StocksNY
1. Valuation Metrics ✅
-
P/E Ratio: CIVI’s trailing P/E is 3.48, and forward P/E is 4.68—both significantly lower than industry averages, indicating undervaluation.
-
P/B Ratio: At 1.04, it’s near book value, suggesting fair valuation.
-
Dividend Yield: Approximately 14.5% with a payout ratio of 61%, indicating a sustainable and attractive yield.
Score: 9/10
2. Financial Health ✅
-
Debt-to-Equity Ratio: 0.68, which is moderate but higher than some peers.
-
Current Ratio: 0.45, below the preferred >1.5, indicating potential liquidity concerns.
-
Profit Margins: Gross margin at 87.98%, operating margin at 36.26%, and net margin at 16.11%—all strong figures.
Score: 6/10
3. Growth Potential ✅
-
Revenue & EPS Growth: Revenue has grown by 75.45% annually over recent years, but EPS has declined by 17.44% in the last year.
-
Forward Guidance: Analysts project a revenue decline of 3.1% and EPS growth of 2.5% annually over the next few years.
Score: 5/10
4. Cash Flow Strength ✅
-
Free Cash Flow (FCF): Positive, with $1.27 billion reported in 2024.
-
FCF Yield: Approximately 50%, which is exceptionally high.
Score: 10/10
5. Industry Position ✅
-
Competitive Moats: No significant economic moat identified, indicating vulnerability to competition.
-
Market Share: Approximately 2.7%, showing modest presence in the market.
Score: 4/10
6. Management & Governance ✅
-
Track Record: Management has demonstrated strong operational execution, especially in the Permian Basin.
-
ESG Score: Received an ‘F’ rating, placing it in the bottom 10% for ESG performance.
Score: 5/10
7. Risk Factors ✅
-
Beta: 1.47, indicating higher volatility compared to the market.
-
Sector Risks: As an energy company, it’s subject to cyclical risks, including commodity price fluctuations.
Score: 5/10
8. Market Sentiment ✅
-
News/Events: Recent analyst ratings suggest a ‘Strong Sell’ based on technical indicators.
-
RSI Indicator: 14-day RSI at 36.93, nearing oversold territory.
Score: 4/10
9. Margin of Safety ✅
-
Intrinsic Value: DCF valuations estimate intrinsic value between $57.93 and $79.93, suggesting the stock is undervalued by 50–66%.
Score: 9/10
10. Peer Comparison ✅
-
Key Multiples: EV/EBITDA at 1.8, significantly lower than the industry average of 5.9, indicating undervaluation.
Score: 9/10
Total Score: 66/100
Summary: Civitas Resources, Inc. exhibits strong valuation metrics and cash flow strength, suggesting potential undervaluation. However, concerns arise from its liquidity position, lack of a competitive moat, and ESG performance.
Disclaimer:
This stock review has been generated using artificial intelligence and is for informational purposes only. The content provided does not constitute financial, investment, or trading advice. AI analysis may not account for all market factors, and past performance is not indicative of future results.
Before making any investment decisions, conduct your own research and consult a qualified financial professional. We do not assume any responsibility for losses or damages resulting from the use of this information.Investing in the stock market involves risks, including the loss of principal. Proceed at your own discretion.
Fair Use Disclaimer
The logos and trademarks featured in this stock review are the property of their respective owners. Their use in this content is strictly for informational and editorial purposes, in accordance with fair use principles under applicable copyright and trademark laws. This review is an independent analysis and is not endorsed, sponsored, or affiliated with any of the companies mentioned.
If you are a rights holder and believe that the use of your logo does not comply with fair use, please contact us, and we will address any concerns promptly.
