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Permian Resources (PR)
NYSE:PR

Permian Resources (PR) AI Stock Analysis

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PR

Permian Resources

(NYSE:PR)

77Outperform
Permian Resources exhibits a solid financial and operational performance with strong revenue growth and profitability. The company's low leverage further strengthens its financial stability. However, technical indicators suggest caution in the short term due to a downward trend. The stock's valuation appears attractive with a low P/E ratio and decent dividend yield. Earnings call and corporate event data highlight positive strategic plans and operational efficiency improvements, although challenges in cash flow management and future tax obligations remain.
Positive Factors
Cost Management
Permian Resources Corporation stands out among its peers for its ability to maintain flat or slightly lower operating cash costs, highlighting a competitive edge in cost management.
Oil Production
Permian Resources reported strong 4Q24 results with oil production exceeding estimates while keeping capex and operating costs in check.
Valuation and Returns
The analyst maintains a Buy rating on the attractive overall valuation and base-dividend anchored capital returns that secure competitive and predictable shareholder returns.
Negative Factors
Capital Expenditure
Permian Resources Corporation would likely need to cut capital expenditures if oil prices fall below $60/bbl WTI, which could impact future growth prospects.
Oil Price Sensitivity
In a sub $60/bbl WTI environment without service cost deflation, Permian Resources Corporation would likely reduce capital expenditures, indicating vulnerability to low oil prices.

Permian Resources (PR) vs. S&P 500 (SPY)

Permian Resources Business Overview & Revenue Model

Company DescriptionPermian Resources (PR) is an oil and gas company primarily engaged in the exploration, development, and production of oil and natural gas resources. The company operates in the energy sector, focusing on the prolific Permian Basin in the United States. Its core activities include the acquisition and development of oil and natural gas properties, leveraging advanced technologies to optimize extraction and maximize output.
How the Company Makes MoneyPermian Resources generates revenue through the sale of crude oil, natural gas, and natural gas liquids produced from its operations. The company derives its earnings by exploring and developing hydrocarbon reserves and selling the extracted resources to refineries, utilities, and other energy companies. Key revenue streams include the sale of oil and gas produced from its operated wells, as well as through joint ventures and partnerships with other energy firms. Factors contributing to its earnings include fluctuations in commodity prices, production levels, and operational efficiencies. Additionally, strategic acquisitions and efficient resource management play a significant role in sustaining and enhancing its profitability.

Permian Resources Financial Statement Overview

Summary
Permian Resources shows strong revenue growth and profitability with notable increases in net income. The balance sheet is stable with low leverage, although the increase in total debt and negative free cash flow due to high capital expenditures are concerns.
Income Statement
88
Very Positive
Permian Resources shows strong revenue growth with a notable increase from $3.12 billion in 2023 to $3.70 billion in TTM (Trailing-Twelve-Months) 2024, reflecting a revenue growth rate of 18.68%. The company maintains solid profitability metrics with a Gross Profit Margin of 42.46% and a Net Profit Margin of 26.58% for TTM 2024. EBIT and EBITDA margins are also robust at 47.74% and 89.27% respectively, indicating efficient operations. The significant improvement in net income from 2023 to TTM 2024 highlights strong financial performance. However, the decrease in gross profit suggests some cost management challenges.
Balance Sheet
75
Positive
The company's balance sheet is stable with a healthy Equity Ratio of 54.08% in TTM 2024, suggesting a strong equity position. The Debt-to-Equity Ratio is low at 0.01, which indicates minimal leverage and reduced financial risk. Return on Equity is impressive at 10.78%, showcasing effective capital utilization. However, the large increase in total debt from previous years requires monitoring to ensure it remains manageable.
Cash Flow
70
Positive
Permian Resources displays strong Operating Cash Flow at $2.54 billion in TTM 2024, providing a solid basis for operations with an Operating Cash Flow to Net Income Ratio of 2.58. However, the Free Cash Flow is negative at -$39 million, reflecting high capital expenditures. The Free Cash Flow to Net Income Ratio is negative, indicating that the current capital spending exceeds operating cash generation, which could affect future liquidity if not addressed.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
5.00B3.12B2.13B1.03B580.46M
Gross Profit
2.36B1.65B1.42B548.46M41.31M
EBIT
1.74B1.10B1.01B370.62M-89.25M
EBITDA
3.62B2.22B1.41B489.15M-335.96M
Net Income Common Stockholders
984.70M476.31M749.84M138.18M-685.20M
Balance SheetCash, Cash Equivalents and Short-Term Investments
479.34M73.29M59.55M9.38M5.80M
Total Assets
16.90B14.97B8.49B3.80B3.83B
Total Debt
121.50M3.91B2.21B842.98M1.07B
Net Debt
-357.84M3.84B2.15B833.60M1.07B
Total Liabilities
6.38B5.74B2.84B1.05B1.22B
Stockholders Equity
9.14B6.34B2.94B2.75B2.60B
Cash FlowFree Cash Flow
291.33M419.83M587.67M198.57M-156.64M
Operating Cash Flow
3.41B2.21B1.37B525.62M171.38M
Investing Cash Flow
-3.10B-1.58B-1.21B-226.48M-326.32M
Financing Cash Flow
97.71M-631.19M-106.63M-297.55M147.74M

Permian Resources Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price12.26
Price Trends
50DMA
12.90
Negative
100DMA
13.77
Negative
200DMA
13.97
Negative
Market Momentum
MACD
-0.33
Negative
RSI
50.18
Neutral
STOCH
89.81
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PR, the sentiment is Neutral. The current price of 12.26 is above the 20-day moving average (MA) of 11.94, below the 50-day MA of 12.90, and below the 200-day MA of 13.97, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 50.18 is Neutral, neither overbought nor oversold. The STOCH value of 89.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PR.

