ROCC Stock Overview
Ranger Oil Corporation, an independent oil and gas company, engages in the onshore exploration, development, and production of crude oil, natural gas liquids, and natural gas in the United States.
Ranger Oil Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$38.39|
|52 Week High||US$53.59|
|52 Week Low||US$15.00|
|1 Month Change||12.98%|
|3 Month Change||11.66%|
|1 Year Change||143.59%|
|3 Year Change||21.95%|
|5 Year Change||-1.51%|
|Change since IPO||-5.50%|
Recent News & Updates
Ranger Oil: Racing Towards New Highs
The market often does not see the cyclical appreciation potential until a cyclical recovery is well underway. The key to making money with cyclical stocks is to sell after the recovery but before the market top (or at least near it). There is always a risk of a recovery aborting. Oil and gas has cleaned the house in both 2016 and again in 2020. Therefore, any coming correction is unlikely to affect the industry as much as other industries that are over-priced. Ranger Oil management is building a more valuable company to take full advantage of the latest industry upswing. (Note: This article appeared in the newsletter on May 28, 2022 and has been updated as needed.) One of the concepts that is hard to get across for any cyclical stock like Ranger Oil (ROCC) is that management will most likely exceed earlier highs in the latest cycle. So many times, investors look at market bottoms and only see years of decline. A 20% or 30% profit on the way back up is often greeted with loud cheers of success. But most cycles do not abort the way the last one did (though there is always the risk in any recovery). In fact, the recent stock price pullback has largely ignited fears that "the party is over". But the essential ingredient of over production is lacking. Similarly, a much-feared recession is unlikely to last long. Rather this is likely to prove to be a case of the market spotting "eleven of the last seven" recessions (yet again!). Worry and fear sells. It also makes contrarian investing very hard. Economic Background Now, there is some fears of a recession that is brought about by rising interest rates. That certainly could happen. But from an economic viewpoint, this is not 2008 where the whole situation was allowed to continue for two presidential terms before things literally got out of control. This time around, the Federal Reserve is taking action a few years sooner. There are clearly some overpriced stocks that will get hit very hard by the decreasing liquidity (through the open market operations of the Federal Reserve) combined with the fact that many of those managements have now realized that competition arrived. Those stocks are very likely to make the headlines to the point that the correction now underway will seem much worse than it was. But the oil and gas part of the investment world was housecleaned twice (once in 2016 and again rather recently). There really is not enough left to clean out. Furthermore, the start of this rally saw the typical consolidation of the stronger competitors shopping for bargains that financially weaker members of the industry were willing to unload. That also included some who thought they could make a killing in the industry only to endure fiscal year 2020. Therefore, whatever lies ahead for the stock market is very unlikely to do to oil and gas what has already happened yet again. Oil and gas stocks are certainly volatile and a pullback at some point due to a recession is a possibility. The end of the current war would be another point that could cause a commodity price retreat. But the fact is that demand is in excess of supply. We have gone through these periods before with the result that the marketplace takes time to sort the situation out. So, no one should expect surpluses "tomorrow" or in the near future unless something unexpectedly significant is going to happen. Ranger Oil Fits Right In Ranger Oil is doing what many in the industry are doing. A lot of small producers have suffered tremendously over the last five years or so. They now want out and want out at very flexible prices. Ranger Oil management has got the company in a position to offer prices that get those sellers out while providing shareholders with a reasonably accretive deal. Ranger Oil Map Of Bolt-On Eagle Ford Acquisitions (Ranger Oil May 2022, Corporate Presentation) The company just acquired more acreage in a prime Eagle Ford location. Keep in mind that the company production is largely oil. The recent acquisitions appear to maintain that focus. Management announced a few more small transactions at the end of June to complement the transactions shown above. But the best part of the deal is that the acreage cost is well below the going rate for similar acreage in the Permian. Yet the wells often are every bit as profitable, and the Eagle Ford rarely suffers from insufficient takeaway capacity like the Permian did in the last upcycle. On an execution basis, the Eagle Ford often exceeds the Permian in profitability