Arrow Exploration Corp (AXL) AI Stock Analysis

• Market Cap: C$100.05M
• Dividend Yield: N/A
• Average Volume (3M): 205.91K
• Price to Earnings (P/E): 10.3
• Beta (1Y): -0.19
• Revenue Growth: 22.88%
• EPS Growth: 2321.43%
• Country: CA
• Employees: 35
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.01
• Shares Outstanding: 285,864,350
• 10 Day Avg. Volume: 204,526
• 30 Day Avg. Volume: 205,915
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.70
• Price to Sales (P/S): 1.11
• P/FCF Ratio: 10.76
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$0.37
• Price Target Upside: 5.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: C$0.39 ▲(11.43% Upside)

The score is driven primarily by solid financial quality (strong margins and extremely low leverage) but is held back by steep TTM revenue contraction and negative free cash flow. Technicals are supportive with price above major moving averages and a positive MACD, while valuation appears reasonable on a sub-10 P/E.

Positive Factors

High Gross & EBITDA Margins

Persistently high gross and strong EBIT/EBITDA margins indicate structural cost efficiency in production and operations. This margin cushion supports weathering commodity volatility, funds reinvestment in exploration, and underpins long-term profitability and capital allocation discipline.

Extremely Low Leverage

Near-zero debt provides durable financial flexibility for a cyclical E&P business: lower bankruptcy risk, greater capacity to fund exploration or acquisitions with equity or cash, and resilience during commodity downturns without material interest burden.

Operating Cash Generation

Operating cash flow coverage near 2x shows the core asset base generates cash relative to reported earnings. Reliable operational cash generation supports ongoing operations, NRI-backed reinvestment and service of obligations, bolstering medium-term operational continuity.

Negative Factors

Steep Revenue Contraction

A roughly 38% TTM revenue decline erodes scale and market traction, pressures fixed-cost absorption, and weakens negotiating leverage with partners and buyers. Sustained revenue shrinkage impairs reinvestment capacity and threatens long-term production growth plans.

Negative Free Cash Flow

Negative free cash flow limits the firm's ability to self-fund exploration, development, and shareholder returns. Over months this raises reliance on external financing or equity issuance, increasing dilution risk and constraining strategic investments in a capital-intensive sector.

Declining Net Margin / ROE

Falling net margins and a declining ROE signal deteriorating return on capital and profitability pressure. If persistent, this reduces retained earnings for reinvestment, weakens returns to shareholders, and may indicate rising costs or lower realized prices per barrel.

Arrow Exploration Corp Business Overview & Revenue Model

Company Description

Arrow Exploration Corp., a junior oil and gas company, engages in the acquisition, exploration, development, and production of oil and gas properties in Colombia and Western Canada. As of December 31, 2021, it holds interests in six oil blocks in Colombia that covers an area of approximately 227,005 net acres; and oil and natural gas leases in seven areas in Canada covering an area of approximately 254,003 net acres. Arrow Exploration Corp. is headquartered in Calgary, Canada.

How the Company Makes Money

Arrow Exploration Corp generates revenue primarily through the sale of crude oil and natural gas. The company's revenue model is built on the exploration of oil and gas reserves, production of hydrocarbons, and subsequent sales in the energy markets. Key revenue streams include the sale of produced oil and natural gas, which is influenced by global commodity prices. Additionally, the company may benefit from strategic partnerships that enhance its operational capabilities and market reach. Factors contributing to its earnings include production volume, operational efficiencies, and the ability to navigate regulatory environments effectively.

Arrow Exploration Corp Financial Statement Overview

Summary

Strong profitability metrics and operational efficiency (gross margins consistently above 68% and robust EBIT/EBITDA margins) plus a very low leverage balance sheet. Offsetting this are a sharp revenue decline (TTM revenue growth -38.4%) and negative free cash flow, which raise durability and reinvestment/liquidity concerns.

Income Statement

Arrow Exploration Corp has shown strong gross profit margins consistently above 68%, indicating efficient cost management. However, the net profit margin has decreased to 12.28% in the TTM, down from 16.15% in 2024, reflecting a decline in profitability. The revenue growth rate is negative at -38.4% in the TTM, suggesting a significant drop in sales, which is a concern. Despite this, the EBIT and EBITDA margins remain robust, showcasing operational efficiency.

Balance Sheet

The company maintains a very low debt-to-equity ratio of 0.0039 in the TTM, indicating minimal leverage and financial risk. The return on equity has decreased to 19.36% from 24.85% in 2024, yet it remains strong, reflecting effective use of equity. The equity ratio is stable, showing a solid capital structure with a high proportion of equity financing.

Cash Flow

Operating cash flow remains strong with a coverage ratio of 1.91 in the TTM, indicating good cash generation relative to net income. However, free cash flow is negative, which is concerning as it suggests potential liquidity issues. The free cash flow growth rate is positive, but the negative free cash flow to net income ratio highlights challenges in converting earnings into free cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	85.02M	81.56M	50.60M	28.14M	7.17M	5.59M
Gross Profit	55.33M	56.19M	32.48M	19.45M	4.89M	3.27M
EBITDA	42.71M	46.82M	15.36M	14.43M	6.80M	-31.70M
Net Income	6.90M	13.18M	-1.11M	346.52K	5.69M	-32.23M
Balance Sheet
Total Assets	93.68M	81.27M	62.28M	53.19M	41.20M	33.53M
Cash, Cash Equivalents and Short-Term Investments	6.37M	18.84M	12.33M	13.06M	10.88M	11.47M
Total Debt	194.32K	219.41K	320.59K	1.96M	3.41M	5.87M
Total Liabilities	35.80M	28.25M	20.77M	27.29M	17.24M	20.74M
Stockholders Equity	57.88M	53.02M	41.51M	25.90M	23.96M	12.79M
Cash Flow
Free Cash Flow	-8.99M	8.40M	-10.61M	4.37M	-6.22M	-3.19M
Operating Cash Flow	35.37M	39.52M	16.48M	12.04M	-4.51M	-2.30M
Investing Cash Flow	-45.47M	-32.65M	-22.58M	-8.38M	-4.05M	12.78M
Financing Cash Flow	-62.21K	-57.81K	5.39M	-1.44M	8.10M	-29.05K

Arrow Exploration Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AXL, the sentiment is Positive. The current price of 0.35 is above the 20-day moving average (MA) of 0.28, above the 50-day MA of 0.25, and above the 200-day MA of 0.27, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 71.60 is Negative, neither overbought nor oversold. The STOCH value of 88.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AXL.

Arrow Exploration Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AXL	73 Outperform	C$100.05M	10.32	12.74%	―	22.88%	2321.43%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
NSE	49 Neutral	C$64.43M	-4.63	-467.35%	―	―	-63.05%
TXP	46 Neutral	C$58.45M	-10.11	-4.64%	―	-23.68%	75.45%
AFE	45 Neutral	C$57.50M	-10.71	-6.81%	―	―	98.92%
OYL	42 Neutral	C$57.55M	-0.71	-188.43%	―	―	-1886.78%