Topaz Energy Corp (TPZ) AI Stock Analysis

• Market Cap: C$4.83B
• Dividend Yield: 4.91%
• Average Volume (3M): 436.91K
• Price to Earnings (P/E): 32.9
• Beta (1Y): 0.74
• Revenue Growth: 6.52%
• EPS Growth: -13.92%
• Country: CA
• Employees: 8
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.21
• Shares Outstanding: 154,500,000
• 10 Day Avg. Volume: 598,842
• 30 Day Avg. Volume: 436,906
• PEG Ratio: 0.20
• Price to Book (P/B): 2.79
• Price to Sales (P/S): 13.04
• P/FCF Ratio: 13.96
• 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$33.15
• Price Target Upside: 5.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 0.88
• Revenue Forecast (FY): C$398.00M

• Rating: 70 Outperform
• Price Target: C$34.00 ▲(8.66% Upside)
• Action: Upgraded Date: 02/27/26
• Date: Action: Upgraded 02/27/26

The score is primarily supported by strong profitability and manageable leverage, reinforced by a positive earnings-call outlook and guidance. Offsetting factors are the sharp recent revenue decline and free-cash-flow volatility, plus a relatively expensive valuation (high P/E) and technically overextended momentum signals.

Positive Factors

Asset-light royalty model

An asset-light royalty model reduces capital and operating expenditure requirements, lowering cyclical exposure and permitting scalable cash returns. By collecting contractually defined production shares while operators fund development, Topaz preserves cash flexibility to pay dividends and pursue selective acquisitions over time.

Production and reserves growth

Sustained production growth and a 10% increase in proved plus probable reserves demonstrate successful capture of operator-led development and reserve replacement above production levels. Higher reserves lengthen cash flow visibility and support recurring royalty revenue over multiple years.

Strong profitability and manageable leverage

Elevated margins and modest leverage provide financial resilience through commodity cycles. Strong profitability increases internal cash available for dividends and opportunistic buys, while manageable debt preserves capacity for acquisitions or to absorb short-term revenue shocks without jeopardizing long-term solvency.

Negative Factors

Reliance on operator-funded activity

Topaz’s growth depends heavily on the capital allocation and drilling plans of a limited set of operators. This concentration means Topaz cannot directly control drilling cadence or capex; a shift in operator priorities or reduced spending could materially depress royalty production and long-term revenue growth.

Free cash flow volatility

Historical swings in free cash flow weaken predictability of funding for dividends, buybacks, or acquisitions. Even though 2025 FCF roughly matched net income, prior negative years highlight sensitivity to timing, hedges and production, increasing the risk that cash returns or reinvestment plans may face interruptions during downturns.

Relatively high dividend payout ratio

A payout near two-thirds of earnings limits retained capital for balance sheet strengthening and organic growth. High distributions increase vulnerability to commodity swings or temporary production declines, forcing either dividend cuts or higher leverage if adverse conditions persist, constraining long-term strategic flexibility.

Topaz Energy Corp Business Overview & Revenue Model

Company Description

Topaz Energy Corp. operates as a royalty and energy infrastructure company. It operates in Royalty Production and Infrastructure segments. The company holds gross overriding royalty interests on approximately 5.3 million gross acres of developed and undeveloped lands. It is also involved in the natural gas processing and water management infrastructure activities. The company was formerly known as Exshaw Oil Corp. and changed its name to Topaz Energy Corp. in November 2019. Topaz Energy Corp. was incorporated in 2006 and is headquartered in Calgary, Canada.

How the Company Makes Money

Topaz Energy Corp generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids produced from its operational sites. The company's revenue model is built on long-term contracts and spot market sales, allowing for flexibility in pricing based on market conditions. Key revenue streams include production from owned and operated wells, as well as royalties from partnerships and joint ventures in exploration projects. Additionally, Topaz Energy benefits from strategic partnerships with other energy companies, allowing for shared resources and technologies that enhance operational efficiency and reduce costs, thus positively impacting overall earnings.

Topaz Energy Corp Financial Statement Overview

Summary

Strong profitability (net margin improved to ~40% in 2025) and manageable leverage (debt-to-equity ~0.38) support the score, but it is held back by a steep 2025 revenue decline (-51%) and historically volatile free cash flow (including negative years in 2022 and 2024).

