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Laredo Petroleum NYSE:LPI Stock Report

Last Price


Market Cap







30 Sep, 2022


Company Financials +
LPI fundamental analysis
Snowflake Score
Future Growth4/6
Past Performance2/6
Financial Health3/6

LPI Stock Overview

Laredo Petroleum, Inc., an independent energy company, engages in the acquisition, exploration, and development of oil and natural gas properties in the Permian Basin of West Texas, the United States.

Laredo Petroleum Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Laredo Petroleum
Historical stock prices
Current Share PriceUS$62.85
52 Week HighUS$120.86
52 Week LowUS$51.23
1 Month Change-19.02%
3 Month Change-8.77%
1 Year Change-26.09%
3 Year Change47.54%
5 Year Change-74.80%
Change since IPO-82.64%

Recent News & Updates

Sep 14

Laredo Petroleum: Management Kissed A Toad

Summary Management sold non-operated 1650 acres for $110 million. That is a far higher value than the original purchase of 30k acres for 710 million. The effect of the underperforming Leech well package is way overblown. There are plenty of overperforming wells to bring up the average result. Management also has great Middle Sprayberry locations to offset some potential subpar areas.

Aug 23

Laredo Petroleum: Substantially Undervalued But Some Near-Term Risks

Laredo Petroleum is a little-known independent exploration and production company that operates mostly in the Permian Basin. The high oil and gas prices have allowed the company to substantially improve its free cash flow recently, which it is using to pay down its debt. The company's debt remains substantially higher than its peers, which is the biggest risk facing investors in the company today. The fundamentals for crude oil and natural gas point to high prices remaining with us over the long term, although there may be a temporary drop in the near future. Laredo Petroleum appears to be substantially undervalued at the current price. Laredo Petroleum, Inc. (LPI) is an independent exploration and production company operating primarily in the Permian Basin of West Texas. The name of this basin should be quite familiar to many of my regular readers as it has been the focal point of America's shale oil boom and has long been the most prolific hydrocarbon-producing basin in the United States. The energy industry in general has been one of the few bright spots in the choppy markets that we have been seeing lately, due largely to the surge that we have seen in both crude oil and natural gas prices over the past eighteen months. Laredo Petroleum has not been an exception to this as the stock is up a tremendous 71.81% over the past year. As is the case with most companies in the energy industry, there are some signs that Laredo may still be very undervalued. As such, the best may still be yet to come. This attractive valuation does not mean that the company is without risks, however, but it is working on addressing the few problems that it has and there may be some reasons to believe that it will still prove to be a very good investment today. About Laredo Petroleum As stated in the introduction, Laredo Petroleum is an independent exploration and production company that operates primarily in the Permian Basin of West Texas. The company currently controls approximately 166,000 net acres in Howard, Glascock, and Reagan Counties, which are all in the western part of the state: Laredo Petroleum The Permian Basin has long been the focal point of America's shale oil boom for a very good reason. It is one of the most hydrocarbon-rich regions of the world. Although the region has been in continuous production since 1924, the United States Energy Information Administration ("EIA") estimates that it still contains proven reserves of five billion barrels of crude oil and nineteen trillion cubic feet of natural gas. It is worth noting that this estimate is at the prevailing price of both commodities in 2018. As proven reserves only consist of that crude oil and natural gas that can be economically extracted at a given price level, we can assume that the basin's proven reserves are much higher now considering today's higher prices. The enormous reserves present in the Permian Basin is reflected in Laredo Petroleum's own reserves. Investors frequently overlook a company's reserves when making their investment decisions but they are critically important. This is because the energy industry is by its very nature an extractive one. Laredo Petroleum literally obtains the oil and natural gas that it sells by pulling the resources out of reservoirs in the ground. As these reservoirs only contain a finite supply of resources, the company must continually discover or otherwise acquire new sources of resources or it will eventually run out of products to sell. As the company's success at accomplishing this is by no means guaranteed, its reserves dictate how long it can continue to produce before it runs out of resources. As of December 31, 2021, Laredo Petroleum has proven reserves of 315.640 million barrels of oil equivalents. In the second quarter of 2022, Laredo Petroleum produced an average of 87,032 barrels of oil equivalent per day, so its reserves are sufficient to produce for a little less than ten years. This is not a bad figure, although it is less than what some other independents possess. It is reasonably in line with most of the major energy companies, however. One of the nice things about Laredo Petroleum is that the company's production is almost perfectly split between crude oil and natural gas. The reason that this is nice to see is that the fundamentals of these two products are very different. In fact, the fundamentals for natural gas are much stronger, as we will see later in this article. This is a far cry from a few years ago when natural gas was considered to be a waste product so it was frequently flared off. We can see this somewhat in the fact that natural gas has seen its price increase much more than crude oil. Over the past twelve months, West Texas Intermediate crude oil has risen 45.41%, but natural gas at Henry Hub is up a whopping 151.43%. Admittedly, some of the price increase in natural gas is due to the European energy crisis but there are reasons to expect that natural gas prices will continue to remain elevated going forward. This certainly showed in Laredo Petroleum's second