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Granite Ridge Resources, Inc. (GRNT)
:GRNT
US Market

Granite Ridge Resources (GRNT) AI Stock Analysis

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Granite Ridge Resources

(NYSE:GRNT)

Rating:66Neutral
Price Target:
$7.00
▲(11.64%Upside)
Granite Ridge Resources exhibits strong operational efficiency and cash flow, supported by strategic hedging. However, high P/E ratio and overbought technical indicators suggest caution. Despite declining oil prices and potential debt increase, the company's robust financial strategies provide stability.
Positive Factors
Financial Guidance
The 2025 guidance beats on capex with inline oil production.
Production Levels
4Q24 sees stronger than expected production.
Negative Factors
Cash Flow
Despite a strong growth outlook, the company is expected to generate negative free cash flow.
Operating Costs
Operating costs came in higher than expected between $6.25 - $7.25/boe.
Ownership Structure
There is an equity overhang concern due to Grey Rock owning approximately 50% of the company.

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

Granite Ridge Resources Business Overview & Revenue Model

Company DescriptionGranite Ridge Resources (GRNT) is a company operating within the energy sector, primarily focusing on the exploration and production of oil and natural gas. The company is involved in identifying, acquiring, and managing energy resources across various geographical locations, with an emphasis on optimizing production and maximizing resource recovery. Granite Ridge Resources leverages advanced technology and industry expertise to deliver reliable and efficient energy solutions.
How the Company Makes MoneyGranite Ridge Resources generates revenue primarily through the sale of crude oil and natural gas. The company explores and develops oil and gas reserves, extracting these resources to sell them in the commodities market. Key revenue streams include the direct sale of oil and gas products to refineries and other energy companies. Additionally, Granite Ridge Resources may engage in strategic partnerships and joint ventures to enhance its exploration and production capabilities, thus potentially increasing its revenue. The company's earnings are significantly influenced by factors such as global oil and gas prices, production volumes, and operational efficiency.

Granite Ridge Resources Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 25.15%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
Granite Ridge Resources reported a strong first quarter with significant production increases, improved financial performance, and a solid cost structure. However, market volatility and declining oil prices pose challenges, impacting CapEx decisions and potentially increasing debt. Despite these challenges, the company's strong hedging position and leverage ratio provide a buffer against market fluctuations.
Q1-2025 Updates
Positive Updates
Significant Increase in Production
Granite Ridge Resources achieved a production rate of over 29,000 barrels of oil equivalent per day, reflecting a 23% increase compared to the same period last year.
Strong Financial Performance
The company generated $91 million of adjusted EBITDAX, surpassing internal projections. Total revenue for the quarter was $122.9 million, up nearly $34 million from the same period last year.
Improved Cost Structure
LOE reported at $6.17 per BOE, 13% lower than last year. Operating margin improved from 83% to 87% year-over-year.
Natural Gas Revenue Growth
Revenue from natural gas more than doubled to $31 million, with realized prices at $3.97 per Mcf compared to $1.84 per Mcf a year ago.
Strong Leverage Position and Hedging
Granite Ridge maintains a leverage ratio of 0.7x net debt to adjusted EBITDA and has 75% of production hedged through 2026.
Negative Updates
Market Volatility Impacting CapEx Plans
Due to recent market volatility, the company decided to proceed with a base case CapEx of $310 million instead of an accelerated scenario of $380 million.
Oil Price Decline
Challenges noted with oil prices falling below $60 per barrel, impacting overall financial outlook and flexibility.
Potential Increase in Debt
The company anticipates $60 million in incremental debt due to the current hydrocarbon price environment.
Company Guidance
During the Granite Ridge Resources First Quarter 2025 Earnings Conference Call, significant guidance and metrics were provided. The company achieved a production rate of over 29,000 barrels of oil equivalent per day, marking a 23% increase from the previous year, and generated $91 million of adjusted EBITDAX. Notably, they reported a 39% increase in oil volumes and a 10% increase in natural gas volumes, with a production growth target of 16% for the year. The cost structure saw improvement, with LOE reduced to $6.17 per BOE, 13% lower than last year. The company is approximately 75% hedged through 2026 and maintains a leverage ratio of 0.7x net debt to adjusted EBITDA. Despite market volatility, they plan to proceed with a base CapEx scenario of $310 million, prioritizing full cycle returns and efficient cost management while maintaining flexibility to adapt to market conditions. The company reaffirmed its 2025 guidance with expected production of up to 58,000 BOE per day, maintaining a 9% dividend yield and a capital allocation primarily directed toward operated partnerships, which will account for 60% of their capital this year.