when the location costs of wells is included because the Permian takeaway issues lead to pricing discounts while the Eagle Ford often sells production at a premium to the related benchmark. There is no guarantees of course that it will again happen this time around. But, as the saying goes, I like the chances of another takeaway shortage developing in the Permian. The Permian is still the "hot basin" in the industry and attracts far more interest. That alone, should be a warning sign of what may happen as activity steadily increases. Furthermore, the midstream industry is waiting for customers to demand more takeaway capacity. Once that happens, it is typically two years until that capacity is actually in service. Oftentimes, the midstream industry is increasing capacity well into a cyclical downturn as transportation needs catch up with the last cycle peak. This is and will be a serious issue for the "hot spots" of the industry. It frequently leads to unexpected outperformance of basins thought to have inferior profitability prospects. The result is that some top operators just avoid the basin completely to produce their above average results. Ranger Oil picked up oil weighted inventory for less than $5K an acre at a time when some are paying $50K an acre and higher. Later announced acquisitions were similarly discounted even if not quite as good a price at times. This happens because the lease holdings purchased were small. Management is creating value by taking those "too-small" holdings and combining them into the larger contiguous holdings shown above. That creates value for shareholders before they even drill the first well. The real payback comes when management drills on this acreage. Very few managements discuss the cost of acreage as part of the well breakeven. In this case, the acre cost of roughly 5K an acre on 100 acre spacing would add about $500,000 to the breakeven calculation. That is easy to cover in this environment. But the company paying $50K an acre on that same spacing adds $5 million to the breakeven calculation. That much money is much harder for management to justify (especially given the steep first year production declines of these wells) in any pricing environment. The result is that Ranger Oil will show shareholders a far greater return on capital with the lower priced acreage. Conclusion This management is "going the extra mile" for shareholders by piecing together small parcels that are likely to be uneconomic by themselves into contiguous acreage that is more marketable and more profitable to drill. This is one of many signs that the company should outperform the next upcycle in the industry. Of course, investors have a lot more work to do than just one particular item to evaluate overall management.
Estimating The Intrinsic Value Of Ranger Oil Corporation (NASDAQ:ROCC)
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Ranger Oil Corporation...
|ROCC||US Oil and Gas||US Market|
Return vs Industry: ROCC exceeded the US Oil and Gas industry which returned 64.7% over the past year.
Return vs Market: ROCC exceeded the US Market which returned -9% over the past year.
|ROCC Average Weekly Movement||11.8%|
|Oil and Gas Industry Average Movement||8.9%|
|Market Average Movement||7.6%|
|10% most volatile stocks in US Market||17.1%|
|10% least volatile stocks in US Market||3.1%|
Stable Share Price: ROCC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 12% a week.
Volatility Over Time: ROCC's weekly volatility (12%) has been stable over the past year.
About the Company
Ranger Oil Corporation, an independent oil and gas company, engages in the onshore exploration, development, and production of crude oil, natural gas liquids, and natural gas in the United States. It engages in drilling unconventional horizontal development wells; and operates producing wells in the Eagle Ford Shale field in South Texas. As of December 31, 2021, it had total proved reserves of approximately 241 million barrels of oil equivalent; and 860 gross productive wells, as well as leased approximately 172,000 gross acres of leasehold and royalty interests.
Ranger Oil Fundamentals Summary
|ROCC fundamental statistics|
Is ROCC overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|ROCC income statement (TTM)|
|Cost of Revenue||US$67.14m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||5.65|
|Net Profit Margin||12.57%|
How did ROCC perform over the long term?See historical performance and comparison
Is ROCC undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for ROCC?
Other financial metrics that can be useful for relative valuation.
|What is ROCC's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does ROCC's PE Ratio compare to its peers?
|ROCC PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
TALO Talos Energy
DMLP Dorchester Minerals
MNRL Brigham Minerals
CDEV Centennial Resource Development
ROCC Ranger Oil
Price-To-Earnings vs Peers: ROCC is good value based on its Price-To-Earnings Ratio (6.8x) compared to the peer average (9.9x).
