Meren Energy (MER) AI Stock Analysis

• Market Cap: C$1.45B
• Dividend Yield: 0%
• Average Volume (3M): 791.94K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.96
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: CA
• Employees: 25
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.01
• Shares Outstanding: 675,909,200
• 10 Day Avg. Volume: 545,008
• 30 Day Avg. Volume: 791,938
• PEG Ratio: 5.71
• Price to Book (P/B): 1.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -15.57
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: C$2.50 ▲(48.81% Upside)

The score is driven mainly by improved TTM fundamentals (strong revenue ramp, healthy margins, and positive free cash flow), tempered by historical volatility, a recent increase in leverage, and mixed cash-flow quality. Technicals are mildly supportive rather than strongly bullish, while valuation looks attractive on P/E but offers no dividend support; the OTCQX listing change is a modest positive.

Positive Factors

Revenue Growth

A 148.7% TTM revenue increase represents a material step-change in scale and market traction. A larger revenue base can enhance operating leverage, enable sustained reinvestment in production and infrastructure, and make earnings more durable if volumes and realizations hold.

Margin Strength

Gross margin near 31.5% and net margin ~18% indicate strong unit economics and/or low-cost operations. Healthy margins provide a durable buffer versus commodity swings, support internal financing of growth, and increase the likelihood that profits convert into sustainable cash flow over time.

Cash Generation

Material TTM operating cash flow and positive FCF show the business is generating real cash, not just accounting earnings. Reliable cash generation supports capex, debt service and strategic investments without immediate external financing, improving long-term financial flexibility.

Negative Factors

Historical Volatility

A history of uneven results and prior years with negative earnings or zero revenue reduces confidence that current scale is sustainable. This increases model risk, complicates capital allocation decisions, and means future performance could revert rapidly if favorable conditions dissipate.

Rising Leverage

Debt-to-equity near 0.34 reflects a notable recent buildup from near-zero levels. Although leverage is moderate now, the rapid increase raises refinancing and covenant risk if cash flows decline, reducing financial flexibility and increasing fixed obligations over the medium term.

Cash Conversion Quality

Operating cash flow at ~0.53x of net income and sharply negative FCF growth point to weak earnings-to-cash conversion and volatility from working capital or non-cash items. This undermines the sustainability of reported profits and could constrain funding for capex or debt repayment.

Meren Energy Business Overview & Revenue Model

Company Description

Africa Oil Corp (AOI) is an independent oil and gas company that focuses on exploration and production activities primarily in Africa. The company is engaged in the acquisition, exploration, development, and production of oil and gas properties. Its core operations are centered in Kenya and Nigeria, and it holds interests in various exploration blocks across the African continent.

How the Company Makes Money

Africa Oil Corp generates revenue primarily through the exploration, development, and production of oil and gas reserves. The company's key revenue streams include the sale of crude oil and natural gas produced from its operational fields. A significant portion of its income is derived from its working interests in oil-producing assets in Nigeria, which provide consistent cash flow through the sale of crude oil. Additionally, the company benefits from strategic partnerships and joint ventures with other exploration and production companies, allowing it to share risks and costs associated with large-scale projects. These collaborations also enhance its access to new technologies and resources, contributing to its overall earnings.

Meren Energy Financial Statement Overview

Summary

Strong TTM step-change with revenue growth of +148.7%, solid margins (~31.5% gross; ~18.0% net), and positive free cash flow (121.6M). Offsets include historically uneven results, a notable recent debt build (raising risk if conditions soften), and mixed cash conversion (operating cash flow ~0.53x net income) with sharply negative free cash flow growth.

Income Statement

TTM (Trailing-Twelve-Months) shows a clear step-change in scale with revenue of 362.4M and very strong profitability (gross margin ~31.5% and net margin ~18.0%), supported by high reported operating earnings. Revenue growth is exceptionally strong (+148.7%), signaling momentum. Offsetting this, prior annual periods show highly uneven results (including years with negative earnings and zero reported revenue), which raises questions around sustainability and comparability of the run-rate.

