Hammerhead Energy Inc.

TSX:HHRS Stock Report

Market Cap: CA$2.0b

Hammerhead Energy Valuation

Is HHRS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of HHRS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HHRS (CA$20.45) is trading below our estimate of fair value (CA$44.13)

Significantly Below Fair Value: HHRS is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HHRS?

Key metric: As HHRS is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for HHRS. This is calculated by dividing HHRS's market cap by their current revenue.
What is HHRS's PS Ratio?
PS Ratio2.7x
SalesCA$731.47m
Market CapCA$1.95b

Price to Sales Ratio vs Peers

How does HHRS's PS Ratio compare to its peers?

The above table shows the PS ratio for HHRS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average3.2x
HWX Headwater Exploration
3.4x0.5%CA$1.7b
TVE Tamarack Valley Energy
1.7x-3.0%CA$2.4b
FRU Freehold Royalties
6.8x-1.6%CA$2.1b
BTE Baytex Energy
0.9x-5.1%CA$3.2b
HHRS Hammerhead Energy
2.7x13.4%CA$1.5b

Price-To-Sales vs Peers: HHRS is expensive based on its Price-To-Sales Ratio (2.7x) compared to the peer average (1.6x).

Price to Sales Ratio vs Industry

How does HHRS's PS Ratio compare vs other companies in the CA Oil and Gas Industry?

15 CompaniesPrice / SalesEstimated GrowthMarket Cap
PKI Parkland
0.2x2.2%US$4.28b
GEI Gibson Energy
0.3x-5.8%US$2.75b
SES Secure Energy Services
0.4x-56.0%US$2.74b
SGQ SouthGobi Resources
0.4xn/aUS$143.00m
HHRS 2.7xIndustry Avg. 2.0xNo. of Companies19PS01.63.24.86.48+
15 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: HHRS is expensive based on its Price-To-Sales Ratio (2.7x) compared to the Canadian Oil and Gas industry average (1.9x).

Price to Sales Ratio vs Fair Ratio

What is HHRS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HHRS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio2.7x
Fair PS Ratio2.8x

Price-To-Sales vs Fair Ratio: HHRS is good value based on its Price-To-Sales Ratio (2.7x) compared to the estimated Fair Price-To-Sales Ratio (2.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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