quarter 2022 earnings results as the company's revenues increased by 90.6% and its net income swung to a profit relative to the year-ago quarter. This has allowed the generate to generate a significant amount of free cash flow. In the second quarter, Laredo Petroleum achieved a levered free cash flow of $152.7 million, which was a record for the company: Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Levered Free Cash Flow 152.7 77.6 (143.3) (587.5) 53.8 18.1 44.0 55.4 (27.7) (all figures in millions of U.S. dollars) This is very nice to see because ultimately it is free cash flow that allows the company to reward its shareholders. That is because this is the money that is generated by the company's ordinary operations after it pays all its bills and makes all necessary capital expenditures. This is, therefore, the money that can be used to pay down debt, repurchase stock, or pay a dividend. Laredo Petroleum is opting to pay down debt, although it also instituted a share buyback program in the most recent quarter. We can see this by looking at the company's leverage ratio, which is also known as the net debt-to-consolidated EBITDAX ratio. This ratio essentially tells us how long it would take the company to completely pay off its debt were it to devote all its pre-tax cash flow to that task. At the end of 2020, Laredo Petroleum's leverage ratio stood at 2.7x but it has since managed to reduce it significantly. As of the end of the second quarter of 2022, this ratio stood at 1.39x and it expects to have it down to less than 1.0x by the end of the second quarter of 2023: Laredo Petroleum This is unfortunately one of the biggest risks to the company, particularly as energy prices have declined over the past few weeks and the economy heads into a recession. Unfortunately, a recession could indeed cause resource prices to be lower for the duration of the event. This could cause the company's free cash flow to come in much lower than the firm expects. Although Laredo Petroleum has made significant progress at improving its leverage, it remains much higher than many peers that have already gotten leverage below 1.0x. This situation could very easily result in Laredo Petroleum being quite a bit riskier than some of its peers should the recession result in significant declines in energy prices for any extended period of time. Last week, Northern Oil and Gas (NOG) said that it has agreed to acquire about 1,650 net acres of land from Laredo Petroleum for $110 million. At this time, this acreage is not producing, although Laredo Petroleum state that it will begin producing in the near future and should be producing an average of 1,800 barrels of oil equivalents per day by the end of 2023. Unfortunately, that is all that we know about this transaction at this time. It seems likely that this will result in Laredo Petroleum having a lower free cash flow and EBITDAX than it projected in the earnings report because the company's production will be lower than expected. This could make the company's debt concerns that were just discussed worse. However, Laredo Petroleum could also use the $110 million to pay off some of its debt and more than offset this problem. At this time, the exact impact on Laredo Petroleum is unknown because it depends on how the company uses the money. An update will be provided in a later article as more information about this transaction becomes available. Fundamentals Of Crude Oil And Natural Gas As stated in the introduction, the fundamentals of both crude oil and natural gas are quite strong, although natural gas is significantly stronger. This benefits Laredo Petroleum because the company produces an almost perfectly balanced mixture of crude oil and natural gas. The fact that these resources have strong fundamentals and growing demand is likely to be surprising to some readers because of the fact that numerous governments in both Europe and the United States have been devoting a great deal of effort to reducing the carbon emissions and consumption of fossil fuels within their borders. However, according to the International Energy Agency, the global demand for natural gas will increase by 29% and the global demand for crude oil will increase by 7% over the next twenty years: Pembina Pipeline/Data from IEA 2021 World Energy Outlook The demand growth for natural gas will be driven by the international concerns about climate change. As everyone reading this is likely well aware, these concerns have caused governments all over the world to impose a variety of incentives and mandates that are intended to reduce the carbon emissions of their respective nations. One of the most common strategies being used to accomplish this is to encourage utilities to retire old coal-fired power plants in favor of renewables. However, renewables are not reliable enough to handle the needs of modern society. After all, solar power does not work when the sun is not shining and wind power does not work when the air is still. The common solution to this problem is to supplement renewables with natural gas turbines. This is because natural gas does enjoy the reliability that we expect from the grid but burns cleaner than any other fossil fuel. This is the reason why natural gas is often called a "transitional fuel" since it will help us reduce carbon emissions and ensure the functioning of modern society while we wait for needed advancements in renewable technology. The case for crude oil demand growth is likely harder to understand given the trends that we are seeing in the Western nations. However, the trends that we see in emerging markets are very different. These nations are expected to see tremendous economic growth over the projection period. This economic growth will have the effect of lifting the citizens of these nations out of poverty and putting them firmly into the middle class. These newly middle-class people will naturally begin to desire a lifestyle that is much closer to what their counterparts in the developed nations enjoy than what they have now. This will result in growing consumption of energy, including energy that is derived from crude oil. As the populations of these nations are substantially larger than the populations of the developed nations, the growing consumption of crude oil here will more than offset the stagnant-to-declining demand of the world's developed nations.

