Veren (VRN) AI Stock Analysis

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TSE:VRN Dividends

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Veren

(NYSE:VRN)

69Neutral

Veren's overall stock score reflects its robust financial performance and strategic operational achievements in 2024, particularly in cash flow and debt management. Despite mixed short-term technical indicators, its fair valuation and strong dividend yield offer stability. The positive sentiment from the earnings call further supports a favorable outlook, with noted operational challenges being addressed.

Positive Factors

Financial Performance

Analyst reiterates a BUY rating on VRN, indicating confidence in the company's long-term potential.

Production Performance

VRN's new SPE design is showing IP30 rates 30% better than type curve and 50% on an oil-weighted basis.

Reserve Report

Today's good reserve report should set a base and alleviate any lingering concerns from the asset sales and poor well results from last year.

Negative Factors

Guidance Revision

The revised production guidance reflects a decrease due to the underperformance of the Gold Creek wells and third-party outages.

Market Reaction

The target price has been lowered to C$13.00 due to updated estimates, reflecting a more cautious outlook.

Production Challenges

The company's trial of a new completions design at Gold Creek has proven unsuccessful, resulting in lower production rates.

Veren (VRN) vs. S&P 500 (SPY)

Market Cap

C$5.08B

Dividend Yield5.53%

Average Volume (3M)5.86M

Price to Earnings (P/E)18.8

Beta (1Y)1.47

Revenue Growth16.12%

EPS Growth-56.06%

CountryCA

Employees746

SectorEnergy

Sector Strength52

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)0.45

Shares Outstanding611,816,650

10 Day Avg. Volume4,879,733

30 Day Avg. Volume5,862,007

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.33

Price to Cash Flow (P/CF)2.90

P/FCF Ratio8.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$11.63

Price Target Upside39.94% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Veren Business Overview & Revenue Model

Company DescriptionVeren (VRN) is a technology company specializing in the development and distribution of virtual reality (VR) software and hardware solutions. The company operates within the tech and entertainment sectors, offering products tailored to enhance immersive experiences for both consumer and enterprise applications. Veren's core offerings include VR headsets, content platforms, and developer tools designed to support interactive virtual environments for gaming, training, and various professional use cases.

How the Company Makes MoneyVeren generates revenue through a multi-faceted business model centered around the sale of VR hardware, software licensing, and content distribution. The company sells its VR headsets directly to consumers through retail and online channels, as well as licensing its VR software to developers and enterprises looking to create and deploy custom VR applications. Additionally, Veren operates a content platform where users can purchase or subscribe to VR experiences, providing a recurring revenue stream through digital content sales. Strategic partnerships with technology companies and content creators further bolster Veren's revenue by expanding its reach and enhancing its product offerings.

Veren Financial Statement Overview

Summary

Veren's financial statements reveal a solid structure with a strong equity base and effective cash flow management. Revenue growth is robust, but declining net income and profitability metrics suggest operational challenges. The balance sheet is stable with improved leverage ratios.

Income Statement

Positive

Veren's income statement shows mixed performance. The gross profit margin improved significantly from previous years to 56.5% in 2024, indicating strong cost management. However, net profit margin and EBIT have decreased, which might suggest rising costs or operational inefficiencies. Revenue growth rate for 2024 was strong at 38.3%, recovering from a decline in 2023.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a strong equity base, as indicated by the equity ratio of 57.5% in 2024. Debt-to-equity ratio has improved to 0.45, suggesting prudent financial leverage. However, return on equity has dropped to 4.0%, highlighting potential profitability issues.

Cash Flow

Positive

Cash flow statements show robust operating cash flow, maintaining a strong cash conversion with a ratio of 7.73 in 2024. Despite a decrease in free cash flow, the company managed capital expenditures well, showing resilience in cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.41B	3.19B	3.51B	2.83B	1.49B
	Gross Profit
2.49B	1.26B	1.82B	1.25B	86.60M
	EBIT
0.00	1.22B	1.71B	1.14B	2.20M
	EBITDA
1.88B	2.27B	2.60B	4.06B	-2.32B
	Net Income Common Stockholders
273.30M	570.30M	1.48B	2.36B	-2.52B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.10M	17.30M	289.90M	13.50M	8.80M
	Total Assets
11.75B	12.78B	9.49B	9.17B	6.65B
	Total Debt
3.07B	3.71B	1.57B	2.11B	2.42B
	Net Debt
3.05B	3.69B	1.28B	2.10B	2.41B
	Total Liabilities
4.99B	5.91B	2.99B	3.77B	3.82B
	Stockholders Equity
6.76B	6.87B	6.49B	5.41B	2.82B
Cash Flow		Free Cash Flow
524.00M	975.20M	1.16B	819.70M	161.70M
	Operating Cash Flow
2.11B	2.20B	2.19B	1.50B	860.50M
	Investing Cash Flow
-525.00M	-4.24B	-860.60M	-1.19B	-269.00M
	Financing Cash Flow
-1.59B	1.77B	-1.06B	-297.20M	-639.50M

Veren Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.31

Price Trends

50DMA

8.14

Positive

100DMA

7.69

Positive

200DMA

8.21

Positive

Market Momentum

MACD

-0.08

Positive

RSI

48.99

Neutral

STOCH

87.73

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VRN, the sentiment is Positive. The current price of 8.31 is below the 20-day moving average (MA) of 8.67, above the 50-day MA of 8.14, and above the 200-day MA of 8.21, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 48.99 is Neutral, neither overbought nor oversold. The STOCH value of 87.73 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:VRN.

