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Sitio Royalties (STR)
NYSE:STR
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Sitio Royalties
(NYSE:STR)
59Neutral
Sitio Royalties (STR) vs. S&P 500 (SPY)
Market Cap
$2.47B
Dividend Yield8.58%
Average Volume (3M)806.29K
Price to Earnings (P/E)33.2
Beta (1Y)1.17
Revenue Growth5.23%
EPS GrowthN/A
CountryUS
Employees72
SectorEnergy
Sector Strength59
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.49
Shares Outstanding78,113,660
10 Day Avg. Volume699,522
30 Day Avg. Volume806,293
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.92
Price to Cash Flow (P/CF)7.30
P/FCF Ratio7.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$26.83Price Target Upside64.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Sitio Royalties Business Overview & Revenue Model
Company DescriptionSitio Royalties Corp. operates as oil and gas mineral and royalty company. The company acquires oil-weighted rights in productive and the United States basins. It has approximately 140,000 net royalty acres through the consummation of over 180 acquisitions. The company was founded in 2016 and is headquartered in Denver, Colorado.
How the Company Makes MoneySitio Royalties makes money by acquiring oil and gas mineral rights and royalty interests in productive onshore basins. These acquisitions allow the company to earn revenue in the form of royalties from oil and gas production, which are paid by the operators of the wells on their properties. The royalties are typically calculated as a percentage of the production revenue generated by these wells. Sitio Royalties' revenue model is primarily driven by the volume of oil and gas produced and the prevailing market prices for these commodities. The company strategically grows its portfolio through acquisitions and partnerships, focusing on assets with high potential for long-term revenue generation.
Sitio Royalties Financial Statement Overview
Summary
Sitio Royalties shows strong revenue growth and improved profitability, which are positive signs for its income statement. However, the high leverage and negative equity present significant balance sheet risks. While the positive trend in free cash flow is encouraging, the company's reliance on operating cash flows suggests a need for caution. Overall, the company's financial health is improving but remains susceptible to financial risks.Income Statement
Sitio Royalties has displayed robust revenue growth, with total revenue increasing significantly from $456.99 million in 2020 to $624.41 million in 2024. The net profit margin improved notably, moving from a net loss in 2020 to a net income of $130.80 million in 2024. The EBIT and EBITDA margins have also increased, indicating enhanced operational efficiency. However, fluctuations in net income in previous years indicate some volatility.75
Positive
Balance Sheet
The company's balance sheet shows high leverage, with a substantial debt-to-equity ratio due to negative stockholders' equity in 2024. This poses significant financial risk. The equity ratio has deteriorated, reflecting reduced financial stability. On a positive note, the company has increased its total assets over time but must manage its liabilities better to improve financial health.40
Negative
Cash Flow
The cash flow statements reveal positive free cash flow, which is a strong indicator of liquidity. Free cash flow grew from negative in 2020 to $462.43 million in 2024. However, the operating cash flow to net income ratio indicates heavy reliance on operating cash flows to sustain profitability, highlighting potential risk if operational performance declines.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 624.41M | 593.36M | 369.61M | 120.59M | 45.70M | Gross Profit |
| 624.41M | 423.27M | 265.10M | 79.68M | 13.65M | EBIT |
| 203.01M | 35.39M | 193.99M | 49.87M | -3.22M | EBITDA |
| 518.40M | 323.75M | 354.24M | 90.78M | 7.98M | Net Income Common Stockholders |
| 40.95M | -15.54M | 184.18M | 47.49M | -14.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.29M | 15.20M | 18.82M | 12.38M | 2.72M | Total Assets |
| 4.74B | 4.76B | 5.17B | 1.20B | 275.73M | Total Debt |
| 1.09B | 872.46M | 945.76M | 134.00M | 39.80M | Net Debt |
| 1.08B | 857.26M | 926.94M | 121.62M | 37.08M | Total Liabilities |
| 1.39B | 1.16B | 1.28B | 139.71M | 47.33M | Stockholders Equity |
| -1.32B | 1.61B | 1.72B | 560.62M | 139.76M |
| Cash Flow | Free Cash Flow | |||
| 462.43M | 316.95M | -393.45M | 27.19M | -9.82M | Operating Cash Flow |
| 462.43M | 487.50M | 164.96M | 65.93M | 26.02M | Investing Cash Flow |
| -329.96M | -59.73M | -558.10M | -38.74M | -21.56M | Financing Cash Flow |
| -144.37M | -431.40M | 399.20M | -22.34M | -15.06M |
Sitio Royalties Technical Analysis
Negative
16.32
Price Trends
19.60
Negative
20.46
Negative
21.12
Negative
Market Momentum
0.20
Negative
52.05
Neutral
20.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STR, the sentiment is Negative. The current price of 16.32 is below the 20-day moving average (MA) of 19.69, below the 50-day MA of 19.60, and below the 200-day MA of 21.12, indicating a bearish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 52.05 is Neutral, neither overbought nor oversold. The STOCH value of 20.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STR.
