Obsidian Energy (TSX:OBE) - Share price, News & Analysis

OBE fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	3/6
Financial Health	2/6
Dividends	0/6

OBE Stock Overview

Obsidian Energy Ltd. primarily focuses on the exploration, production, and development of oil and natural gas properties in the Western Canada Sedimentary Basin.

Rewards

Trading at 83.5% below our estimate of its fair value

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of 53.3% per year for the next 3 years

High level of non-cash earnings

Has a high level of debt

Significant insider selling over the past 3 months

+ 1 more risk

Obsidian Energy Competitors

Canadian Natural Resources

TSX:CNQ

CA$91.6b

Ovintiv

TSX:OVV

CA$15.6b

Crescent Point Energy

TSX:CPG

CA$5.5b

Vermilion Energy

TSX:VET

CA$4.1b

Price History & Performance

Summary of all time highs, changes and price drops for Obsidian Energy
Historical stock prices
Current Share Price	CA$10.51
52 Week High	CA$12.38
52 Week Low	CA$1.95
Beta	3.18
1 Month Change	-3.84%
3 Month Change	8.24%
1 Year Change	422.89%
3 Year Change	341.60%
5 Year Change	-23.79%
Change since IPO	114.49%

Recent News & Updates

May 12

Why Obsidian Energy's (TSE:OBE) Earnings Are Weaker Than They Seem

Even though Obsidian Energy Ltd. ( TSE:OBE ) posted strong earnings recently, the stock hasn't reacted in a large way...

Shareholder Returns

	OBE	CA Oil and Gas	CA Market
7D	9.9%	2.9%	0.8%
1Y	422.9%	60.3%	4.8%

Return vs Industry: OBE exceeded the Canadian Oil and Gas industry which returned 60.3% over the past year.

Return vs Market: OBE exceeded the Canadian Market which returned 4.8% over the past year.

Price Volatility

Is OBE's price volatile compared to industry and market?
OBE volatility
OBE Average Weekly Movement	9.8%
Oil and Gas Industry Average Movement	10.2%
Market Average Movement	9.9%
10% most volatile stocks in CA Market	16.9%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: OBE is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: OBE's weekly volatility (10%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
n/a	173	Stephen Loukas	https://www.obsidianenergy.com

Obsidian Energy Ltd. primarily focuses on the exploration, production, and development of oil and natural gas properties in the Western Canada Sedimentary Basin. The company was formerly known as Penn West Petroleum Ltd. and changed its name to Obsidian Energy Ltd.

Obsidian Energy Fundamentals Summary

How do Obsidian Energy's earnings and revenue compare to its market cap?
OBE fundamental statistics
Market Cap	CA$862.63m
Earnings (TTM)	CA$414.60m
Revenue (TTM)	CA$537.50m

2.1x

P/E Ratio

1.6x

P/S Ratio

Is OBE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
OBE income statement (TTM)
Revenue	CA$537.50m
Cost of Revenue	CA$174.80m
Gross Profit	CA$362.70m
Other Expenses	-CA$51.90m
Earnings	CA$414.60m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	5.05
Gross Margin	67.48%
Net Profit Margin	77.13%
Debt/Equity Ratio	47.1%

How did OBE perform over the long term?

See historical performance and comparison

Valuation

Is Obsidian Energy undervalued compared to its fair value and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: OBE (CA$10.51) is trading below our estimate of fair value (CA$63.63)

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

Price To Earnings Ratio

PE vs Industry: OBE is good value based on its PE Ratio (2.1x) compared to the Canadian Oil and Gas industry average (8.6x).

PE vs Market: OBE is good value based on its PE Ratio (2.1x) compared to the Canadian market (11.5x).

Price to Earnings Growth Ratio

PEG Ratio: OBE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Price to Book Ratio

PB vs Industry: OBE is good value based on its PB Ratio (1.1x) compared to the CA Oil and Gas industry average (2.1x).

Future Growth

How is Obsidian Energy forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-53.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: OBE's earnings are forecast to decline over the next 3 years (-53.3% per year).

Earnings vs Market: OBE's earnings are forecast to decline over the next 3 years (-53.3% per year).

High Growth Earnings: OBE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: OBE's revenue (2.8% per year) is forecast to grow slower than the Canadian market (6.4% per year).

High Growth Revenue: OBE's revenue (2.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if OBE's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Obsidian Energy performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: OBE has a high level of non-cash earnings.

Growing Profit Margin: OBE became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: OBE has become profitable over the past 5 years, growing earnings by 14.5% per year.

Accelerating Growth: OBE has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: OBE has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (185%).

Return on Equity

High ROE: OBE's Return on Equity (52.5%) is considered outstanding.

Financial Health

How is Obsidian Energy's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: OBE's short term assets (CA$112.2M) do not cover its short term liabilities (CA$596.2M).

Long Term Liabilities: OBE's short term assets (CA$112.2M) do not cover its long term liabilities (CA$132.4M).

Debt to Equity History and Analysis

Debt Level: OBE's net debt to equity ratio (46.4%) is considered high.

Reducing Debt: OBE's debt to equity ratio has increased from 16.9% to 47.1% over the past 5 years.

Debt Coverage: OBE's debt is well covered by operating cash flow (68.4%).

Interest Coverage: OBE's interest payments on its debt are well covered by EBIT (14.5x coverage).

Balance Sheet

Dividend

What is Obsidian Energy current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate OBE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate OBE's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if OBE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if OBE's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: OBE is not paying a notable dividend for the Canadian market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as OBE has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure

CEO

Stephen Loukas (43 yo)

2.42yrs

Tenure

CA$2,265,075

Compensation

Mr. Stephen Elias Loukas serves as a Managing Member, Partner and Portfolio Manager at FrontFour Capital Group LLC. Mr. Loukas serves as Director, Interim Chief Executive Officer and President of Obsidian...

CEO Compensation Analysis

Compensation vs Market: Stephen's total compensation ($USD1.76M) is about average for companies of similar size in the Canadian market ($USD1.54M).

Compensation vs Earnings: Stephen's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: OBE's management team is considered experienced (2.4 years average tenure).

Board Members

Experienced Board: OBE's board of directors are considered experienced (4.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: OBE insiders have sold more shares than they have bought in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31