Price to Earnings Ratio vs Industry
How does ROCC's PE Ratio compare vs other companies in the US Oil and Gas Industry?
Price-To-Earnings vs Industry: ROCC is good value based on its Price-To-Earnings Ratio (6.8x) compared to the US Oil and Gas industry average (9.8x)
Price to Earnings Ratio vs Fair Ratio
What is ROCC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||6.8x|
|Fair PE Ratio||17.7x|
Price-To-Earnings vs Fair Ratio: ROCC is good value based on its Price-To-Earnings Ratio (6.8x) compared to the estimated Fair Price-To-Earnings Ratio (17.7x).
Share Price vs Fair Value
What is the Fair Price of ROCC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: ROCC ($38.39) is trading above our estimate of fair value ($30.58)
Significantly Below Fair Value: ROCC is trading above our estimate of fair value.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Ranger Oil forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?
Future Growth Score3/6
Future Growth Score 3/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ROCC's forecast earnings growth (15.4% per year) is above the savings rate (1.9%).
Earnings vs Market: ROCC's earnings (15.4% per year) are forecast to grow faster than the US market (14.4% per year).
High Growth Earnings: ROCC's earnings are forecast to grow, but not significantly.
Revenue vs Market: ROCC's revenue (8.1% per year) is forecast to grow faster than the US market (7.8% per year).
High Growth Revenue: ROCC's revenue (8.1% 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 ROCC's Return on Equity is forecast to be high in 3 years time
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How has Ranger Oil performed over the past 5 years?
Past Performance Score4/6
Past Performance Score 4/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ROCC has high quality earnings.
Growing Profit Margin: ROCC became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: ROCC has become profitable over the past 5 years, growing earnings by -50% per year.
Accelerating Growth: ROCC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: ROCC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (184.6%).
Return on Equity
High ROE: ROCC's Return on Equity (30.8%) is considered high.
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How is Ranger Oil's financial position?
Financial Health Score2/6
Financial Health Score 2/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: ROCC's short term assets ($275.7M) do not cover its short term liabilities ($445.7M).
Long Term Liabilities: ROCC's short term assets ($275.7M) do not cover its long term liabilities ($606.7M).
Debt to Equity History and Analysis
Debt Level: ROCC's net debt to equity ratio (68.8%) is considered high.
Reducing Debt: ROCC's debt to equity ratio has increased from 16.6% to 73.3% over the past 5 years.
Debt Coverage: ROCC's debt is well covered by operating cash flow (81.9%).
Interest Coverage: ROCC's interest payments on its debt are well covered by EBIT (7x coverage).
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What is Ranger Oil current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
Notable Dividend: Unable to evaluate ROCC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate ROCC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if ROCC's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if ROCC's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: ROCC is not paying a notable dividend for the US market.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as ROCC has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Darrin Henke (55 yo)
Mr. Darrin J. Henke serves as the President, Chief Executive Officer and Director at Ranger Oil Corporation (formerly known as Penn Virginia Corporation) since August 17, 2020. Prior to joining Penn Virgin...
CEO Compensation Analysis
Compensation vs Market: Darrin's total compensation ($USD1.55M) is below average for companies of similar size in the US market ($USD5.41M).
Compensation vs Earnings: Darrin's compensation has been consistent with company performance over the past year.
Experienced Management: ROCC's management team is considered experienced (2.4 years average tenure).
Experienced Board: ROCC's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 176.6%.
Ranger Oil Corporation's employee growth, exchange listings and data sources
- Name: Ranger Oil Corporation
- Ticker: ROCC
- Exchange: NasdaqGS
- Founded: 1882
- Industry: Oil and Gas Exploration and Production
- Sector: Energy
- Implied Market Cap: US$1.568b
- Market Cap: US$760.511m
- Shares outstanding: 42.36m
- Website: https://www.rangeroil.com
Number of Employees
- Ranger Oil Corporation
- 16285 Park Ten Place
- Suite 500
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/08/18 00:00|
|End of Day Share Price||2022/08/18 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.