OTCPK:AREX.Q

Stock Analysis Report

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Executive Summary

Approach Resources, Inc., an independent energy company, focuses on the acquisition, exploration, development, and production of unconventional oil and gas reserves.


Snowflake Analysis

Overvalued with worrying balance sheet.


Similar Companies

Share Price & News

How has Approach Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AREX.Q's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.3%

AREX.Q

2.0%

US Oil and Gas

1.8%

US Market


1 Year Return

-97.2%

AREX.Q

-36.3%

US Oil and Gas

3.7%

US Market

Return vs Industry: AREX.Q underperformed the US Oil and Gas industry which returned -36.3% over the past year.

Return vs Market: AREX.Q underperformed the US Market which returned 3.7% over the past year.


Shareholder returns

AREX.QIndustryMarket
7 Day5.3%2.0%1.8%
30 Day55.6%9.2%5.6%
90 Day-23.1%-22.4%-7.4%
1 Year-97.2%-97.2%-33.4%-36.3%6.1%3.7%
3 Year-99.7%-99.7%-31.8%-39.0%28.3%19.8%
5 Year-99.9%-99.9%-39.0%-48.7%52.4%35.1%

Price Volatility Vs. Market

How volatile is Approach Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Approach Resources undervalued compared to its fair value and its price relative to the market?

0.0012x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate AREX.Q's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate AREX.Q's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: AREX.Q is unprofitable, so we can't compare its PE Ratio to the Oil and Gas industry average.

PE vs Market: AREX.Q is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate AREX.Q's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: AREX.Q is good value based on its PB Ratio (0x) compared to the US Oil and Gas industry average (0.6x).


Next Steps

Future Growth

How is Approach Resources forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

51.2%

Forecasted Energy industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Approach Resources has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

  • Take a look at our analysis of AREX.Q’s management and see if the CEO’s compensation is within a reasonable range, who is on the board and if insiders have been trading lately.
  • While we do not consider unaudited financials to be a reliable enough to include in our analysis, you can access them on the OTC Markets Website. If you are looking for more of a qualitative research into the company, you can access Approach Resources's filings and announcements here.
  • Explore growth companies in the Energy industry.

Past Performance

How has Approach Resources performed over the past 5 years?

-3.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AREX.Q is currently unprofitable.

Growing Profit Margin: AREX.Q is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: AREX.Q is unprofitable, and losses have increased over the past 5 years at a rate of -3.3% per year.

Accelerating Growth: Unable to compare AREX.Q's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: AREX.Q is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-19.8%).


Return on Equity

High ROE: AREX.Q has a negative Return on Equity (-9.03%), as it is currently unprofitable.


Next Steps

Financial Health

How is Approach Resources's financial position?


Financial Position Analysis

Short Term Liabilities: AREX.Q's short term assets ($15.4M) do not cover its short term liabilities ($433.9M).

Long Term Liabilities: AREX.Q's short term assets ($15.4M) do not cover its long term liabilities ($81.4M).


Debt to Equity History and Analysis

Debt Level: AREX.Q's debt to equity ratio (75.3%) is considered high.

Reducing Debt: AREX.Q's debt to equity ratio has increased from 45.6% to 75.3% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: AREX.Q has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: AREX.Q has less than a year of cash runway if free cash flow continues to grow at historical rates of 53.6% each year.


Next Steps

Dividend

What is Approach Resources's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

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

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AREX.Q's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

0.7yrs

Average management tenure


CEO

Sergei Krylov (42yo)

1.08yrs

Tenure

US$1,290,628

Compensation

Mr. Sergei Krylov has been Chief Executive Officer of Approach Resources, Inc. since April 8, 2019 and served as its Chief Financial Officer since January 03, 2014 until September 26, 2019 and also serves  ...


CEO Compensation Analysis

Compensation vs Market: Sergei's total compensation ($USD1.29M) is above average for companies of similar size in the US market ($USD595.62K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Sergei Krylov
CEO & President1.08yrsUS$1.29m0.43% $2.8k
Ian Shaw
Executive Vice President of Finance & Accounting0.67yrno data0.057% $359.4
Troy Hoefer
Executive Vice President of Operations0.67yrno data0.29% $1.9k
Joshua Dazey
Executive Vice President of Legal & Secretary4.33yrsno data0.13% $853.7
Ted Oldham
Chief Operations Geologist0.67yrno datano data

0.7yrs

Average Tenure

40.5yo

Average Age

Experienced Management: AREX.Q's management team is not considered experienced ( 0.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
James Crain
Independent Chairman of the Board1.08yrsUS$167.00k0.23% $1.5k
Alan Bell
Independent Director9.75yrsUS$166.50k0.14% $900.9
Vean Gregg
Lead Independent Director5.5yrsUS$196.00k0.18% $1.2k
Matthew Kahn
Independent Director3.33yrsUS$156.99k0.093% $591.4

4.4yrs

Average Tenure

64.5yo

Average Age

Experienced Board: AREX.Q'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: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Approach Resources, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Approach Resources, Inc.
  • Ticker: AREX.Q
  • Exchange: OTCPK
  • Founded: 2002
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: US$635.423k
  • Shares outstanding: 90.77m
  • Website: https://www.approachresources.com

Number of Employees


Location

  • Approach Resources, Inc.
  • One Ridgmar Centre
  • 6500 West Freeway
  • Fort Worth
  • Texas
  • 76116
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AREX.QOTCPK (Pink Sheets LLC)YesCommon StockUSUSDNov 2007
3OXDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2007
3OXBST (Boerse-Stuttgart)YesCommon StockDEEURNov 2007

Biography

Approach Resources, Inc., an independent energy company, focuses on the acquisition, exploration, development, and production of unconventional oil and gas reserves. The company’s properties are primarily located in the Permian Basin in west Texas. It also owns interests in east Texas Basin. As of December 31, 2018, its estimated proved reserves were 180.1 million barrels of oil equivalent located in Crockett and Schleicher counties, Texas. The company also owned and operated 813 producing oil and gas wells in the Permian Basin. Approach Resources, Inc. was incorporated in 2002 and is headquartered in Fort Worth, Texas. On November 18, 2019, Approach Resources, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. It is in joint administration with Approach Midstream Holdings LLC.  


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/25 03:36
End of Day Share Price2020/05/22 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.