Sitio Royalties Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.25B | 9.86 | 26.55% | 6.62% | 19.03% | 36.16% | |
76 Outperform | $24.80B | 54.71 | 41.73% | 0.51% | 11.75% | 12.18% | |
73 Outperform | $2.95B | 12.18 | 23.12% | 10.74% | -12.71% | -39.85% | |
64 Neutral | $2.45B | 45.09 | 1.48% | 13.91% | 13.72% | -110.82% | |
62 Neutral | $1.33B | 13.19 | 32.48% | 11.44% | -1.39% | -23.38% | |
59 Neutral | $2.47B | 33.17 | 2.66% | 8.58% | 5.23% | ― | |
57 Neutral | $7.70B | 4.18 | -3.52% | 8.32% | 0.35% | -64.68% |
* Energy Sector Average
Performance Comparison
STR
Sitio Royalties
16.32
-7.61
-31.80%
DMLP
Dorchester Minerals
28.13
-2.97
-9.55%
TPL
Texas Pacific Land
1,079.00
510.83
89.91%
VNOM
Viper Energy
37.64
0.31
0.83%
BSM
Black Stone Minerals
13.97
-0.99
-6.62%
KRP
Kimbell Royalty Partners
12.36
-2.11
-14.58%
Sitio Royalties Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -14.33% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Sitio Royalties' strong production growth, successful acquisitions, and significant capital returns to shareholders, supported by a robust financial position and technological advancements. However, increased cash G&A expenses and a slight decrease in the oil percentage of production were noted as challenges.Highlights
Record-Breaking Production
Sitio Royalties achieved a record fourth quarter production of about 41,000 barrels of oil equivalent per day, marking a 14% year-over-year increase.
Accretive Acquisitions
Closed 16 high-value acquisitions throughout the year, totaling more than $350 million, with fourth quarter deals adding 3,300 net royalty acres primarily in the Delaware Basin.
Financial Flexibility and Strong Balance Sheet
Borrowing base increased to $925 million and annual interest expense per BOE decreased by over 17% year-over-year.
Significant Return to Shareholders
Returned $330 million to shareholders in 2024, with expectations to exceed $1 billion in 2025.
Efficiency Gains through Technology
Refined asset management applications and AI models, capturing $19 million of missing revenue payments and significantly reducing data processing workload.
Lowlights
Increased Cash G&A
Cash G&A increased by approximately 25% year-over-year, attributed to investments in people and systems.
Lower Oil Skew
Oil percentage of production decreased slightly, influenced by acquisitions and maturation of the Midland Basin.
Company Guidance
During the Sitio Royalties Fourth Quarter 2024 Earnings Call, the company provided guidance on several key metrics for 2025. Production guidance for 2025 is set at 18,500 barrels of oil per day and just under 40,000 barrels of oil equivalent per day (BOE/d), representing a 3% increase over the full year 2024 production. The company expects continued acquisition activity, with a strong pipeline leading to $350 million in acquisitions during 2024, including $140 million in the fourth quarter. Sitio also reported a robust return of capital to shareholders, with $330 million returned in 2024, equating to over 70% of discretionary cash flow. This builds on a cumulative return of nearly $850 million since going public in mid-2022, with expectations to exceed $1 billion in 2025. Additionally, Sitio highlighted significant operational efficiencies, including the use of AI models to recover $19 million in missing revenue payments, offsetting over two-thirds of cash G&A expenses. The company also emphasized its strong balance sheet with a borrowing base increase to $925 million and a 17% year-over-year reduction in interest expense per BOE.Sitio Royalties Corporate Events
Executive/Board Changes
Sitio Royalties Announces Departure of Chief Accounting Officer
Neutral
Feb 28, 2025
On February 27, 2025, Sitio Royalties Corp. announced the departure of Dawn Smajstrla as Chief Accounting Officer, which was not due to any disagreements with the company. The responsibilities have been temporarily assumed by Carrie Osicka, the Chief Financial Officer, without any change in her compensation. The company plans to enter into a separation agreement with Ms. Smajstrla, providing her with benefits under their Severance Plan, contingent upon her signing a general release of claims.
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.