Obsidian Energy (OBE) AI Stock Analysis

• Market Cap: $424.42M
• Dividend Yield: N/A
• Average Volume (3M): 468.56K
• Price to Earnings (P/E): 5.6
• Beta (1Y): 1.38
• Revenue Growth: 11.92%
• EPS Growth: -304.98%
• Country: CA
• Employees: 203
• Sector: Energy
• Sector Strength: 47
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): -2.75
• Shares Outstanding: 73,684,800
• 10 Day Avg. Volume: 562,581
• 30 Day Avg. Volume: 468,564
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: $11.34
• Price Target Upside: 96.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Obsidian Energy's overall stock score is weighed down by its financial challenges, particularly in terms of profitability and cash flow management, despite positive revenue growth and a strong balance sheet. Technical analysis further supports a cautious outlook with bearish indicators, while valuation metrics are unattractive due to negative earnings. The absence of earnings call insights and corporate events leaves these aspects out of consideration, focusing attention on the existing financial and market data.

Positive Factors

Asset Sale

A good premium was received for the Cardium asset, described as top dollar when considering abandonment liabilities.

Financial Performance

The company continued its buyback program, buying back 1.6 million shares and returning $13.2 million to shareholders.

Operational Success

Obsidian's new development drilling at Harmon Valley South achieved IP30 rates ahead of expectation at 450-500 boe/d per well, signifying potential to extend the field and add future development locations.

Negative Factors

Market Visibility

Obsidian's discounted valuation is partially explained by how far off the radar-screen it is with other energy operators.

Shareholder Returns

With a much improved balance sheet and recent strength in crude oil prices, Obsidian is expected to prioritize outsized heavy oil production growth over enhanced shareholder returns in the medium term.

Obsidian Energy Business Overview & Revenue Model

Company Description

Obsidian Energy Ltd. is a Calgary-based independent oil and gas production company focused on the exploration, development, and production of oil and natural gas in Western Canada. The company operates in the energy sector and primarily engages in extracting and selling crude oil, natural gas, and natural gas liquids. Obsidian Energy is committed to sustainable and efficient operations while maximizing shareholder value through strategic asset management and operational excellence.

How the Company Makes Money

Obsidian Energy generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids extracted from its owned and operated assets in the Western Canadian Sedimentary Basin. The company's revenue model is centered around exploration and production activities, where it identifies and develops oil and gas reserves and subsequently sells the produced hydrocarbons at market prices. Key revenue streams include the sale of these commodities directly to refineries, marketing companies, and other purchasers under various pricing arrangements. The company's earnings are influenced by factors such as global oil and gas prices, production volumes, and operational efficiencies. Obsidian Energy may also engage in strategic partnerships or joint ventures to enhance its resource development capabilities and market reach, although specific partnerships are not detailed here. The company's focus on cost management and operational optimization further contributes to its financial performance.

Obsidian Energy Financial Statement Overview

Summary

Obsidian Energy faces a challenging financial environment. While revenue growth and a solid equity base are positive aspects, profitability issues, particularly in terms of net income and free cash flow, pose significant risks. The company's ability to manage leverage remains a strength, but attention to cash flow management is critical for future stability.

Income Statement

Obsidian Energy's income statement shows mixed performance. Gross profit margin improved in 2024 to 7.43% from 62.65% in 2023, but net income declined significantly resulting in a negative net profit margin of -24.17% in 2024. Revenue growth is positive with a 28.24% increase from 2023 to 2024. However, the company experienced a decline in EBIT and net income, impacting profitability.

Balance Sheet

The balance sheet indicates a stable equity position with a debt-to-equity ratio of 0.24 in 2024, which is relatively low, suggesting prudent leverage. However, stockholders' equity decreased from 2023 to 2024. The equity ratio remains strong at 66.47%, signaling a robust capital structure, despite fluctuations in total assets.

Cash Flow

Cash flow analysis reveals challenges in free cash flow, which turned negative in 2024 due to increased capital expenditures. Operating cash flow remained stable but the free cash flow to net income ratio is unfavorable due to the negative net income. The operating cash flow to net income ratio is not meaningful due to negative net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
837.70M	653.30M	920.00M	497.50M	286.50M
	Gross Profit
62.30M	409.40M	695.70M	497.40M	-750.10M
	EBIT
0.00	374.20M	732.00M	649.90M	-766.40M
	EBITDA
430.60M	401.20M	794.30M	577.10M	-600.30M
	Net Income Common Stockholders
-202.60M	108.00M	810.10M	181.80M	-802.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	500.00K	800.00K	7.30M	8.10M
	Total Assets
2.11B	2.25B	2.20B	1.43B	964.10M
	Total Debt
342.50M	228.00M	231.30M	399.70M	462.20M
	Net Debt
342.50M	227.50M	230.50M	392.40M	454.10M
	Total Liabilities
708.80M	606.60M	624.60M	665.70M	641.00M
	Stockholders Equity
1.41B	1.64B	1.58B	763.50M	323.10M
Cash Flow		Free Cash Flow
-64.60M	59.60M	137.40M	57.70M	22.20M
	Operating Cash Flow
361.90M	352.70M	456.80M	198.70M	79.40M
	Investing Cash Flow
-430.50M	-293.60M	-290.80M	-156.60M	-66.20M
	Financing Cash Flow
67.60M	-59.40M	-172.50M	-42.90M	-8.10M

Obsidian Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:OBE, the sentiment is Negative. The current price of 5.76 is below the 20-day moving average (MA) of 6.28, below the 50-day MA of 7.24, and below the 200-day MA of 8.04, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 35.41 is Neutral, neither overbought nor oversold. The STOCH value of 7.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:OBE.

Obsidian Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TNZ	67 Neutral	C$415.54M	187.11	-8.18%	―	-3.79%	-128.77%
LGN	60 Neutral	C$387.76M	61.22	2.03%	―	―	―
Sector *	56 Neutral	$6.99B	3.76	-4.38%	5.90%	-0.24%	-48.46%
CEI	55 Neutral	C$452.37M	―	-5.23%	―	113.34%	-11.26%
FEC	53 Neutral	$384.93M	4.28	-1.37%	4.96%	-1.54%	-113.55%
SGY	52 Neutral	C$474.59M	―	-6.80%	10.58%	-2.37%	-421.59%
OBE	50 Neutral	$424.42M	5.64	-12.89%	―	11.92%	-304.98%