Income Statement

Profitability is a clear strength: net margin improved to ~40% in 2025 (annual) from ~15% in 2024, with strong operating profitability as well. That said, the top line has been shrinking for several years and fell sharply in 2025 (annual) (-51% revenue growth), which raises questions about growth durability despite the margin strength.

Balance Sheet

Leverage looks manageable with debt-to-equity around 0.38 in 2025 (annual), and equity has grown over time, supporting balance sheet stability. The main offset is that debt has risen versus earlier years, and returns on equity, while improving in 2025 (~8.5%), have been modest historically—suggesting the company is not consistently converting its capital base into high returns.

Cash Flow

Cash generation is generally solid: operating cash flow is strong and free cash flow in 2025 (annual) nearly matches net income (~0.98x), which supports reinvestment and shareholder returns. However, free cash flow has been volatile, including a large negative year in 2024 and negative free cash flow also in 2022, making consistency the key weakness.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	324.72M	312.40M	321.42M	369.65M	211.54M
Gross Profit	182.86M	305.05M	314.52M	363.27M	207.29M
EBITDA	300.04M	293.00M	316.13M	351.45M	193.01M
Net Income	128.74M	46.39M	47.64M	99.36M	27.56M
Balance Sheet
Total Assets	2.24B	1.94B	1.70B	1.89B	1.67B
Cash, Cash Equivalents and Short-Term Investments	580.00K	147.00K	3.46M	0.00	0.00
Total Debt	570.77M	540.40M	391.64M	464.58M	276.86M
Total Liabilities	723.35M	627.64M	460.41M	532.40M	346.97M
Stockholders Equity	1.52B	1.32B	1.24B	1.36B	1.32B
Cash Flow
Free Cash Flow	303.50M	-161.63M	246.03M	-36.81M	162.24M
Operating Cash Flow	308.76M	276.27M	300.58M	317.88M	165.02M
Investing Cash Flow	-132.19M	-439.99M	-51.96M	-354.10M	-921.40M
Financing Cash Flow	-176.14M	160.41M	-245.16M	36.22M	536.20M

Topaz Energy Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.29
• 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:TPZ, the sentiment is Positive. The current price of 31.29 is above the 20-day moving average (MA) of 29.67, above the 50-day MA of 28.46, and above the 200-day MA of 26.13, indicating a bullish trend. The MACD of 0.86 indicates Negative momentum. The RSI at 71.41 is Negative, neither overbought nor oversold. The STOCH value of 76.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TPZ.

Topaz Energy Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPL	77 Outperform	C$35.30B	17.93	9.91%	5.44%	2.81%	-14.92%
TPZ	70 Outperform	C$4.83B	32.90	4.75%	4.91%	6.52%	-13.92%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
KEY	61 Neutral	C$12.01B	23.33	15.28%	4.81%	-4.09%	-3.57%
GEI	58 Neutral	$5.08B	20.80	16.47%	6.61%	-12.18%	-29.17%
TVK	54 Neutral	C$3.05B	26.86	15.90%	0.43%	50.38%	25.63%
TWM	43 Neutral	C$179.59M	-0.98	-33.62%	―	-23.30%	76.16%

Topaz Energy Corp Corporate Events

Topaz Energy Lifts Reserves, Free Cash Flow and Dividend as It Sets 2026 Outlook

Topaz Energy Corp. reported strong 2025 results, highlighted by 17% higher royalty production, 20% higher infrastructure revenue, sharply lower cash expenses and record free cash flow margins, which supported higher cash flow and earnings per share as well as a 4% dividend increase. The company invested $125.4 million in royalty and infrastructure acquisitions, saw operators spend $2.8 billion across its lands, and grew developed reserves by 10%, including a 50% jump in Clearwater reserves and extended reserve life indices in its key Clearwater and NEBC Montney areas.

Looking ahead, Topaz issued 2026 guidance calling for average royalty production of 23,500 to 23,900 boe/d, processing revenue of up to $94 million and a dividend of $1.36 per share with a targeted 68% payout ratio, while expecting to exit the year with net debt of roughly $420 million. The company’s results and outlook underscore its strategy of leveraging operator-funded capital to grow reserves and cash flow, reinforcing its position as a high-margin royalty and infrastructure platform in Western Canada and supporting continued income and reserve-backed value for shareholders.

The most recent analyst rating on (TSE:TPZ) stock is a Buy with a C$32.00 price target. To see the full list of analyst forecasts on Topaz Energy Corp stock, see the TSE:TPZ Stock Forecast page.