E ratio, suggest caution. The company's commitment to dividends and strategic partnerships provide some confidence in its future potential.

Positive Factors

Guidance and Forecast

The 2025 guidance beats on capex with inline oil production.

Production and Earnings

Higher oil production is expected to positively impact the company's earnings estimates.

Negative Factors

Free Cash Flow

Despite a strong growth outlook, the company is expected to generate negative free cash flow.

Natural Gas Realizations

There is a concern about weak natural gas realizations affecting the company's performance.

Operating Costs

Operating costs came in higher than expected between $6.25 - $7.25/boe.

Granite Ridge Resources (GRNT) vs. S&P 500 (SPY)

Market Cap

$647.81M

Dividend Yield9.02%

Average Volume (3M)580.16K

Price to Earnings (P/E)34.3

Beta (1Y)0.79

Revenue Growth-3.56%

EPS Growth-76.47%

CountryUS

Employees3

SectorEnergy

Sector Strength50

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)0.14

Shares Outstanding131,134,670

10 Day Avg. Volume504,111

30 Day Avg. Volume580,165

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.14

Price to Cash Flow (P/CF)2.90

P/FCF Ratio2.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$7.83

Price Target Upside58.50% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Granite Ridge Resources Business Overview & Revenue Model

Company DescriptionGranite Ridge Resources (GRNT) is a company operating in the energy sector, focusing on the exploration, development, and production of oil and natural gas resources. The company is involved in identifying and acquiring high-potential resource-rich properties, leveraging advanced technology and expertise to maximize extraction efficiency and output. Granite Ridge Resources aims to contribute to energy security while maintaining a commitment to sustainable and environmentally responsible practices.

How the Company Makes MoneyGranite Ridge Resources generates revenue primarily through the sale of oil and natural gas extracted from its owned or operated properties. The company's key revenue streams include crude oil sales, natural gas sales, and, at times, the sale of natural gas liquids (NGLs). Prices for these commodities can vary based on market conditions, influencing the company's earnings. Additionally, Granite Ridge Resources might engage in strategic partnerships or joint ventures to enhance its exploration and production capabilities, thereby potentially increasing its revenue opportunities. The company may also invest in technological advancements to improve recovery rates and operational efficiency, indirectly supporting its financial performance.

Granite Ridge Resources Financial Statement Overview

Summary

Granite Ridge Resources faces significant revenue generation and profitability challenges, as evidenced by recent financial metrics. While its equity position is solid, high leverage poses risks. However, strong operating cash flows indicate potential for recovery and stability if revenue issues are addressed.

Income Statement

Negative

Granite Ridge Resources' income statement shows significant volatility in revenue and profit margins. The most recent year reports zero revenue, leading to negative gross profit, though previous years showed stable revenue growth. Net profit margins have been inconsistent, reflecting challenges in maintaining profitability.

Balance Sheet

Neutral

The balance sheet indicates a high level of leverage with a substantial debt-to-equity ratio, although this has fluctuated over the years. The equity ratio remains strong, suggesting the company has a solid equity foundation. However, the decline in total assets and equity is a potential concern.

Cash Flow

Positive

The cash flow statement highlights strong operating cash flows, which have been consistent. Free cash flow has improved significantly, turning positive in the most recent year after a period of negative flows, demonstrating better financial health and operational efficiency.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
380.03M	394.07M	470.52M	273.09M	81.10M
	Gross Profit
354.02M	145.18M	422.12M	245.79M	60.04M
	EBIT
59.26M	117.26M	302.14M	4.40M	-30.02M
	EBITDA
219.97M	271.56M	382.94M	203.23M	62.94M
	Net Income Common Stockholders
18.76M	81.10M	262.34M	3.77M	-25.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.42M	60.86M	50.83M	740.35K	1.29M
	Total Assets
1.04B	927.10M	794.78M	17.00M	40.78M
	Total Debt
205.00M	110.00M	0.00	1.10M	6.40M
	Net Debt
195.58M	99.57M	-50.83M	359.65K	5.11M
	Total Liabilities
401.13M	255.46M	172.37M	2.02M	7.57M
	Stockholders Equity
635.35M	671.64M	622.40M	14.97M	33.21M
Cash Flow		Free Cash Flow
275.73M	-56.33M	111.70M	-213.81M	-50.58M
	Operating Cash Flow
275.73M	302.87M	346.39M	5.47M	66.81M
	Investing Cash Flow
-310.77M	-356.68M	-230.56M	21.28M	-116.74M
	Financing Cash Flow
33.72M	13.41M	-76.85M	-27.30M	52.07M

Granite Ridge Resources Technical Analysis

Technical Analysis Sentiment

Negative

Last Price4.94

Price Trends

50DMA

5.59

Negative

100DMA

5.90

Negative

200DMA

5.98

Negative

Market Momentum

MACD

-0.26

Negative

RSI

42.04

Neutral

STOCH

59.56

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRNT, the sentiment is Negative. The current price of 4.94 is below the 20-day moving average (MA) of 5.16, below the 50-day MA of 5.59, and below the 200-day MA of 5.98, indicating a bearish trend. The MACD of -0.26 indicates Negative momentum. The RSI at 42.04 is Neutral, neither overbought nor oversold. The STOCH value of 59.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GRNT.

