Company Overview
Amplify Energy Corp. engages in the acquisition, development, exploitation, and production of oil and natural gas properties primarily located within the United States, with its core assets consisting of the Beta field in federal waters offshore from the Port of Long Beach. The company operates within the broader Energy sector, specifically functioning in the Oil & Gas E&P industry, which involves the exploration and extraction of hydrocarbon resources. This entity employs a workforce of 184 individuals and holds a market capitalization of $269.05M. With an annual revenue of $263.36M, the company's financial scale places it in a specific tier of mid-cap energy producers, where the market cap relative to revenue suggests a valuation that is not heavily capitalized compared to its sales volume.
Financial Health
The company reported a trailing twelve-month revenue of $263.36M and generated a net income of $41.60M, while achieving an EBITDA of $80.31M. The significant gap between the $263.36M revenue and the $41.60M net income reveals a substantial cost structure, where operating expenses and taxes consume approximately 83.3% of top-line sales before reaching the bottom line. However, the company maintains a negative free cash flow of $-26,008,000, which indicates that capital expenditures and other cash outflows exceeded operational cash generation during the period. Despite the negative free cash flow, the balance sheet remains robust due to a cash balance of $60.67M, which significantly exceeds the total debt of $3.75M. The debt-to-equity ratio stands at 0.82, suggesting a leveraged position where debt usage is moderate relative to equity, yet the substantial cash reserve provides a buffer against short-term liquidity needs. Furthermore, the current ratio of 2.25 indicates strong short-term liquidity, as current assets are more than double current liabilities, ensuring the ability to meet obligations. Management effectiveness is reflected in a Return on Equity of 10.1% and a Return on Assets of 3.6%, showing that equity is being utilized efficiently to generate returns, although asset efficiency is lower than equity efficiency.
Valuation Assessment
Amplify Energy Corp. trades with a trailing P/E ratio of 6.33 and a forward P/E of 7.41. The difference between the trailing P/E of 6.33 and the forward P/E of 7.41 implies that the market expects earnings to grow slightly in the future, as the multiple on expected future earnings is higher than that of historical earnings. The price-to-book ratio is 0.58, which indicates that the market values the company at less than its book value, suggesting no market premium over the net asset value recorded on the balance sheet. Alternative valuation metrics show a price-to-sales ratio of 1.02 and an EV/EBITDA of 2.64, suggesting the company is valued at a premium to its sales but at a very low multiple of its earnings before interest, taxes, depreciation, and amortization relative to enterprise value. The stock has a 52-week high of $6.79 and a 52-week low of $2.27. To determine the current price position, one must note that the current price sits within this range, specifically trading above the 52-week low of $2.27 and below the 52-week high of $6.79. The beta value is -0.13, which is an unusual metric for an energy stock as it is typically positive, indicating that the stock price moves inversely to the broader market or exhibits volatility characteristics distinct from the general market direction.
Growth & Income
The company experienced a revenue growth of -18.1% year-over-year, while earnings growth is listed as N/A. The absence of reported earnings growth data combined with the decline in revenue suggests a contraction in operations or profitability relative to the previous year. Since the company has a dividend yield of N/A and a payout ratio of 0.0%, it does not distribute dividends to shareholders. Consequently, the company reinvests its earnings, or in this case its cash reserves, into operations rather than paying dividends to investors. The overall growth and income profile is characterized by a decline in revenue without a current dividend payout, highlighting a focus on capital retention rather than income distribution to shareholders during this period of revenue contraction.