Headwater Exploration (HWX) AI Stock Analysis

• Market Cap: $1.67B
• Dividend Yield: 6.27%
• Average Volume (3M): 484.81K
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.16
• Revenue Growth: 20.48%
• EPS Growth: 21.66%
• Country: CA
• Employees: 38
• Sector: Energy
• Sector Strength: 45
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.21
• Shares Outstanding: 237,759,830
• 10 Day Avg. Volume: 407,393
• 30 Day Avg. Volume: 484,810
• PEG Ratio: 1.32
• Price to Book (P/B): 2.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.88
• 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: $8.61
• Price Target Upside: 24.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 81 Outperform
• Price Target: C$8.00 ▲(16.11%Upside)

Headwater Exploration's overall stock score is driven by its strong financial performance and attractive valuation. The company's robust profitability and low leverage provide a solid foundation, while positive technical indicators and corporate events further reinforce investor confidence. However, the lack of recent earnings call data limits a comprehensive assessment of management's forward-looking guidance.

Positive Factors

Exploration potential

With emerging new exploration plays outside the Clearwater, there’s lots to like about Headwater's future prospects.

Financial performance

For every dollar spent, there was $1.87 in value created.

Production and reserves

Headwater highlighted record production, one of the best reserve reports from a profitability standpoint, and encouraging results at Marten Hills West and Nipisi.

Negative Factors

Headwater Exploration Business Overview & Revenue Model

Company Description

Headwater Exploration Inc. is a Canadian resource company engaged in the exploration, development, and production of oil and natural gas. Operating primarily within the energy sector, the company is focused on leveraging its expertise to efficiently and sustainably extract hydrocarbons while maximizing shareholder value. Headwater Exploration's core products include crude oil and natural gas, which are extracted from its strategically located assets in Canada.

How the Company Makes Money

Headwater Exploration Inc. generates revenue primarily through the sale of crude oil and natural gas. The company extracts these resources from its Canadian operational sites and sells them to various buyers, including refineries and energy distributors. Revenue is affected by factors such as production volumes, commodity prices, and operational efficiency. Partnerships with other energy companies and investments in technology to improve extraction and operational processes also contribute to its earnings. Additionally, Headwater Exploration may enter into hedging contracts to manage price volatility, which can impact its financial performance.

Headwater Exploration Financial Statement Overview

Summary

Headwater Exploration shows strong financial performance with robust profitability, efficient operations, and a stable balance sheet. Notably, it maintains a high Gross Profit Margin of 54.06% and a Net Profit Margin of 32.00%. The company's low Debt-to-Equity Ratio of 0.004 and strong Free Cash Flow metrics further underline its financial resilience.

Income Statement

Headwater Exploration demonstrates strong financial performance in the TTM period with a robust Gross Profit Margin of 54.06% and a Net Profit Margin of 32.00%. The company has shown consistent revenue growth, particularly from 2023 to 2024 at 45.64% and a moderate increase in the latest period. The EBIT and EBITDA margins are healthy at 32.39% and 62.47% respectively, indicating efficient operations and earnings quality.

Balance Sheet

The company maintains a strong balance sheet with a low Debt-to-Equity Ratio of 0.004 and a Return on Equity of 27.70%, reflecting efficient use of equity to generate profits. The Equity Ratio stands at 74.80%, showcasing financial stability and low leverage risk. The consistent increase in stockholders' equity also signals strong financial health.

Cash Flow

Headwater has a healthy cash flow with a Free Cash Flow Growth Rate of 18.47% from 2024 to the TTM period. Operating Cash Flow to Net Income Ratio is robust at 1.65, indicating strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio of 0.55 also supports the company's ability to generate cash efficiently.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	619.80M	425.55M	458.38M	190.94M	9.50M
Gross Profit	332.06M	193.33M	266.00M	108.10M	49.00K
EBITDA	372.81M	324.89M	291.97M	95.66M	5.49M
Net Income	188.03M	156.07M	162.11M	45.83M	6.71M
Balance Sheet
Total Assets	952.64M	836.34M	734.74M	488.81M	300.69M
Cash, Cash Equivalents and Short-Term Investments	142.69M	146.05M	175.45M	114.70M	76.77M
Total Debt	2.72M	842.00K	861.00K	1.55M	436.00K
Total Liabilities	253.18M	225.84M	191.41M	91.02M	31.66M
Stockholders Equity	699.46M	610.50M	543.34M	397.79M	269.03M
Cash Flow
Free Cash Flow	93.87M	63.25M	35.00M	-28.73M	-34.83M
Operating Cash Flow	316.74M	303.32M	283.93M	111.66M	230.00K
Investing Cash Flow	-226.85M	-243.71M	-232.06M	-109.13M	-34.40M
Financing Cash Flow	-93.24M	-89.00M	8.88M	35.40M	49.99M

Headwater Exploration Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HWX, the sentiment is Positive. The current price of 6.89 is above the 20-day moving average (MA) of 6.86, above the 50-day MA of 6.50, and above the 200-day MA of 6.34, indicating a bullish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 59.37 is Neutral, neither overbought nor oversold. The STOCH value of 63.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HWX.

Headwater Exploration Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HWX	81 Outperform	$1.67B	8.32	29.87%	6.27%	20.48%	21.66%
PXT	75 Outperform	$1.41B	12.66	4.22%	10.78%	-9.92%	-78.49%
KEL	71 Outperform	$1.53B	28.62	4.98%	―	0.73%	-36.49%
BIR	63 Neutral	$1.91B	13.85	6.10%	1.71%	-18.20%	260.40%
VET	60 Neutral	$1.66B	―	-1.19%	4.83%	1.04%	94.48%
Sector *	52 Neutral	C$2.95B	-1.04	-3.46%	5.86%	3.01%	-47.13%
MER	45 Neutral	$1.11B	―	-25.82%	8.46%	―	-438.52%

Headwater Exploration Corporate Events

Headwater Exploration Inc. Announces Successful Shareholder Meeting Outcomes

Headwater Exploration Inc. announced the successful election of its board of directors during the annual and special shareholder meeting held on May 8, 2025. All proposed nominees were elected, and key resolutions, including the appointment of KPMG LLP as auditors and the approval of executive compensation and unallocated awards under the performance and restricted award plan, were passed with significant shareholder support.