Granite Ridge Resources Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
REPX	79 Outperform	$549.66M	6.09	19.07%	5.71%	15.30%	11.45%
VTLE	62 Neutral	$612.26M	2.02	-6.33%	―	26.15%	-114.03%
Sector *	55 Neutral	$7.11B	3.51	-6.23%	6.00%	>-0.01%	-51.70%
DK	50 Neutral	$811.06M	―	-108.21%	7.80%	-28.68%	-4373.94%
GRNT	49 Neutral	$647.81M	34.27	2.85%	9.02%	-3.56%	-76.47%
NBR	40 Underperform	$468.33M	―	-89.17%	―	-2.52%	-450.75%

* Energy Sector Average

Performance Comparison

GRNT

Granite Ridge Resources

4.94

-1.30

-20.83%

Delek US Holdings

13.11

-14.81

-53.04%

VTLE

Vital Energy

15.82

-39.92

-71.62%

NBR

Nabors Industries

29.83

-48.24

-61.79%

REPX

Riley Exploration Permian

25.54

0.20

0.79%

Granite Ridge Resources Earnings Call Summary

Earnings Call Date: Mar 6, 2025 | % Change Since: -6.62% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong production growth, successful partnership strategies, and cost efficiencies, which were somewhat offset by a reported net loss, decreased EBITDAX, and asset impairments. The forward-looking strategy and maintained dividends suggest confidence in future performance.

Highlights

Record Production in Fourth Quarter

Granite Ridge achieved a record production of 27,000 BOE per day in the fourth quarter, marking a 10% sequential increase.

Oil and Gas Production Exceeds Expectations

Gas production increased by 4% and oil production by 16% in the fourth quarter of 2024, surpassing previous expectations of a 10% gas production decline and modest oil increase.

Strong 2025 Production Guidance

Granite Ridge projects a 16% increase in production for 2025, with a targeted oil weighting of 52%.

Successful Operated Partnership Strategy

Investments in operated partnerships in 2024 yielded an estimated internal rate of return of 24% across 38 wells in the Delaware Basin.

Improved Cost Efficiency

Per unit lease operating expenses decreased by 7% in Q4 year-over-year, and full-year LOE improved by 8% over 2023.

Consistent Dividend Payouts

Granite Ridge maintained a regular quarterly dividend of $0.11 per share, with a projected robust dividend yield of over 7.5% for 2025.

Lowlights

Fourth Quarter Net Loss

Reported a net loss of $11.6 million or $0.09 per diluted share in the fourth quarter of 2024.

Decrease in Adjusted EBITDAX for 2024

Adjusted EBITDAX for 2024 was $290.8 million, down from $305.4 million in 2023, attributed to lower realized commodity prices and asset divestitures.

Impairments in Williston Basin Assets

Impairment in the Williston Basin due to lack of additional CapEx investment and maturing of assets.

Company Guidance

During Granite Ridge Resources’ earnings call, the company provided robust guidance for 2025, highlighting a planned capital expenditure (CapEx) range of $300 million to $320 million, with 56% allocated to Operative Partnerships and the rest to traditional non-operated interests. The company anticipates a 16% production growth, reaching 29,000 barrels of oil equivalent per day, with an oil weighting of 52%. They expect a steady gas production through the first three quarters, with an increase in the fourth quarter. They are targeting full-cycle returns greater than 25%, with a notable internal rate of return of 24% from their initial projects. Granite Ridge also projected a strong 15% growth in production per share and emphasized maintaining a target leverage of less than 1.25 times net debt to adjusted EBITDAX. They plan to fund their CapEx and fixed dividend from internally generated cash flow and existing liquidity, with an option to increase CapEx by $60 million to $80 million, depending on market conditions.

Granite Ridge Resources Corporate Events

Business Operations and Strategy

Granite Ridge Resources Updates Investors on Strategy

Neutral

Jan 29, 2025

On January 29, 2025, Granite Ridge Resources released an Investor Presentation on its website, providing stakeholders with updated insights into its business strategy and market positioning. This release may impact investor perceptions and engagement as the company continues to disseminate relevant information periodically.

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.