EVOLUTION PETROLEUM CORP (EPM)

US30049A1079 - Common Stock

5.78  +0.13 (+2.3%)

After market: 5.72 -0.06 (-1.04%)

Fundamental Rating

4

Overall EPM gets a fundamental rating of 4 out of 10. We evaluated EPM against 212 industry peers in the Oil, Gas & Consumable Fuels industry. The financial health of EPM is average, but there are quite some concerns on its profitability. EPM has a expensive valuation and it also scores bad on growth.



3

1. Profitability

1.1 Basic Checks

In the past year EPM was profitable.
In the past year EPM had a positive cash flow from operations.
EPM had positive earnings in 4 of the past 5 years.
Each year in the past 5 years EPM had a positive operating cash flow.

1.2 Ratios

The Return On Assets of EPM (1.77%) is worse than 72.04% of its industry peers.
EPM has a Return On Equity of 3.54%. This is in the lower half of the industry: EPM underperforms 71.56% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.00%, EPM is doing worse than 74.88% of the companies in the same industry.
EPM had an Average Return On Invested Capital over the past 3 years of 21.83%. This is significantly below the industry average of 38.31%.
The 3 year average ROIC (21.83%) for EPM is well above the current ROIC(3.00%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 1.77%
ROE 3.54%
ROIC 3%
ROA(3y)9.35%
ROA(5y)10.11%
ROE(3y)17.11%
ROE(5y)15.71%
ROIC(3y)21.83%
ROIC(5y)16.98%

1.3 Margins

EPM has a worse Profit Margin (3.57%) than 69.19% of its industry peers.
EPM's Profit Margin has declined in the last couple of years.
EPM has a worse Operating Margin (6.96%) than 72.04% of its industry peers.
In the last couple of years the Operating Margin of EPM has declined.
EPM has a Gross Margin (41.22%) which is in line with its industry peers.
In the last couple of years the Gross Margin of EPM has declined.
Industry RankSector Rank
OM 6.96%
PM (TTM) 3.57%
GM 41.22%
OM growth 3Y27%
OM growth 5Y-2.46%
PM growth 3Y10.96%
PM growth 5Y-10.65%
GM growth 3Y-0.43%
GM growth 5Y-5.53%

5

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), EPM is creating value.
Compared to 1 year ago, EPM has less shares outstanding
The number of shares outstanding for EPM has been increased compared to 5 years ago.
There is no outstanding debt for EPM. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

EPM has an Altman-Z score of 2.39. This is not the best score and indicates that EPM is in the grey zone with still only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.39, EPM is doing good in the industry, outperforming 65.88% of the companies in the same industry.
EPM has a Debt/Equity ratio of 0.51. This is a neutral value indicating EPM is somewhat dependend on debt financing.
EPM has a Debt to Equity ratio of 0.51. This is comparable to the rest of the industry: EPM outperforms 47.87% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.51
Debt/FCF N/A
Altman-Z 2.39
ROIC/WACC0.34
WACC8.75%

2.3 Liquidity

A Current Ratio of 1.49 indicates that EPM should not have too much problems paying its short term obligations.
The Current ratio of EPM (1.49) is better than 60.19% of its industry peers.
EPM has a Quick Ratio of 1.49. This is a normal value and indicates that EPM is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.49, EPM is in the better half of the industry, outperforming 65.88% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.49
Quick Ratio 1.49

3

3. Growth

3.1 Past

The earnings per share for EPM have decreased strongly by -94.59% in the last year.
EPM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.46% yearly.
The Revenue for EPM has decreased by -45.64% in the past year. This is quite bad
Measured over the past years, EPM shows a very strong growth in Revenue. The Revenue has been growing by 25.81% on average per year.
EPS 1Y (TTM)-94.59%
EPS 3Y100%
EPS 5Y20.46%
EPS Q2Q%-97.56%
Revenue 1Y (TTM)-45.64%
Revenue growth 3Y63.14%
Revenue growth 5Y25.81%
Sales Q2Q%-37.55%

3.2 Future

EPM is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -24.30% yearly.
Based on estimates for the next years, EPM will show a decrease in Revenue. The Revenue will decrease by -3.08% on average per year.
EPS Next Y-83.49%
EPS Next 2Y-24.3%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-30.26%
Revenue Next 2Y-3.08%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

2

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 72.25, which means the current valuation is very expensive for EPM.
Compared to the rest of the industry, the Price/Earnings ratio of EPM indicates a slightly more expensive valuation: EPM is more expensive than 76.78% of the companies listed in the same industry.
EPM's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.40.
A Price/Forward Earnings ratio of 9.70 indicates a reasonable valuation of EPM.
EPM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. EPM is cheaper than 64.45% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of EPM to the average of the S&P500 Index (20.03), we can say EPM is valued rather cheaply.
Industry RankSector Rank
PE 72.25
Fwd PE 9.7

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, EPM is valued a bit more expensive than 62.09% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 9.36

4.3 Compensation for Growth

A cheap valuation may be justified as EPM's earnings are expected to decrease with -24.30% in the coming years.
PEG (NY)N/A
PEG (5Y)3.53
EPS Next 2Y-24.3%
EPS Next 3YN/A

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 8.94%, EPM is a good candidate for dividend investing.
EPM's Dividend Yield is rather good when compared to the industry average which is at 6.06. EPM pays more dividend than 86.26% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, EPM pays a better dividend.
Industry RankSector Rank
Dividend Yield 8.94%

5.2 History

The dividend of EPM is nicely growing with an annual growth rate of 6.61%!
EPM has been paying a dividend for at least 10 years, so it has a reliable track record.
EPM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)6.61%
Div Incr Years3
Div Non Decr Years3

5.3 Sustainability

542.44% of the earnings are spent on dividend by EPM. This is not a sustainable payout ratio.
EPM's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP542.44%
EPS Next 2Y-24.3%
EPS Next 3YN/A

EVOLUTION PETROLEUM CORP

NYSEARCA:EPM (6/12/2024, 4:36:16 PM)

After market: 5.72 -0.06 (-1.04%)

5.78

+0.13 (+2.3%)

Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap192.82M
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 8.94%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 72.25
Fwd PE 9.7
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)3.53
Profitability
Industry RankSector Rank
ROA 1.77%
ROE 3.54%
ROCE
ROIC
ROICexc
ROICexgc
OM 6.96%
PM (TTM) 3.57%
GM 41.22%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.5
Health
Industry RankSector Rank
Debt/Equity 0.51
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.49
Quick Ratio 1.49
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-94.59%
EPS 3Y100%
EPS 5Y
EPS Q2Q%
EPS Next Y-83.49%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-45.64%
Revenue growth 3Y63.14%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y