Balance Sheet

Leverage looks manageable in TTM (Trailing-Twelve-Months) with debt-to-equity at ~0.34 and equity of 881.3M against 2.13B in assets, suggesting a reasonable capital cushion. Returns improved to ~8.0% on equity in TTM (Trailing-Twelve-Months). The main weakness is the sharp increase in debt versus recent annual periods (near-zero/very low debt previously), which increases financial risk if the recent earnings/cash flow trajectory cools.

Cash Flow

TTM (Trailing-Twelve-Months) cash generation is positive and meaningful (operating cash flow 177.4M; free cash flow 121.6M), and free cash flow covers a solid portion of net income (~68.5%), indicating profits are converting into cash. However, cash flow quality is mixed: operating cash flow is only about half of net income (~0.53x), and free cash flow growth is sharply negative, pointing to volatility and/or a tougher reinvestment/working-capital swing versus the prior period.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	362.40M	0.00	0.00	0.00	0.00	0.00
Gross Profit	114.20M	0.00	0.00	0.00	0.00	0.00
EBITDA	290.15M	29.80K	-31.90M	-27.00M	197.60M	-228.44M
Net Income	65.40M	-279.00K	87.10K	-60.30M	190.70M	-17.61M
Balance Sheet
Total Assets	2.13B	615.20M	966.20M	917.70M	991.62M	910.50M
Cash, Cash Equivalents and Short-Term Investments	176.70M	61.40M	232.00M	199.30M	58.51M	38.74M
Total Debt	300.70M	3.30M	0.00	0.00	0.00	141.69M
Total Liabilities	1.25B	66.40M	71.60M	87.10M	43.56M	156.21M
Stockholders Equity	881.30M	548.80M	894.60M	830.60M	948.06M	754.29M
Cash Flow
Free Cash Flow	121.60M	-40.90M	-53.30M	-16.30M	-14.79M	-5.43M
Operating Cash Flow	177.40M	-40.90M	-53.30M	-16.30M	-10.21M	-5.35M
Investing Cash Flow	372.70M	-61.30M	114.70M	220.20M	187.70M	-394.27M
Financing Cash Flow	-508.50M	-68.40M	-29.10M	-63.20M	-159.12M	110.64M

Meren Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MER, the sentiment is Positive. The current price of 1.68 is below the 20-day moving average (MA) of 1.98, below the 50-day MA of 1.86, and below the 200-day MA of 1.73, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 75.08 is Negative, neither overbought nor oversold. The STOCH value of 77.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MER.

Meren Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PXT	76 Outperform	C$1.93B	12.35	5.77%	8.48%	-20.07%	-53.33%
CJ	72 Outperform	C$1.41B	18.26	8.46%	8.25%	-9.30%	-26.09%
MER	68 Neutral	C$1.45B	11.12	9.15%	0.00%	―	―
SDE	67 Neutral	$1.79B	47.29	7.22%	―	17.31%	-75.56%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
KEL	61 Neutral	C$1.51B	26.51	5.22%	―	9.92%	2.74%

Meren Energy Corporate Events

Meren Energy Begins Trading on OTCQX Best Market

Meren Energy Inc. has announced that its common shares have begun trading on the OTCQX Best Market in the United States under the ticker symbol ‘MRNFF’. This move aims to enhance transparency and accessibility for U.S. investors, as the company continues to trade on the Toronto Stock Exchange and Nasdaq Stockholm under the symbol ‘MER’. The upgrade to the OTCQX Market reflects Meren’s commitment to high financial standards and corporate governance, potentially strengthening its market position and investor relations.

The most recent analyst rating on (TSE:MER) stock is a Buy with a C$2.50 price target. To see the full list of analyst forecasts on Africa Oil stock, see the TSE:MER Stock Forecast page.