REI gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 207 industry peers in the Oil, Gas & Consumable Fuels industry. While REI belongs to the best of the industry regarding profitability, there are concerns on its financial health. REI has a bad growth rate and is valued cheaply.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year REI was profitable.
In the past year REI had a positive cash flow from operations.
REI had positive earnings in 4 of the past 5 years.
In the past 5 years REI always reported a positive cash flow from operatings.

1.2 Ratios

REI has a Return On Assets of 4.57%. This is in the better half of the industry: REI outperforms 62.80% of its industry peers.
REI has a Return On Equity of 7.72%. This is comparable to the rest of the industry: REI outperforms 50.72% of its industry peers.
REI has a Return On Invested Capital (6.18%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for REI is significantly below the industry average of 21.94%.
The last Return On Invested Capital (6.18%) for REI is well below the 3 year average (11.40%), which needs to be investigated, but indicates that REI had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	4.57%
ROE	7.72%
ROIC	6.18%

ROA(3y)7.78%

ROA(5y)-2.88%

ROE(3y)14.05%

ROE(5y)-8.54%

ROIC(3y)11.4%

ROIC(5y)9.87%

1.3 Margins

REI's Profit Margin of 20.72% is fine compared to the rest of the industry. REI outperforms 77.78% of its industry peers.
In the last couple of years the Profit Margin of REI has grown nicely.
The Operating Margin of REI (29.70%) is better than 73.91% of its industry peers.
REI's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 92.88%, REI belongs to the top of the industry, outperforming 96.62% of the companies in the same industry.
In the last couple of years the Gross Margin of REI has grown nicely.

		Industry Rank	Sector Rank
OM	29.7%
PM (TTM)	20.72%
GM	92.88%

OM growth 3Y-9.4%

OM growth 5Y2.02%

PM growth 3Y121.59%

PM growth 5Y4.09%

GM growth 3Y0.46%

GM growth 5Y5.74%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), REI is creating some value.
Compared to 1 year ago, REI has more shares outstanding
REI has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, REI has an improved debt to assets ratio.

2.2 Solvency

REI has an Altman-Z score of 0.73. This is a bad value and indicates that REI is not financially healthy and even has some risk of bankruptcy.
REI has a Altman-Z score of 0.73. This is in the lower half of the industry: REI underperforms 61.35% of its industry peers.
The Debt to FCF ratio of REI is 15.05, which is on the high side as it means it would take REI, 15.05 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 15.05, REI perfoms like the industry average, outperforming 48.79% of the companies in the same industry.
A Debt/Equity ratio of 0.50 indicates that REI is somewhat dependend on debt financing.
REI has a Debt to Equity ratio of 0.50. This is comparable to the rest of the industry: REI outperforms 45.89% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.5
Debt/FCF	15.05
Altman-Z	0.73

ROIC/WACC0.58

WACC10.72%

2.3 Liquidity

REI has a Current Ratio of 0.63. This is a bad value and indicates that REI is not financially healthy enough and could expect problems in meeting its short term obligations.
REI has a worse Current ratio (0.63) than 75.36% of its industry peers.
A Quick Ratio of 0.58 indicates that REI may have some problems paying its short term obligations.
REI's Quick ratio of 0.58 is on the low side compared to the rest of the industry. REI is outperformed by 73.91% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.63
Quick Ratio	0.58

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

REI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -45.00%.
REI shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -11.37% yearly.
The Revenue has been growing slightly by 1.46% in the past year.
Measured over the past years, REI shows a quite strong growth in Revenue. The Revenue has been growing by 13.36% on average per year.

EPS 1Y (TTM)-45%

EPS 3Y4.13%

EPS 5Y-11.37%

EPS Q2Q%-14.29%

Revenue 1Y (TTM)1.46%

Revenue growth 3Y23.12%

Revenue growth 5Y13.36%

Sales Q2Q%-11.93%

3.2 Future

Based on estimates for the next years, REI will show a very negative growth in Earnings Per Share. The EPS will decrease by -23.65% on average per year.
The Revenue is expected to decrease by -6.19% on average over the next years.

EPS Next Y-85.72%

EPS Next 2Y-23.65%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year-14.08%

Revenue Next 2Y-6.19%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 5.41, which indicates a rather cheap valuation of REI.
Based on the Price/Earnings ratio, REI is valued cheaper than 92.75% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.32. REI is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 5.83, the valuation of REI can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of REI indicates a rather cheap valuation: REI is cheaper than 96.14% of the companies listed in the same industry.
REI is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	5.41
Fwd PE	5.83

4.2 Price Multiples

87.92% of the companies in the same industry are more expensive than REI, based on the Enterprise Value to EBITDA ratio.
REI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. REI is cheaper than 86.96% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	8.23
EV/EBITDA	3.52

4.3 Compensation for Growth

REI has a very decent profitability rating, which may justify a higher PE ratio.
REI's earnings are expected to decrease with -23.65% in the coming years. This may justify a cheaper valuation.