Shareholder Returns

LPIUS Oil and GasUS Market

Return vs Industry: LPI underperformed the US Oil and Gas industry which returned 36.6% over the past year.

Return vs Market: LPI underperformed the US Market which returned -21.5% over the past year.

Price Volatility

Is LPI's price volatile compared to industry and market?
LPI volatility
LPI Average Weekly Movement11.3%
Oil and Gas Industry Average Movement8.1%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: LPI is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: LPI's weekly volatility (11%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

2006273Mikell Pigott

Laredo Petroleum, Inc., an independent energy company, engages in the acquisition, exploration, and development of oil and natural gas properties in the Permian Basin of West Texas, the United States. The company sells oil, natural gas liquids, and natural gas. As of December 31, 2021, it had assembled 166,064 net acres in the Permian Basin; and had total proved undeveloped reserves of 86,592 thousand barrels of oil equivalent.

Laredo Petroleum Fundamentals Summary

How do Laredo Petroleum's earnings and revenue compare to its market cap?
LPI fundamental statistics
Market CapUS$1.05b
Earnings (TTM)US$528.87m
Revenue (TTM)US$1.94b


P/E Ratio


P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LPI income statement (TTM)
Cost of RevenueUS$529.69m
Gross ProfitUS$1.41b
Other ExpensesUS$883.46m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date


Earnings per share (EPS)31.73
Gross Margin72.72%
Net Profit Margin27.23%
Debt/Equity Ratio190.0%

How did LPI perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.


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

Valuation Score


Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

LPI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.1x
Enterprise Value/EBITDA2.5x
PEG Ratio0.09x

Price to Earnings Ratio vs Peers

How does LPI's PE Ratio compare to its peers?

LPI PE Ratio vs Peers
The above table shows the PE ratio for LPI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average11.5x
KRP Kimbell Royalty Partners
DMLP Dorchester Minerals
SBR Sabine Royalty Trust
ROCC Ranger Oil
LPI Laredo Petroleum

Price-To-Earnings vs Peers: LPI is good value based on its Price-To-Earnings Ratio (2x) compared to the peer average (11.5x).

Price to Earnings Ratio vs Industry

How does LPI's PE Ratio compare vs other companies in the US Oil and Gas Industry?

Price-To-Earnings vs Industry: LPI is good value based on its Price-To-Earnings Ratio (2x) compared to the US Oil and Gas industry average (8.3x)

Price to Earnings Ratio vs Fair Ratio

What is LPI'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.

LPI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio2x
Fair PE Ratio19x

Price-To-Earnings vs Fair Ratio: LPI is good value based on its Price-To-Earnings Ratio (2x) compared to the estimated Fair Price-To-Earnings Ratio (19x).

Share Price vs Fair Value

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

Below Fair Value: LPI ($62.85) is trading below our estimate of fair value ($175.31)

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

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, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Laredo Petroleum forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score


Future Growth Score 4/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LPI's forecast earnings growth (21.4% per year) is above the savings rate (1.9%).

Earnings vs Market: LPI's earnings (21.4% per year) are forecast to grow faster than the US market (14.7% per year).

High Growth Earnings: LPI's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LPI's revenue is expected to decline over the next 3 years (-12.3% per year).

High Growth Revenue: LPI's revenue is forecast to decline over the next 3 years (-12.3% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LPI's Return on Equity is forecast to be high in 3 years time (37.8%)

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Past Performance

How has Laredo Petroleum performed over the past 5 years?

Past Performance Score


Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


Historical annual earnings growth

Earnings and Revenue History

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

Growing Profit Margin: LPI became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: LPI has become profitable over the past 5 years, growing earnings by -35.4% per year.

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

Earnings vs Industry: LPI 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: Whilst LPI's Return on Equity (77.84%) is outstanding, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Laredo Petroleum's financial position?

Financial Health Score


Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: LPI's short term assets ($374.0M) do not cover its short term liabilities ($799.4M).

Long Term Liabilities: LPI's short term assets ($374.0M) do not cover its long term liabilities ($1.4B).

Debt to Equity History and Analysis

Debt Level: LPI's net debt to equity ratio (168.3%) is considered high.

Reducing Debt: LPI's debt to equity ratio has reduced from 428.4% to 190% over the past 5 years.