Granite Ridge Resources Financial Statement Overview

Summary
Granite Ridge Resources exhibits strong operational efficiency and cash flow generation, but profitability remains a concern with declining net income margins. The balance sheet is stable with reasonable leverage, but the company should focus on improving its profitability to enhance shareholder returns. The overall financial health is moderate, with good cash flow prospects but challenges in sustaining profitability.
Income Statement
72
Positive
Granite Ridge Resources shows a mixed performance on its income statement. The TTM gross profit margin stands at 48.4%, indicating strong cost management. However, the net profit margin for the TTM is only 3%, reflecting challenges in converting revenues into net income. Revenue growth was inconsistent, with a recent TTM increase from the previous annual report. EBIT and EBITDA margins are healthy at 19.9% and 53.4%, respectively, but net income has significantly declined from previous years.
Balance Sheet
65
Positive
The balance sheet displays a moderate level of leverage with a debt-to-equity ratio of 0.40 in TTM, which is manageable but increased compared to previous years. The equity ratio is strong at 58.1%, indicating a solid equity base relative to total assets. Return on equity (ROE) is low at 1.95% in TTM, reflecting weak profitability in relation to shareholder equity.
Cash Flow
78
Positive
The cash flow statement reveals robust operating cash flow, with an impressive operating cash flow to net income ratio of 33.7. Free cash flow has significantly improved to $128.5 million in TTM, demonstrating effective management of capital expenditures. Free cash flow to net income ratio is strong, indicating that the company can generate cash beyond its earnings.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue413.96M380.03M394.07M470.52M273.09M81.10M
Gross Profit200.26M120.03M145.18M422.12M245.79M60.04M
EBITDA220.95M219.97M271.56M382.94M203.23M62.94M
Net Income12.35M18.76M81.10M262.34M3.77M-25.77M
Balance Sheet
Total Assets1.09B1.06B927.10M794.78M17.00M40.78M
Cash, Cash Equivalents and Short-Term Investments37.92M41.20M60.86M50.83M740.35K1.29M
Total Debt250.00M205.00M110.00M0.001.10M6.40M
Total Liabilities456.02M401.13M255.46M172.37M2.02M7.57M
Stockholders Equity631.41M635.35M671.64M622.40M14.97M33.21M
Cash Flow
Free Cash Flow128.51M-71.26M-56.33M111.70M-213.81M-50.58M
Operating Cash Flow416.01M275.73M302.87M346.39M5.47M66.81M
Investing Cash Flow-492.34M-310.77M-356.68M-230.56M21.28M-116.74M
Financing Cash Flow74.47M33.72M13.41M-76.85M-27.30M52.07M

Granite Ridge Resources Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.27
Price Trends
50DMA
5.63
Positive
100DMA
5.59
Positive
200DMA
5.79
Positive
Market Momentum
MACD
0.21
Positive
RSI
58.49
Neutral
STOCH
30.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRNT, the sentiment is Positive. The current price of 6.27 is above the 20-day moving average (MA) of 6.18, above the 50-day MA of 5.63, and above the 200-day MA of 5.79, indicating a bullish trend. The MACD of 0.21 indicates Positive momentum. The RSI at 58.49 is Neutral, neither overbought nor oversold. The STOCH value of 30.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GRNT.

Granite Ridge Resources Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$596.38M5.8020.43%5.61%1.25%-5.58%
68
Neutral
$15.14B9.956.38%5.21%4.16%-67.19%
66
Neutral
$822.08M67.201.86%7.02%5.67%-79.53%
59
Neutral
$659.83M2.02-4.61%16.77%-113.49%
DKDK
51
Neutral
$1.40B-151.69%4.41%-29.23%-931.43%
NBNBR
51
Neutral
$489.20M-44.00%-0.94%-19.18%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GRNT
Granite Ridge Resources
6.27
0.22
3.64%
DK
Delek US Holdings
23.13
1.30
5.96%
VTLE
Vital Energy
17.02
-27.64
-61.89%
NBR
Nabors Industries
31.16
-38.56
-55.31%
REPX
Riley Exploration Permian
27.08
0.68
2.58%

Granite Ridge Resources Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Granite Ridge Resources Announces New CEO Appointment
Neutral
Jun 12, 2025

On June 11, 2025, Granite Ridge Resources announced the resignation of Luke Brandenberg as President and CEO, with Tyler Farquharson stepping into the role on June 12, 2025. The company also promoted Kim Weimer to Interim CFO and Chief Accounting Officer. The board is actively seeking a permanent CFO with the help of an executive search firm. This leadership transition is not related to the company’s performance, and Granite Ridge reaffirmed its 2025 operational and financial guidance. The company is confident in Farquharson’s ability to drive long-term value for shareholders, leveraging his extensive industry experience and strategic vision.

The most recent analyst rating on (GRNT) stock is a Buy with a $8.80 price target. To see the full list of analyst forecasts on Granite Ridge Resources stock, see the GRNT Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Granite Ridge Resources Elects New Directors at Annual Meeting
Neutral
May 23, 2025

On May 23, 2025, Granite Ridge Resources, Inc. held its Annual Meeting of Stockholders, where shareholders elected Griffin Perry and Amanda Coussens as Class III directors for terms expiring in 2028. Additionally, the shareholders ratified the appointment of Forvis Mazars LLP as the company’s independent registered public accounting firm for the year ending December 31, 2025.

The most recent analyst rating on (GRNT) stock is a Buy with a $8.80 price target. To see the full list of analyst forecasts on Granite Ridge Resources stock, see the GRNT Stock Forecast page.

DividendsBusiness Operations and StrategyFinancial Disclosures
Granite Ridge Resources Reports Strong Q1 2025 Results
Positive
May 8, 2025

On May 8, 2025, Granite Ridge Resources reported its first quarter 2025 financial and operational results, highlighting a 23% increase in daily production compared to the previous year. The company achieved a net income of $9.8 million and declared a quarterly cash dividend of $0.11 per share. Despite a decrease in net income from the prior year, Granite Ridge’s adjusted EBITDAX grew to $91.4 million, driven by strong well performance and strategic capital investments. The company also increased its borrowing base to $375 million, enhancing its liquidity position. Granite Ridge remains focused on disciplined capital allocation and is well-prepared to capitalize on market opportunities with a robust hedge book covering 75% of its production through 2026.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 21, 2025