Greenfire Resources Ltd. (NYSE: GFR)

Sector: Energy Industry: Oil & Gas E&P CIK: 0001966287
Market Cap 400.64 Mn
P/B 0.63
P/E 4.10
P/S 0.82
ROIC (Qtr) 10.95
Div Yield % 0.00
Rev 1y % (Qtr) -41.85
Total Debt (Qtr) 238.73 Mn
Debt/Equity (Qtr) 0.37
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About

Investment thesis

Bull case

  • Strong operating cash flow of 116.93M provides robust 0.49x coverage of total debt 238.73M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 83.08M provide 7.36x coverage of short-term debt 11.29M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 944.78M provides 3.96x coverage of total debt 238.73M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 116.93M provides strong 47.53x coverage of stock compensation 2.46M, indicating sustainable incentive practices.
  • Strong operating cash flow of 116.93M provides 5.68x coverage of SG&A expenses 20.60M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 116.93M barely covers its investment activities of (52.60M), with a coverage ratio of -2.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (52.60M) provide weak support for R&D spending of 1.27M, which is -41.33x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 83.08M provide limited coverage of acquisition spending of (489855.07), which is -169.61x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 38.28M relative to inventory of 14.89M (2.57 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of 116.93M provides minimal -2.21x coverage of tax expenses of (52.99M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Oil & Gas E&P
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 COP Conocophillips 136.62 Bn 17.10 2.22 23.44 Bn
2 CNQ Canadian Natural Resources Ltd 85.21 Bn 17.67 3.04 12.51 Bn
3 EOG Eog Resources Inc 66.33 Bn -60.48 8.67 8.13 Bn
4 FANG Diamondback Energy, Inc. 49.64 Bn -2,818.83 314.47 16.24 Bn
5 OXY Occidental Petroleum Corp /De/ 37.18 Bn 15.36 2.56 22.88 Bn
6 WDS Woodside Energy Group Ltd 34.64 Bn 11.73 2.51 -
7 TPL Texas Pacific Land Corp 29.74 Bn 126.16 78.66 0.02 Bn
8 DVN Devon Energy Corp/De 18.80 Bn 3.24 1.91 8.55 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.47 1.02
EV to Cash from Ops. EV/CFO 3.81 18.21
EV to Debt EV to Debt 1.87 54.57
EV to EBIT EV/EBIT 5.40 29.98
EV to EBITDA EV/EBITDA 2.95 19.64
EV to Free Cash Flow [EV/FCF] EV/FCF 6.87 39.33
EV to Market Cap EV to Market Cap 1.11 1.57
EV to Revenue EV/Rev 0.91 11.47
Price to Book Value [P/B] P/B 0.63 2.97
Price to Earnings [P/E] P/E 4.10 -25.98
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 26.80
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 31.86
Dividend per Basic Share Div per Share (Qtr) 0.00 0.78
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.05
Interest Coverage Int. cover (Qtr) 2.18 -4.97
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 22.63 -533.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 199.65 52.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -5.45
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 219.06 6.14
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -24.49 105.89
EBIT Growth (1y) % EBIT 1y % (Qtr) -13.07 75.94
EBT Growth (1y) % EBT 1y % (Qtr) -5.29 17.44
EPS Growth (1y) % EPS 1y % (Qtr) 148.30 3.07
FCF Growth (1y) % FCF 1y % (Qtr) 382.12 -43.36
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.24 149.32
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.38 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 1.25 1.32
Current Ratio Curr Ratio (Qtr) 2.27 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.37 0.34
Interest Cover Ratio Int Coverage (Qtr) 2.18 -4.97
Times Interest Earned Times Interest Earned (Qtr) 2.18 -4.97
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 33.10 16.19
EBIT Margin % EBIT Margin % (Qtr) 23.17 -16.83
EBT Margin % EBT Margin % (Qtr) 9.08 -24.06
Gross Margin % Gross Margin % (Qtr) 32.60 58.92
Net Profit Margin % Net Margin % (Qtr) 19.90 -28.75