Debt Coverage: LPI's debt is well covered by operating cash flow (65.7%).

Interest Coverage: LPI's interest payments on its debt are well covered by EBIT (4.6x coverage).

Balance Sheet

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What is Laredo Petroleum current dividend yield, its reliability and sustainability?

Dividend Score


Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Laredo Petroleum Dividend Yield vs Market
How does Laredo Petroleum dividend yield compare to the market?
SegmentDividend Yield
Company (Laredo Petroleum)n/a
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Oil and Gas)5.0%
Analyst forecast in 3 Years (Laredo Petroleum)n/a

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

High Dividend: Unable to evaluate LPI'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 LPI's dividends per share have been stable in the past.

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

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as LPI 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


Mikell Pigott (48 yo)





Mr. Mikell Jason Pigott has been the President and Director of Laredo Petroleum, Inc. since May 28, 2019 and is its Chief Executive Officer since October 1, 2019. Mr. Pigott served as Executive Vice Presid...

CEO Compensation Analysis

Mikell Pigott's Compensation vs Laredo Petroleum Earnings
How has Mikell Pigott's remuneration changed compared to Laredo Petroleum's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a


Mar 31 2022n/an/a


Dec 31 2021US$6mUS$720k


Sep 30 2021n/an/a


Jun 30 2021n/an/a


Mar 31 2021n/an/a


Dec 31 2020US$3mUS$720k


Sep 30 2020n/an/a


Jun 30 2020n/an/a


Mar 31 2020n/an/a


Dec 31 2019US$7mUS$413k


Compensation vs Market: Mikell's total compensation ($USD5.93M) is above average for companies of similar size in the US market ($USD4.14M).

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

Leadership Team

Experienced Management: LPI's management team is considered experienced (3.2 years average tenure).

Board Members

Experienced Board: LPI's board of directors are not considered experienced ( 2.6 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: LPI insiders have only sold shares in the past 3 months.

Recent Insider Transactions

NYSE:LPI Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
02 Sep 22SellUS$23,610Jessica WrenIndividual314US$75.19
22 Aug 22SellUS$72,668Jessica WrenIndividual1,009US$72.02
01 Mar 22SellUS$27,612Jessica WrenIndividual354US$78.00
06 Jan 22SellUS$36,500,000EnCap Investments L.P.Company500,000US$73.00
09 Nov 21SellUS$972,840Mikell PigottIndividual13,400US$72.60

Ownership Breakdown

What is the ownership structure of LPI?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders333,6272.0%
Public Companies745,6834.5%
General Public2,024,87212.1%

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.7%.

Top Shareholders

Top 25 shareholders own 67% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
BlackRock, Inc.
2,381,612$149.7m7.8%no data
State Street Global Advisors, Inc.
1,489,117$93.6m-28.58%no data
The Vanguard Group, Inc.
1,112,810$69.9m8.26%no data
Pioneer Natural Resources Company
745,683$46.9m0%no data
Maple Rock Capital Partners Inc.
Aventail Capital Group, LP
Dimensional Fund Advisors LP
Portolan Capital Management, LLC
D. E. Shaw & Co., L.P.
Encompass Capital Advisors LLC
Millennium Management LLC
Invesco Capital Management LLC
Geode Capital Management, LLC
262,339$16.5m12.98%no data
Morgan Stanley, Investment Banking and Brokerage Investments
205,417$12.9m71.03%no data
Hill City Capital LP
First Trust Advisors LP
First Sabrepoint Capital Management LP
Northern Trust Global Investments
168,228$10.6m22.94%no data
Goldman Sachs Group, Investment Banking and Securities Investments
Hwabao WP Fund Management Co., Ltd
BNY Mellon Asset Management
146,192$9.2m0.91%no data
Citadel Advisors LLC
American Century Investment Management Inc
115,365$7.3m18.06%no data
Invenomic Capital Management, LP
Mikell Pigott
114,407$7.2m-3.17%no data

Company Information

Laredo Petroleum, Inc.'s employee growth, exchange listings and data sources

Key Information

  • Name: Laredo Petroleum, Inc.
  • Ticker: LPI
  • Exchange: NYSE
  • Founded: 2006
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Implied Market Cap: US$1.048b
  • Shares outstanding: 16.67m
  • Website:

Number of Employees


  • Laredo Petroleum, Inc.
  • 15 West Sixth Street
  • Suite 900
  • Tulsa
  • Oklahoma
  • 74119
  • United States


TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LPINYSE (New York Stock Exchange)YesCommon StockUSUSDDec 2011
8LP1DB (Deutsche Boerse AG)YesCommon StockDEEURDec 2011

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/30 00:00
End of Day Share Price2022/09/30 00:00
Annual Earnings2021/12/31

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.