Company Overview
APA Corporation operates as an independent energy company engaged in the exploration, development, and production of natural gas, crude oil, and natural gas liquids across the United States, Egypt, the North Sea, and through exploration activities in Suriname. The firm functions within the Energy sector and specifically the Oil & Gas E&P industry, a segment characterized by capital-intensive operations focused on extracting hydrocarbon reserves from the ground. The company currently maintains a market capitalization of $15.68B and employs 1791 individuals to support its extensive operational footprint. These valuation and revenue figures position APA as a significant mid-to-large-cap entity with substantial annual revenue of $8.68B, indicating a substantial scale of operations that requires robust management of global supply chain logistics and regulatory compliance across multiple jurisdictions.
Financial Health
The company reported a trailing twelve-month revenue of $8.68B, net income of $1.43B, and EBITDA of $5.15B, highlighting a significant spread between top-line sales and bottom-line profit that reflects the high cost structure inherent in upstream energy production. This gap between revenue and net income is heavily influenced by substantial operating expenses, taxes, and depletion costs which reduce the pre-tax earnings by approximately $7.24B before arriving at the $1.43B net income figure. Free cash flow stands at $1.96B, providing the company with considerable financial flexibility to service its obligations, fund capital expenditures, or return capital to shareholders without relying solely on external financing. The gross margin is reported at 68.0%, while the operating margin is 30.6% and the profit margin is 16.5%, illustrating that for every dollar of revenue generated, the company retains $0.68 in gross profit, $0.31 after operating expenses, and $0.16 after all costs including taxes. On the balance sheet, APA holds $516.00M in cash against total debt of $4.81B, resulting in a debt-to-equity ratio of 68.69, which indicates a highly leveraged capital structure typical of the exploration and production sector. The current ratio is 0.82, suggesting that the company's current assets are less than its current liabilities, indicating a tight short-term liquidity position where immediate assets may be insufficient to cover immediate obligations without relying on operational cash flow or refinancing. Return on equity is 25.3% and return on assets is 9.0%, revealing that management generates significant returns on shareholder equity while maintaining a lower return on the total asset base, a disparity often seen in leveraged companies where equity is a fraction of total capital employed.
Valuation Assessment
The trailing twelve-month P/E ratio is 11.13, while the forward P/E is 13.52, implying that the market expects earnings growth to be lower than the current earnings rate or that future earnings are anticipated to be suppressed relative to current valuations. The price-to-book ratio is 2.57, indicating that the market values the company at a significant premium over its book value, suggesting that investors are pricing in the value of reserves and intangible assets not fully captured on the balance sheet. Alternative valuation metrics include a price-to-sales ratio of 1.81 and an EV/EBITDA of 4.06, which suggest the stock is valued at less than two times its sales and at a very low multiple of earnings before interest, taxes, depreciation, and amortization compared to historical averages for the industry. The 52-week high is $44.53 and the 52-week low is $13.58, and without the current share price explicitly defined in the provided facts, the specific percentage distance from these extremes cannot be calculated, though the wide range indicates significant price volatility over the last year. The beta value is 0.71, meaning the stock is expected to be less volatile than the broader market, moving roughly 29% less than the market in either direction during periods of standard volatility.
Growth & Income
Revenue growth year-over-year is -28.0% and earnings growth year-over-year is -18.2%, indicating that both metrics are contracting, with earnings declining at a slower rate than revenue, which implies that the cost structure is benefiting slightly from price increases or efficiency gains despite the overall volume decline. The company pays a dividend with a yield of 2.2% and a payout ratio of 25.1%, which is a conservative payout level that leaves the majority of earnings retained within the company to support operations and debt obligations. Given the negative earnings growth, the sustainability of this dividend relies on the company's ability to maintain cash flow generation despite the contraction in reported net income. The overall growth and income profile presents a scenario of declining operational scale with a modest, sustainable dividend yield supported by strong free cash flow generation and a leveraged balance sheet.