Veren Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SU	75 Outperform	$59.15B	10.12	13.82%	4.64%	3.25%	-25.69%
IMO	74 Outperform	$44.17B	9.61	21.08%	2.79%	1.08%	6.38%
ENB	73 Outperform	$135.68B	26.59	8.63%	5.89%	24.95%	-17.19%
TRP	71 Outperform	$69.71B	15.15	16.85%	5.34%	5.31%	61.02%
CVE	70 Outperform	$28.83B	9.42	10.88%	4.36%	3.97%	-22.22%
VRN	69 Neutral	C$5.08B	18.78	4.07%	5.53%	16.12%	-56.06%
Sector *	55 Neutral	$7.05B	3.40	-6.09%	6.09%	-0.43%	-51.04%

* Energy Sector Average

Performance Comparison

TSE:VRN

Veren

8.46

-3.00

-26.19%

TSE:TRP

TC Energy

67.78

25.49

60.26%

TSE:CVE

Cenovus Energy

16.78

-11.19

-40.00%

TSE:IMO

Imperial Oil

94.10

0.05

0.05%

TSE:ENB

Enbridge

63.11

17.74

39.09%

TSE:SU

Suncor Energy

48.96

-2.32

-4.52%

Veren Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: 21.70% | Next Earnings Date: May 9, 2025

Earnings Call Sentiment Positive

The earnings call demonstrates a strong financial and operational performance in 2024, with significant cash flow generation, debt reduction, and production growth. The strategic focus on Montney and Duvernay assets yielded impressive results, and the company maintains a positive outlook for 2025 despite some operational challenges related to facilities downtime and completion design trials.

Highlights

Excess Cash Flow Generation

Veren generated over CAD640 million of excess cash flow in 2024, with nearly 1/3 realized in Q4. 60% of this excess cash flow was returned to shareholders through dividends and share repurchases.

Significant Debt Reduction

Veren reduced its net debt by 35% or CAD1.3 billion, achieving an investment-grade credit rating.

Record Production Levels

Annual average production reached 191,000 BOE per day, with Q4 production at 189,000 BOE per day. Montney and Duvernay assets accounted for nearly 80% of Q4 production, marking a 10% growth from Q1.

Strong Reserve Additions

Veren organically replaced 173% of its 2024 production on a 2P basis, with positive technical revisions. A strong recycle ratio of 2.1x was achieved based on 2P F&D costs.

Operational Achievements in Montney and Duvernay

Successful implementation of single-point entry completions in Montney, with average peak 30-day rate of 1,270 BOE per day per well (30% above area type well) and a high oil cut of 80%. In Duvernay, multi-well pads achieved a 25% above area type well rate.

Positive Outlook for 2025

Projected annual production guidance of 188,000 to 196,000 BOE per day, with anticipated excess cash flow of $625 million to $825 million based on $70 to $75 per barrel WTI pricing.

Lowlights

Facilities Downtime Impact

Planned facilities downtime in early 2025 is expected to impact production growth, which is weighted to the second half of the year.

Challenges with Plug and Perf Trials

Trials of plug and perf completions in Montney showed lower initial performance, leading to a return to single-point entry designs for better results.

Company Guidance

During the Veren 2024 Q4 and full-year results call, Craig Bryksa, CEO, provided comprehensive guidance on the company's performance and future outlook. In 2024, Veren generated over CAD640 million in excess cash flow, returning 60% to shareholders through dividends and share repurchases, and reduced net debt by 35% or CAD1.3 billion. The company achieved annual average production of 191,000 BOE per day, with Q4 production at 189,000 BOE per day, mainly from their Alberta Montney and Duvernay assets. Veren's 2024 production was organically replaced at 173% on a 2P basis, with a recycle ratio of 2.1x. For 2025, Veren projects annual production between 188,000 to 196,000 BOE per day, with capital expenditures forecasted at $1.48 billion to $1.58 billion, including $240 million for facilities. They anticipate generating $625 million to $825 million in excess cash flow, based on $70 to $75 per barrel WTI and $2.25 per Mcf AECO pricing, continuing the practice of returning 60% of this cash flow to shareholders.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.