Permian 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
78
Outperform
$8.85B15.5451.23%6.97%10.89%19.50%
PRPR
77
Outperform
$9.92B8.4812.79%3.42%60.23%19.57%
APAPA
68
Neutral
$5.48B6.6020.26%6.12%17.61%-75.78%
ARAR
68
Neutral
$10.30B183.380.82%-4.22%-77.20%
RRRRC
66
Neutral
$8.02B30.586.96%0.95%11.88%-43.44%
OVOVV
62
Neutral
$9.03B8.2410.87%3.46%-15.82%-46.85%
55
Neutral
$7.10B3.56-6.61%5.99%-0.03%-51.61%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PR
Permian Resources
12.26
-4.48
-26.76%
APA
APA
16.35
-14.94
-47.75%
OVV
Ovintiv
34.67
-17.30
-33.29%
RRC
Range Resources
34.79
-2.22
-6.00%
AR
Antero Resources
35.33
1.03
3.00%
HESM
Hess Midstream Partners
38.78
6.39
19.73%

Permian Resources Earnings Call Summary

Earnings Call Date:Feb 25, 2025
(Q4-2024)
|
% Change Since: -9.32%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance by Permian Resources in 2024, marked by record production and free cash flow, significant cost reductions, and effective M&A activity. The company has laid out a promising growth plan for 2025, with increased production and improved capital efficiency. However, there are challenges related to future cash tax obligations and gas realizations, which the company aims to address in the coming years.
Q4-2024 Updates
Positive Updates
Record Production and Free Cash Flow in Q4 2024
Permian Resources reported record production and free cash flow per share in Q4 2024, with oil production of 171,000 barrels per day and total production of 368,000 barrels of oil equivalent per day. Adjusted free cash flow for the quarter was $400 million.
Significant Cost Reductions Achieved
The company reported a nearly 50% increase in performance compared to 2023 without increasing leverage. Well costs were almost 20% lower than 2023, with over half of this reduction attributed to structural efficiency improvements.
Strong 2024 M&A Performance
Permian Resources executed approximately $1.2 billion of acquisitions for 50,000 net acres, replacing inventory drilled in 2024 with high rate of return inventory.
2025 Growth Plan
The company expects to deliver 8% higher annual oil production in 2025 compared to 2024, with a capital program of approximately $2 billion, showing improved capital efficiency year over year.
Increased Liquidity and Strong Financial Position
Permian Resources increased liquidity by approximately $1 billion in 2024, maintaining a strong financial position with no change in leverage while executing $1.2 billion of accretive M&A.
Negative Updates
Minimal Cash Taxes in 2025
The company expects minimal cash taxes in 2025, but anticipates more meaningful cash taxes in 2026, and closer to being a full cash taxpayer by 2027.
Gas Realization Challenges
Permian Resources is focusing on optimizing gas netbacks, but significant improvements are not expected until 2026 and beyond, with the current strategy largely unchanged from 2024.
Company Guidance
During the recent Permian Resources Corporation conference call, the company discussed its strong financial and operational performance for the fourth quarter and full year 2024, along with its guidance for 2025. For Q4 2024, Permian Resources reported oil production of 171,000 barrels per day and total production of 368,000 barrels of oil equivalent per day, exceeding expectations. The company maintained CapEx within its guidance range of $1.9 to $2.1 billion and achieved lower costs with Q4 LOE at $5.42 per BOE, cash G&A at $0.93 per BOE, and GPT at $1.49 per BOE. This resulted in an adjusted operating cash flow of $904 million and adjusted free cash flow of $400 million for the quarter. Looking ahead to 2025, Permian Resources plans to maintain production between 300,000 and 380,000 BOE per day, with oil production averaging 170,000 to 175,000 barrels per day. The capital program is set at approximately $2 billion, a reduction from 2024, with 80% allocated to drilling and completion operations. The company expects an 8% increase in annual oil production compared to 2024, supported by continued cost efficiencies and strategic M&A activities.

Permian Resources Corporate Events

Business Operations and StrategyFinancial Disclosures
Permian Resources Reports Strong 2024 Results and 2025 Plan
Positive
Feb 25, 2025

Permian Resources announced strong financial and operational results for the fourth quarter and full year 2024, with significant increases in crude oil and total average production, and a robust balance sheet. The company also unveiled its 2025 operational plan, which aims to enhance capital efficiency and increase production by 8% while maintaining a similar capital budget, thereby maximizing shareholder value.

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.