Last Updated: 18 Sep 2024
Executive Summary
Vaalco Energy Inc. (EGY) is an independent energy company that acquires, explores, develops, and produces crude oil and natural gas. The company has a market capitalization of $610 million and trades on the NYSE. EGY has a strong financial profile with an EBITDA of $281.8 million, a net income of $140.9 million, and a profit margin of 17.8%. The company also pays a quarterly dividend of $0.25 per share, which equates to a dividend yield of 4.25%.
Company Overview
Vaalco Energy was founded in 1985 and is headquartered in Houston, Texas. The company has operations in Gabon, Equatorial Guinea, and the United States. Vaalco's primary focus is on the exploration and production of crude oil and natural gas in the Gulf of Guinea. The company has a portfolio of producing assets, including the Etame Marin block in Gabon and the Block 10 field in Equatorial Guinea.
Fundamental Analysis
Vaalco Energy has a strong financial profile. The company has a healthy balance sheet with $222.5 million in cash and equivalents and $162.3 million in debt. Vaalco also has a strong cash flow from operations, which totaled $170.6 million in the past year.
Vaalco's revenue and earnings have been growing in recent years. In 2023, the company reported revenue of $482.4 million and net income of $140.9 million. This represents an increase of 6.9% and 28.7%, respectively, over the previous year.
Vaalco's stock is currently trading at $5.88, which is below its 52-week high of $7.36. The company's trailing PE ratio is 7.35, which is below the industry average of 10.25. Vaalco's forward PE ratio is 6.0, which is also below the industry average.
Technical Analysis
Vaalco Energy's stock price has been in a downtrend since early 2023. The stock has been trading below its 50-day and 200-day moving averages. The stock's relative strength index (RSI) is currently at 35.4, which indicates that the stock is oversold.
Short Term Outlook
Vaalco Energy's stock price is likely to remain under pressure in the short term. The company's earnings are expected to decline in the coming quarters due to lower oil prices. The stock's technical indicators also suggest that the stock is oversold and could be due for a correction.
Long Term Outlook
Vaalco Energy's long-term outlook is positive. The company has a strong financial profile and a portfolio of producing assets. The company is also expected to benefit from the rising demand for oil and gas in the coming years.
Analyst Recommendations
Two analysts have issued buy ratings on Vaalco Energy in the past three months. The average target price for the stock is $9.13, which represents a potential upside of 55.1% from the current price.
